Podcast - Greece sets out on long road to 2023 elections
Where is Odysseus? Part 6 - Potential real GDP
Podcast - How is the Ukraine war affecting Greece?
Where is Odysseus? Part 5 - Productivity
Where is Odysseus? Part 4 - Unemployment and Employment
Broad impact of inflation crisis becoming clearer
Who’s afraid of Angela Merkel?
Angela Merkel triumphed in the German elections. The 41.5 percent gained by the CDU/CSU put her in the same league as her conservative predecessors, Konrad Adenauer and Helmut Kohl. While most of Europe hoped for a different outcome, Germans opted for Mutti (mummy) Angela. Her simple message was: “You know me.” This was the closest a campaign has come to Adenauer’s “No experiments” in the late 50s, and it succeeded. The German angst about change prevailed at a time when in many parts of Europe there seems no solid ground for economies and societies.
However, the result is not as clear as it seems at first glance. The new Bundestag is divided into the conservative faction with nearly half the seats (311 of 630) and into the factions of the social democrats (SPD), the Greens and the left party (Die Linke), which combined have 319 representatives. The liberals, the smaller party that partnered Merkel, collapsed. After losing nearly 10 percent of their vote, they failed to meet the 5-percent threshold and are not represented in the new parliament. The party of Foreign Minister Guido Westerwelle and Economy Minister Phillip Roesler vanished as far as German federal politics are concerned. There are serious doubts about whether it will ever return because the eurosceptic Alternative for Germany, promoting the return of Germany to the Deutschmark or an exit of the South from the euro, gained 4.7 percent and nearly managed to get into the Bundestag. They could over time replace the liberals, representing the well-off, extremely eurosceptic part of West Germany and the eurosceptic and not so well off part of East Germany, where they managed to collect mostly over 5 percent.
Cooperate and vanish?
The big question for the victorious chancellor is now: “With whom will I govern?” Or better: “Who will govern the country under me?” Despite the fantastic result of the CDU/CSU, it will not be easy to form a coalition in this new four-party parliament. Die Linke has been ruled out by everyone as a partner in government due to their positions in the field of foreign and European policy. The Greens have the support of well off voters in common with Angela Merkel. Also, her decision to end the use of nuclear power in Germany removed the biggest obstacle for a black-green coalition. However, after having failed to get more than 10 percent in the elections, the Green party is in self-cleansing mode, which means that for the months to come, they will be occupied by choosing a new leadership, questioning the election campaign and refocusing their brand. Whereas the current leadership might have been willing to cooperate with Merkel, the members of the Greens still perceive the conservatives as the evil party. The main bones of contention are social matters as same-sex marriages, adoption right for gay couples and dual citizenship. This coalition is rather improbable.
That leaves the Social Democrats. But the traumatic experience of 2009 is still engrained in the ranks of the SPD. After four years of a coalition with Angela Merkel and a rather successful course, especially during the global economic crisis in 2008, the party lost a third of its votes and scored the worst result in its history with 23 percent. Therefore the party is now trapped between Scylla and Charybdis. Either it chooses to cooperate with Merkel in the name of the national good, being the junior partner of the adored chancellor, or the SPD opts for opposition, provoking possible new elections with an even more disastrous result. Inside the party the conflict is already visible and it seems that a decision is not due in the coming days.
The difficult process of forming a government
Angela Merkel is a terrifying bride for possible coalition partners. That makes it so difficult for the SPD and the Green Party to say yes to her. However, the Germans are not known for their readiness to assume risks. Stability and predictability are amongst the highest values in the population, and the preference towards a grand coalition between CDU and SPD seems rather strong. Therefore it is rather probable that in the coming two or three weeks, we will witness a new German government, bearing a Merkel trademark that will not be as clear as one would expect after the elections. Some concessions concerning taxes, minimum wage and the European policies are to be expected. With such a fearsome past, you need to give your partner at least a sense of security, before you try to bring them down again in four years.
And what about Greece?
The euro crisis and especially the case of Greece have been mentioned many times in the election campaign. On the one hand, Merkel offered to continue her established course: support Greece if it carries out reforms. On the other hand, the SPD focuses on a socially just budget consolidation and a growth perspective for the Greek economy. Both parties share the exclusion of a second haircut. The differences between the two camps are bridgeable. The most probable outcome will be the continuation of the policies of the past three years in substance, combined with a softer rhetoric and a visible growth component.
*Christos Katsioulis is the director of the Friedrich Ebert Stiftung office in Athens, Greece.
Do you think that after the elections, such a real solution is on the table? I don't think that the elections were the obstacle, rather the limited view of the current government and the fear of the other parties to loose votes.
However, as you mention the Constitutional Court, this could present a hurdle for further engagement, but as CDU, SPD and the Greens support the current way of crisis-management, there would be room for a revision of the constitution, making this ruling obsolete.
On your hopeful ending: Yes, I hope so too...
You ignore the fact, that before the election it was impossible to find a real solution to the whole Euro crisis.
Soon the German court might disallow an unlimited engagement of the country and this will require a completely different direction.
With a stable (big) coalition and the problems of the other countries snowballing Merkel might become active and go some big steps!