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.