Several days ago, Germany’s federal election took place and voters gave Chancellor Angela Merkel another term in office. The major change from the election result was that the period of Germany’s “grand coalition” between Merkel’s Christian Democrats (CDU), and the Christian Social Union (CSU), and the Social Democrats (SPD) is finished. Instead, Germany will now be governed by a coalition of Merkel’s CDU/CSU and the Free Democratic Party (FDP), which last governed Germany together in 1998.
The German election result may pose a major re-alignment in German politics, as the major parties become more polarized in opposition to each other and there is a clearer ideological split between minor parties. Also, much of the new government’s work will be focused on improving the national economy, which barely climbed out of recession at the end of the second quarter.
To discuss these issues, this week’s brief will explain the German federal election. To do so, we will examine the run-up to the election, how the election turned out, and what the new governing coalition of the CDU/CSU and the FDP will be able to accomplish in their new term.
Election Run-Up
After Norway’s election a week before, Germany’s election was the primary issue on the European continent. German elections are interesting in that there are five parties that regularly contest for seats in the national legislature, called the Bundestag. Merkel’s CDU/CSU and the SPD are the major parties in the country, but minor parties such as the FDP, the Left Party, and the Green Party have all been able to play kingmaker for new governments. Before elections, there can be horse trading between parties in order to try to establish a governing majority. For example, in this election, Frank-Walter Steinmeier, the SPD’s chancellor candidate, ruled out establishing a coalition with the Left Party. The Left Party is made up of ex-communists and has a loyal base in East Germany. Because of this, the SPD tried to campaign with the goal of winning enough seats that they could establish a coalition with the Green Party. For her part, Merkel pledged to win a governing majority with the FDP, although she publicly disagreed with some of their stances on economic issues.
Since it was four years since the last German election, readers of this brief are probably not familiar with what took place. In this election, then-German Chancellor Gerhard Shroder was predicted to lose his government to Merkel. Polls prior to the election showed that Merkel had a seventeen percent lead, but as yesterday’s New York Times revealed in a summary of the German election, Merkel’s pro-business stance alienated some Germans who were skeptical of reforms and her lead practically evaporated. On election day, Germans that supported the major parties split almost evenly and the CDU ended up beating the SPD by one percent of the vote. This only gave them four more seats in the Bundestag an led to an awkward situation where both Merkel and Shroder proclaimed victory. What made this situation more awkward was that the CDU and the FDP did not have the ability to form a government on their own, so if the CDU wanted to govern Germany they had to persuade one of the left-leaning parties to join them. However, the Left Party refused to be a part of any government with a major party and the FDP did not want to govern with the SPD. The Greens were also cold to negotiating a CDU/FP/Green coalition (called the “Jamaica coalition” due to the colors of the parties). After intense negotiations, the CDU and SPD decided to form a “grand coalition” to govern the country and Merkel would become the chancellor.
What this caused for the 2009 election was an awkward arrangement where the CDU and SPD tried to campaign against each other, but were more civil because there was the possibility of them having to rule Germany in a grand coalition again. In the nationally televised debate between Merkel and Steinmeier several Germans complained that it was like watching a wife and husband respectfully disagree on issues. Economists had argued that a return of the grand coalition would not be great for the German economy because the CDU had to halt some economic reforms and cave to the SPD on some economic issues such as the minimum wage in order to keep the coalition going. In fact, when the grand coalition was first formed, political pundits said it would be lucky to last two years but it surprisingly fulfilled its full term.
Since both the CDU and SPD were in government, they had the awkward arrangement of defending the government’s record and saying they could do a better job alone. This arrangement also made the election campaign quite boring, which The New York Times concedes was not helped by Merkel’s unenthusiastic persona.
The major issue in the election was the economy. Merkel said that she wanted a more flexible labor market, but dismissed the idea of the FDP that changes need to be adopted that make it much easier for business leaders to fire workers. Also, Merkel argued that she wanted to create new jobs, extend the life of nuclear energy, and have tax cuts. One of the key pledges of the CDU’s platform was for an across the board tax cut of $22 billion. The SPD failed to mount an effective challenge to many of these issues, prompting many in Germany to argue that they represented the same policies as the CDU and there was little reason to see them as an opposition party in the election.
Election Results
According to the latest election results from The Economist online, the CDU/CSU captured 33.8% of the vote, the SPD got 23%, the FDP received 14.6%, the Left Party won 11.9%, and the Greens received 10.7% of the national vote. Surprisingly, the Pirate Party, a party that favors online privacy and a revision of copyright laws, received two percent of the vote.
Although the CDU won the election, it was a horrible night for both major parties. As Bloomberg News indicated, their combined share of the popular vote has fallen from 77% in 2002 to only 57% in the latest election. Also, as The Economist points out, although the CDU’s vote total give it 42 seats in the new Bundestag, it was the worst election result in terms of percentage of votes won that the CDU has ever had. Also, the SPD experienced its worst showing in a national election since the end of World War II.
Voters in Germany seemed very apathetic about the election. Complaining about their lack of choices, Der Spiegel, an online German magazine, commented that many voters who participated did so out of a sense of duty instead of being enthusiastic about it. A record low turnout of 70-72% has been reported by most major international publications.
The FDP was the biggest winner in the election, gaining thirty-two seats. The New York Times revealed that the FDP’s performance is likely due to voters preference in this election for minor parties and that voters trust it more than the other parties in guiding the economy. Germans tend not to favor big government solutions to many of the problems brought on by the economic crisis, evidenced by Merkel’s approval ratings taking a hit when she tried to bailout Opel, and the free market solutions espoused by the FDP echo some of this sentiment (although more radical parts of the FDP agenda are not endorsed by most Germans).
The election result will enable the CDU to form a governing coalition with the FDP. The FDP’s leader, Guido Westerwelle will become vice-chancellor and foreign minister and will become the first openly gay politician in German history to hold those positions. Extempers who see pictures of the election will see that supporters of the CDU and FDP are wearing black and yellow, which is symbolic of the party’s colors (the CDU is black and FDP is yellow).
The SPD’s poor election showing is likely to cause it to rethink its election strategies. Although it ruled out forming a coalition with the Lefty Party, it may need to reconsider its stance on that issue. As The Economist postulates, the question the SPD has to ask itself is whether they want to be a party of the far left or a party that favors moderate economic reform. In this election, the CDU effectively outmaneuvered them on the latter so they may resort to the former, which possibly enables a left-wing coalition to take on the CDU and FDP by 2013 at the latest.
Governing Germany
The new coalition will likely have to do some tax reform. The Economist pointed out that although Merkel does not want a total overhaul of the tax structure (the FDP want to get rid of the progressive income tax and create three income tax brackets) there will be some tax reform done because the FDP has said they will not sign a coalition agreement without it included. There may also be clashes within the coalition on other economic issues, such as the FDP’s support for looser labor rules that would let businesses fire workers more easily and its advocacy of social security reforms. Despite these differences, the business community was very warm to the election result, arguing that it will be a much more friendly government than the grand coalition. It will also be interesting to see what tax reforms the new government can push through as the grand coalition committed to reducing deficits and Germany is bracing for its largest deficit ever this year.
Also, there may be clashes within the coalition on security issues. The CDU has taken a firm stance on domestic security, especially after several terror plots have been avoided. Germans have been warned by Osama bin Laden that they have been targeted because of German troops being in Afghanistan and the public is on high alert for suspicious activity. However, the CDU’s vigilance on security runs counter to the FDP’s emphasis on civil liberties. The FDP opposed the grand coalition’s attempts at expanding the powers of the national intelligence service and is heavily suspicious of other government action taken in the name of security.
The election will also not change Germany’s foreign policy. Selecting Westerwelle as foreign minister is interesting because of the FDP’s reputation as an economic party, but he should be able to communicate the German governments foreign policy priorities effectively. The FDP’s foreign policy agenda supports action in Afghanistan and favors closer ties with the United States, which have also been tenets of the grand coalition. Bloomberg News also points out that it is possible that Germany’s military could get an update under this new government because the FDP favors abolishing the military draft in Germany and replacing it with a professional army.
Finally, German energy needs are likely to still remain focused on nuclear power. Neither the CDU or the FDP is opposed to the use of nuclear power and are likely to extend the life of the country’s seventeen nuclear power plants past the 2020 deadline imposed by a previous SPD-Green government. This is likely to be popular with German planners who fear that the country may end up too reliant on Russian gas if the nuclear power plants are not kept running.