Merkel triumphs but faces tough negotiations

There are still constraints on chancellor’s power

After her triumph in the September 22nd election Angela Merkel stands astride Germany, and Germany, as economy and economic policy maker, stands astride Europe. Yet there are a number of qualifications to her triumph. First she is a consensus builder not someone like the late Margaret Thatcher who imposed her own ideology. Second, the claim that she is five seats short of an overall majority for her party is misleading since despite the fact that her Christian Democratic Union (CDU) and Horst Seehofer’s Christian Social Union (CSU) form a single faction in the Bundestag, the CSU is very different—more rightwing for example on taxes, more nationalist and sceptical in relation to the priority Merkel has given to holding the euro area together. Third, a small majority of seats in the Bundestag as well as the existing large majority of seats in the Bundesrat are held by left of centre parties. If it were not for the promise of Socialdemocratic Party (SPD) leaders that they would not ally with Die Linke, the left wing party that is particularly strong in the east and won 9% of votes overall, Merkel would have had to give way to an SPD-led government and go into opposition.

Finding a partner will not be easy

Merkel needs a new coalition partner since a minority government would despite her stature be seen as a weak one and she has lost her former partner, the Free Democratic Party (FDP) which just failed to make the 5% threshold needed for parliamentary representation. The other possible partners, the SPD and the Greens are also fearful of the effect on their own popular standing of being a junior partner to Merkel. Indeed the SPD experienced a severe loss of their vote between the 2005 election after which they formed a coalition with the CDU/CSU in the first Merkel government and the 2009 election. Thomas Kielinger, the London correspondent of Die Welt, has even compared her with the black widow spider, which has a habit of killing her mate. In fact any junior coalition partner has the problem posed by shared responsibility but limited influence as in the case of the UK’s Liberal-Democratic Party in coalition with the Conservatives.

A coalition with the SPD is much more likely than one with the Greens (the latter being possibly compatible with the CDU but would not be favoured by the CSU). But a CDU/CSU-SPD coalition can by no means be taken for granted. Negotiations will be long and arduous and the SPD can be expected to bargain hard to be in a position to have some rewards to show to the electorate in four years, both in terms of policy – they may press for an extension of sectoral minimum wages into a national one for example – and in the profile of their ministers. However, the foreign ministry previously held by Guido Westerwelle of the FDP makes little impact on domestic opinion and the CDU looks likely to try to keep Wolfgang Schauble as finance minister. In any case the finance minister will spend much of his or her time trying to manage wider euro area issues and the fact that the SPD’s Peer Steinbruck was finance minister in the last CDU/CSU-SPD coalition did not prevent a very poor election result at the end of the term.

But Merkel will keep control of euro area policy 

If a coalition is agreed with the SPD, the one key policy area most watched from outside Germany—policy towards euro area partners—is not likely to change as a result of the negotiations. Although SPD spokespeople called for a somewhat more flexible line to ease the pain being caused by deleveraging in southern member states and Ireland, it is not likely to push too hard since there are few if any German votes to be won by being easier on other countries. Moreover, the CSU which considers Merkel’s policy already to have over-committed German financial resources will pull in the opposite direction. And it is likely that Merkel herself will give priority to maintaining control in this area, since she knows that its success or failure will be key to how she will be remembered. If the SPD were to push hard for the removal of Schauble she would at least insist on someone whom she could trust and work with.


Is Citizen Berlusconi now equal before the law?

Senate moves to expel former prime minister

The ongoing process in the Italian Senate to expel Silvio Berlusconi from the Senate and to deny him the right to stand in subsequent elections in the face of threats (now abandoned) by Berlusconi and his supports to bring down the coalition government, is a historic milestone. It does not mean the end of Berlusconi as a major influence on Italian politics. Beppe Grillo, the leader of the Internet-based Five Star Movement who has insisted that its members of parliament vote against any government including the any of the other main parties despite being excluded from sitting himself because of a manslaughter conviction resulting from a road accident 30 years ago. Similarly, Berlusconi will certainly try to dictate what members of his party do from outside parliament. Despite his 76 years and probably not ideally healthy life style, he remains like a cat with nine lives. Moreover, his daughter, Marina, who has successfully taken over his main media and business interests, might well—despite denials—move into politics when he finally does step down.

However, the move does mark a move to tackle the deep flaws in Italy’s democracy. It has not been a country in which all are equal before the law. Berlusconi had been able to use political connections to establish a near monopoly in the emerging private television sector in the 1980s but at the time of the “Clean Hands” judicial investigations which brought down the two leading government parties the Christian Democrats and Socialists and in particular Berlusconi’s close friend Bettino Craxi, he risked losing these privileges and was threatened by prosecutions launched against him for business practices which gave a low priority to compliance with the law. Although Berlusconi has clearly liked excercising what proved to be a flair for politics in the television age, there can be little doubt, in view of the proportion of legislation enacted by governments he led which was designed to reduce the risks of being sentenced for the crimes for which he was being prosecuted, that a powerful contributory motivation to his political career has been to ensure that he and his businesses remained free from the need to comply with laws like transparent accounting and payment of taxes.

His main opponent was a party which, despite being actually very moderate, had only dropped the word Communist from its name a few years earlier. It could do little to exploit his problems with the law. His claims that the prosecutors were part of a leftwing conspiracy which were already given some credence by the fact that the judiciary was excessively politicised, would have been given more credence had former communists given more prominence to his judicial problems. Moreover, at the time to have denied office to a leader who had built an alliance able to win a majority in parliament, would have been even more anti-democratic than breaching the principle of equality before the law.

The situation now is very different. Berlusconi has been the leading personality in Italian politics for almost 20 years and been prime minister for about half the time. He has clearly had his chance to govern Italy, which ended in his resignation in late 2011 because Italy was bankrupt and national and international investors would not lend at affordable rates as long as he remained prime minister. Insofar as he subsequently regained some support it has been by promising to reverse the measures that had regained confidence.

Future of Italian democracy remains unclear

Berlusconi is finally being treated more like an ordinary citizen who has transgressed. Although commutation of the four years prison sentence given in July to one year’s house arrest or community service is a lenient one, it is still humbling as will be the expected ban on standing for election.

There is little of the hope that existed 20 years ago for a new era and better era in Italian politics.  But changes are possible. The electoral system manages both to favour excessively one political grouping that achieves a plurality by giving it a majority in the Chamber of Deputies while not allowing it to govern effectively because of a different system for the Senate. A reform is needed but no agreement can yet be found on how to replace it.

There are three main political groupings: that around Berlusconi’s recently relaunched Forza Italia, including the xenophobic regionalist party Lega Nord; the Five Star Movement which led from outside Parliament by Beppe Grillo has so far determinedly resisted any form of political negotiation with other parties and remains a purely protest movement; and the left of centre Partito Democratico (PD) which is deeply divided between traditionalists–like the leader until his resignation in April, Pier Luigi Bersani—and the mayor of Florence, Matteo Renzi, who wants a modernized more youthful party. All of these groupings could look very different, assuming they still exist, in a few years time.