The German government and the perils of Grand Coalition

After months of negotiation following an election in September, Germany’s two main parties, the Christian Democratic Union and the Socialist Party of Germany, have agreed to form a government, subject to a vote of approval amongst SPD members. This will be a continuation of the so-called ‘Grand Coalition’ government of the CDU and SPD, which has ruled Germany since 2013. But although the government remains the same, Germany has fundamentally changed. Angela Merkel, the CDU’s leader and Chancellor of Germany since 2005, has had her authority weakened. Her party suffered a significant slump in the election, as did Martin Schultz’ SPD. Voters has grown sick of the Grand Coalition; the constant need to compromise across such a broad ideological spectrum has prevented radical reforms from being enacted. Merkel’s popularity has taken a hit partly because of her controversial decision to admit refugees en masse. Many in her conservative base have defected to the Alternative für Deutschland party- a right wing populist outfit who have entered the Bundestag for the first time.

The likely continuation of the Grand Coalition for the next four years will be to Germany’s detriment. Plagued by internal divisions, the country will not be able to lead on the European stage as effectively as it has since reunification. This is good news for the French, who have long resented German ideas dominating the EU. Macron will push for his ‘Europe that protects’- a more social democratic Europe with more fiscal integration of the Eurozone. While not a protectionist, Macron believes European consumer standards should be put before making lopsided trade deals with more neoliberal countries like America or China. The hard line Germany has taken regarding southern European debt repayments is likely to the softened. The EU’s Brexit position won’t change significantly, but may harden due to a Macron-led EU’s determination not to allow British cherrypicking to undermine European unity.

The Grand Coalition will also be bad for Germany’s domestic politics. The country is becoming increasingly polarised, with parties of the radical right and left having increased in popularity at the expense of the centre. On the left, discontent is rising due to slow-growing wages, increasing housing costs and poor infrastructure. On the right, there is frustration at Germany’s culture of political correctness, mass migration from the Middle East, the lack of defence spending and commitment to NATO, and unusually high taxes to pay for a lavish but unsustainable welfare state. Germany needs a government committed to radical and swift reform. Merkel’s cautious nature and status as an incumbent for the past twelve years means she is incapable of delivering. Equally, Schultz’ SPD is for the most part, a defender of the status quo. Cautious centrism has led to the decline of European centre-left parties; the notable exception being the UK’s Labour Party, which has embraced left wing populism and benefits from First Past the Post.

Overall, Germany’s political parties have governed the country relatively well since reunification. The economy’s long term performance has been stellar. A strong manufacturing base has been retained. Germany’s level of deprivation isn’t on the scale seen in the US or the UK; poverty is kept down by the availability of well-paying blue collar jobs and a comprehensive welfare state. Germany has a lot to be proud of, having helped the EU deal with the challenges of mass migration, economic stagnation and Russian aggression. But Germany’s success is owed to its responsiveness. It encouraged Turkish migration to mitigate its post-war labour shortage. It passed labour reforms to reduce the rigidity of its labour market, while keeping unemployment low and job security high. It has successfully clamped down on hate speech and extremism in the post-Nazi era. But the continuation of a Grand Coalition threatens all this. Preserving the status quo in a changing world is not an option. Germany must find its own Macron: someone who can make reforms without ceding ground to extremism. The Grand Coalition is likely to be sclerotic and inflexible. If it is, Germany’s economy and influence will suffer, and disillusionment and cynicism will only increase.

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