After more than four months of uncertainty and paralysis in Berlin, Angela Merkel’s Christian Democratic Union (CDU) and the centre-left Social Democrats (SPD) have reached a prospective coalition deal. Both leaders are seeking to renew the “Grand Coalition” that has been in post for the last four years, with the CDU and SPD the two largest parties in Germany’s Bundestag.
The Federal election took place on 24 September, and Germany has been led by a caretaker government since that date. It has been an unfortunate time for Germany to be without a permanent executive – Merkel had been regarded by many as the de facto leader of Europe, with Germany the most powerful nation on the continent. This political vacuum meant that Brexit talks trundled on with less German influence, and it has also allowed upstart French President Emmanuel Macron to increase his profile on the world stage and press for policy initiatives such as a European finance ministry and separate Eurozone budget.
Merkel said that she was willing to make “painful compromises” in search of an agreement, and stressed her commitment to bring stability to Germany for the “good of the people”. Schulz spoke to his party’s federal congress in Bonn last month, imploring delegates to support a potential renewed “Grand Coalition” by plainly stating that “the choice is coalition negotiations or new elections”. The six-hundred delegates there approved the talks.
Schulz’s initial position after the election had been one of opposition to another “Grand Coalition”, but when the prospect of a “Jamaica” coalition floundered, (so-called because the colours of the CDU, Free Democrats (FDP) and Greens are those of the Jamaican flag) Schulz became a sudden convert to the idea.
Reports suggest that the SPD will retain the important ministries of Foreign Affairs and Labour, as well as gaining the crucial Finance position. Wolfgang Schäuble who served as Federal Minister of Finance from 2009 to 2017 was something of a pariah for many on the left due to his commitment to austerity and uncompromising attitude towards nations in southern Europe during the Eurozone crisis, so an SPD minister in that position will be a significant change from Merkel’s traditional approach. Schulz himself is reported to be a probable Foreign Minister and may even relinquish his leadership of the party, with the CDU’s Bavarian sister party, the Christian Social Union (CSU), getting a strengthened Interior ministry with new powers.
There are number of agreements that have been made public, and more will released in the coming weeks. A ban on arms exports to countries taking part in the Yemen War has been agreed, which means that Saudi Arabia will be excluded – important as they are one of the biggest purchasers of German weapons. An investment budget for the Eurozone has also been agreed, and combined with an SPD finance minister this has been championed as “an end to the austerity mandate”.
Immigration has been controversial in Germany with Merkel’s open refugee policy and the rise of the Alternative für Deutschland (AfD), but there was an agreement on the number of refugees being brought into the country for family reunions – this has been capped at 1000 per month.
The deal now goes to the SPD membership for approval. Despite the prospect of their party serving in government there is reticence in some quarters, with a view that they are essentially becoming indistinguishable from the CDU. The two parties have been in a ‘Grand Coalition’ for eight of the past twelve years. A stint in opposition would allow the SPD to further differentiate themselves from the CDU and formulate a more distinctive policy platform. The prospect of a rebuilding process has significant appeal, especially considering the party’s worst ever result at the last election and a further drop in recent polls showing that they are only a few points ahead of the AfD. The threat from the AfD coupled with rising support for other parties such as the FDP show a lack of contentment with the political consensus between the CDU and SPD.
The alternative to a Grand Coalition may not necessarily be fresh elections as Schulz had suggested, but instead a minority government. Whilst there has been some consternation in Berlin at this idea, many countries around Europe manage it perfectly well. It would allow the CDU to govern, and the SPD to renew itself in opposition.
If the SPD’s 464,000 members approve the deal then the parties will formally sign the coalition contract, and a Cabinet can be put in place. Then, finally, the full Federal government will be up and running once again.