The sense of an ending: Contours of the next German government

Note from Berlin



It took five days and one long night to negotiate; and while the outcome is technically nothing more than a results paper from informal talks, in reality last week’s agreement between the Christian Democrats and Social Democrats will go on to form the basis of a coalition agreement and governing programme for the next four years.

The paper’s message is all about intentions, with only occasional references to instruments and strategies. The phrase ‘We want…’ appears 130 times, in contrast to about 50 mentions of ‘We will…’ and even fewer remarks about how such goals will be achieved. The party leaders and their negotiating teams have skilfully woven together a conglomerate of positions and preferences from both sides, covering all major aspects of domestic and foreign policy.

In contrast to typical coalition agreements (as well as the themes of the past electoral campaign), Europe plays a key role in the document. It is listed ahead of all domestic and other foreign policy issues, suggesting that European policy will be the foundation the next Grand Coalition in German politics.

Indeed, the need to lead, shape and to strengthen Europe has been the principal narrative of both Chancellor Angela Merkel and SPD-chairman Martin Schulz of late when discussing the need for a stable German government based on a reliable majority in the Bundestag. Merkel has used the argument to reject the proposal of a minority government of her party or the option of new elections, while Schulz needed the European agenda as a higher-level responsibility of German politics to justify the u-turn he made since ruling out another grand coalition on election night.

Readers of the paper will hardly grasp that context. It is neither about a new founding of Europe nor about major changes in EU policies. At least not openly: Many contentious issues of disagreement between member states are brushed over without committing the new government to a precise position.

Essentially, both the CDU/CSU and SPD want “more Europe” in a general sense; they want it in cooperation with France; and they want to bring along most if not all member states in pursuit of this goal, without undermining the single institutional framework of the EU.

The paper contains extensive lists of principles and goals of integration, along with some specific outputs such as an EU minimum wage scheme, some tax harmonisation (including a financial transaction tax), a European Monetary Fund within the treaty framework, added conditionalities to labour mobility in the EU, reform of the EU budget and a reframing of its solidarity argument.

East and Central European readers will understand the agreement as directed against their desire for more EU funding without additional policy commitments. Southern Europeans, meanwhile, will note the readiness to pay more into the EU budget and to strengthen growth in the EU, but have concerns about enhanced competitiveness and stability criteria.

As for Macron, he will see that the German government is openly prioritising its relationship with France and that it is ready to cement the relationship with a new bilateral treaty. But he will also notice that the paper does not endorse many of his high-flying ideas from the Sorbonne speech held days after the German election in September 2017.

There is no mention of a substantial Eurozone budget, for example. Instead, the agreement sees room for a specific section of the EU budget to fund economic stabilisation and social convergence or support structural reforms in Eurozone countries, “which in future could become the basis of an investment budget for the Eurozone”. This is as close as Christian Democrats and Social Democrats come to Macron’s idea.

Similarly, French proposals on security and defence are not rejected as such but framed in such a broad way that little room is left for specific military goals and strategies. Thus, the agreement does not mention the 2 percent spending target set by NATO when speaking about the armed forces, but it specifically commits the next government to the old 0.7 percent goal for ODA.

The key to understanding the agreement, however, cannot be found in its provisions, neither on Europe, nor on domestic policy issues. The fact is that a majority government is needed, because voters are believed to disapprove of a failure to deliver a government based on the election outcome. Merkel’s CDU and the Bavarian sister party CSU have demonstrated consistently that they want to form a coalition, and — for lack of alternatives — are ready to build a government with the SPD.

A refusal by the Social Democrats to enter into a coalition would mean a further shrinking of the party if new elections became necessary. That does not mean that the desire of party functionaries and members to go into opposition has gone away. Many of them believe that that is the only way for the SPD to regenerate, rejuvenate and to grow again. For this reason, the leadership’s u-turn had to be carefully packaged to be accepted within the party. Schulz had to promise an open-ended process which should allow for all possible outcomes - from opposition, to toleration of a minority government, to sectoral or temporal coalition building, right through to a regular coalition.

All of these options will be on SPD delegates’ minds when they convene on 21 January to review and debate the agreement paper. Some state-level party organisations have already ruled out approving a grand coalition, while some have taken the opposite position.

In the debate, Schulz and his colleagues in the leadership will advance three arguments: First, that a coherent and capable Europe needs a strong German government, second, that the agreement reflects social-democratic essentials such as social justice, and third, that the party membership deserves to have a final say about a formal agreement — which will only happen if the party convention now paves the way for formal negotiations.

Should the party convention follow that reasoning, formal negotiations will begin soon; the membership vote could be held in early March, and a government could be in office before the Easter break.

The message of this government would not be one of a new beginning, but one of pragmatism and responsibility. Merkel and Schulz will govern, but won’t inspire. This grand coalition will symbolise the beginning of the end of one era, rather than the launch of a new one.

Of course, a failure to form a government would force a more abrupt ending of that era. Should either one of the two SPD votes result in a No, Germany would face new elections before the end of June or possibly after the summer break.

Either way, the days of a towering role for Germany in Europe seem behind us.

Read more on: Note from Berlin, European Power, Cohesion & Governance, National Politics, Elections & Referendums

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