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On September 22nd, German voters handed Chancellor Angela Merkel her biggest electoral triumph and put her in a position to lead her third consecutive government. Merkel’s center-right Christian Democratic Union (CDU) and its sister party, the Christian Social Union (CSU) took 41.5% of the vote. The Social Democratic Party (SPD) took second place with 25.7% of the vote and the communist leaning Left Party took 8.6% of the vote. However, the CDU/CSU only won 311 seats in the 630 seat German Bundestag, which leaves it five seats shy of a majority. The CDU/CSU’s coalition partner, the Free Democratic Party (FDP) failed to win representation in parliament for the first time since 1949, so the CDU/CSU must now enter into a coalition with the SPD or the Green Party, which took 8.4% of the vote, to govern the country. A failure to form a new coalition would inaugurate new elections. The German election was watched closely by European political observers because Germany’s economy is the largest in Europe and it guides a great deal of European Union (EU) policy. A Merkel defeat might have spelled significant changes for how the EU is handling debtor countries like Greece and further complicated the process of European integration. Her victory shows that German voters have endorsed her handling of the German economy through the euro zone crisis that began in 2010.
This topic brief will discuss why the German elections matter and their outcome, the impact of the German elections on German domestic issues, and the impact of the German elections on Germany’s international role and its dealings with the European Union.
Readers are also encouraged to use the links below and in the related R&D to bolster their files about this topic.
Why Do the German Elections Matter? How Did They Turn Out?
Since it was established, Extemp Central has chronicled the German federal elections since 2006. Germany occupies a prominent role in Europe, a role that it has slowly embraced after reunifying in 1990. While Germany is still hesitant to flex its muscle in the international arena and commit itself to military action in hot zones like Libya and Syria, it has played an important role in directing the actions of the European Union (EU). Germany is the largest economy in the EU and as the UK Telegraph on September 23rd explains, there is a joke that the EU has two capitals: Brussels and Berlin. At a time when other European governments are struggling with their finances, Germany has a balanced budget, it is the third largest exporter in the world, and its economy is going through steady growth. The New York Times on September 23rd also notes that its unemployment rate is 5.3%. During the euro zone crisis, Germany had provided leadership on how to keep the euro stable and preventing the collapse of the single currency. It has drawn up and financed the bailouts that have kept Greece afloat, but to the chagrin of the Greek government and other reeling European governments like Spain and Italy, the Germans have emphasized the need for austerity to solve fiscal problems. The pain of this austerity has resulted in the growth of radical left-wing and right-wing movements in Greece and created anti-EU sentiment in Athens. Therefore, the German elections are significant because of Germany’s role as a leader of the EU and the impact that the elections could have had on Germany’s support for future bailouts in the euro zone. It is also significant that Merkel’s re-election is the first to take place in the euro zone since the 2010 crisis, which, as the Guardian of September 23rd explains, has toppled twelve European governments.
The 2013 election was notable for its lack of debate about policy differences among the major parties. A piece from Foreign Affairs on the eve of the vote called the election boring and a bad omen for European policy. Foreign Affairs explains that Merkel avoided taking a stand on controversial issues, did not explain where she stood on tough subjects like the environment, pension reform, or future EU policy, and then co-opted the platforms of other parties. The SPD found it hard to attack Merkel on significant issues because its leader, Peer Steinbruck was her finance minister when the 2008 financial meltdown took place, and it backed her policies regarding the euro crisis. Steinbruck aroused a great deal of controversy during the election by “flipping the bird” in a German magazine during the campaign, which was hardly an endearing image to German voters. The boring nature of the election helped Merkel’s CDU/CSU alliance. Extempers need to keep in mind that the CDU is the larger of the CDU/CSU alliance and that both parties do not agree on all issues, but they do not contest federal elections against each other. For example, the CSU runs candidates in the federal state of Bavaria, but the CDU does not.
Extempers would be wise to check out this graph of the voting results published on Twitter to get an idea of the percentage of the vote that was gained or lost by the major parties contesting the German federal election. The CDU/CSU went from 33.8% of the vote in 2009 to 41.5% and the SPD increased its share from 23% to 25.7%, but other parties suffered declines. The Left Party saw its share of the vote reduced from 11.9% to 8.6% and the Green Party went down from 10.7% to 8.4%. The projected seats for these parties are 311 for the CDU/CSU, 63 for the Greens, 192 for the SPD, and 64 for the Left. Since there are 630 seats in the Bundestag, which is the lower house of parliament, the CDU/CSU is five votes shy of obtaining an absolute majority.
When looking at the results above, extempers should also keep in mind that to gain representation in the Bundestag, a party must pass a threshold of five percent of the vote. Two parties that came close to this threshold but failed were the Free Democratic Party (FDP) which self-destructed as part of Merkel’s last coalition government, going from 14.6% of the vote in 2009 to 4.8% of the vote two weeks ago, and the Alternative for Germany (AFD) party that tried to capitalize on the anti-EU sentiment bubbling beneath the surface in Germany, which obtained 4.7% of the vote. The only other party to obtain anything sizeable was the Pirate Party, which favors Internet freedom, who pulled in 2.2% of the vote. None of these parties will earn representation in parliament, meaning that those voters that cast ballots for them will not have representation in the national legislature, which is dictated by proportional representation.
So, why have a threshold? The reason dates back to the Weimar Republic, the post-World War I German government. The Weimar Republic was known for unstable political coalitions because political parties refused to work with each other and governing alliances were unstable. The inability of a German government to obtain a majority in the Reichstag (what the Bundestag used to be called) led to governments ruling by decree by the President of the Republic. The system grew more unstable in 1932 when the National Socialist German Workers’ Party (NSDAP), which was the Nazi Party, won more parliamentary seats than any other group but did not have enough form a majority. The Nazis refused to enter into a coalition with another party unless its leader, Adolf Hitler, was made chancellor. In an attempt to break the deadlock, Hitler was made chancellor after an arrangement with the Catholic Centre Party in January 1933 and the rest is history. When German government was reconstituted after the Second World War, which was really the West German government since the Soviets controlled East Germany, proportional representation was reintroduced, but the five percent threshold existed to prevent minor parties from preventing larger parties from assembling a governing majority. The problem with the recent election, though, is that many votes were wasted on minor parties. Making Electoral Democracy Work, an organization of Canadian, American, and European economists, political scientists, and psychologists that study electoral rules, explains on September 27th that 15.8% of the votes cast in the recent German elections were wasted, which is a record for post-war Germany. This demonstrates that proportional representation systems do not always give all voters a voice in government. Germany is not the only government that uses a threshold, as Der Spiegel, a German magazine that all extempers should cut and read, explains on October 4th that Denmark (2%), Sweden (3%), Poland (5%), Czech Republic (5%), Estonia (5%), Latvia (5%), and Lithuania (5%) all have thresholds that parties must reach to get into the national parliament. However, with so many voters disenfranchised, an estimated 6.8 million, there have been calls to re-evaluate the threshold or lower it to 2-3%. The Der Spiegel article previously cited explains that in 2011 Germany’s Constitutional Court overruled the threshold for European Parliament elections because fractured party politics do not really matter at the European level, but it is unlikely that they will abolish the threshold for national elections. Some have called for Germany to adopt a system like Australia, whose elections we covered a few weeks ago, whereby voters could cast an alternate ballot for another party that could count if the initial one that they voted for did not meet the required threshold to enter parliament.
While it seems this discussion of thresholds is not that significant, it really does matter in the big picture. If the threshold were lower, the FDP and AFD would have received representation in the Bundestag. This would have given Merkel and the CDU/CSU a right-wing coalition partner that would be more amenable to its agenda than working with a left-wing group in the SPD, the Greens, or the Left in a new coalition government. In fact, if you add up all of the votes that the right-wing parties received in this election, they are more than what the left-wing parties received. However, the composition of the next Bundestag will actually have a majority of left-wing parties. This could force Merkel to sacrifice some of her agenda in her next term and could reduce some of the momentum of her latest victory. Making Electoral Democracy work criticizes the CDU/CSU’s campaign work because they point out that if just .2% of the votes for the CDU/CSU cast a “borrowed” vote for the FDP, then the FDP would have reached the necessary 5% threshold required to enter the Bundestag and this would have enabled Merkel to form a right-wing government instead of entering into a coalition across the aisle. Thus, a lack of bad campaign planning will force Merkel to make concessions to parties that have very different agendas than what she is proposing.
The Domestic Impact of the German Elections
Without question the biggest loser of the recent federal elections was the FDP, who not only lost its position as a member of Merkel’s coalition, but will not be in parliament for the first time since 1949. The FDP, as the Cato Institute explains on September 27th, is a classical liberal party that is much like the American Libertarian Party. The FDP favors laissez-faire economic policy and social tolerance. In the 2009 elections they received 14.6% of the vote, but the problem is that they promised tax cuts and deregulation. The euro zone crisis and the fallout from the 2008 financial crisis did not allow it to do this and its role as a junior partner in Merkel’s coalition also made it difficult for them to enact their policy agenda. As Cato explains, the FDP ended up part of a government that financed big bailouts for Greece, Ireland, Portugal, Cyprus, and Spain and a closure of nuclear power plants, which violated its agenda. The FDP also faced competition from the AFD, which could use its position outside of government to criticize the European orientation of Merkel’s government and her bailout policies. German political analysts speculate that many FDP voters fled to the AFD in the recent election, which accounted for the FDP’s poor showing. After the election results were announced, FDP leader Philipp Rosler stepped down, failing to bring the party’s poll numbers up after he held the job for twenty-eight months. He will be replaced by Christian Linder, who leads the western state of North Rhine-Westphalia. However, as Der Spiegel explains on October 4th, party loyalists question whether Linder gives the right impression to voters. The FDP also faces significant problems because its finances are in chaos and it will not receive funds from businesses, lobbyists, or politicians since it does not have representation in the national parliament. The party may have to move out of its headquarters in Berlin and has already laid off five hundred employees. The 2013 election may result in the complete destruction of the FDP and it may eventually merge with the AFD before the next round of elections in 2017, but for now the party says that it will not adopt an anti-EU platform.
The loss of the FDP is a significant blow to Merkel, although she did not appear phased about the FDP’s fortunes since the Der Spiegel article previously cited mentions that she sent a short text message to Rosler after the election results were announced. Merkel now has to obtain a majority in the Bundestag to become chancellor for a third time, but this will require her to form a governing coalition with either the SPD, the Greens, or the Left. Last week, Merkel began negotiations with the SPD in forming a new government and the talks appeared to go well. The concept of the CDU/CSU and the SPD joining forces is called a “grand coalition” because it would bring together the two parties that would have won the most votes in the last election together into the same government. Merkel has a history of working with the SPD because her slim victory in the 2005 German federal elections forced her into a grand coalition with the Socialists, but the rank and file of the SPD are hostile to going back into government with Merkel. They suffered a terrible defeat in the 2009 elections after being in a coalition with her and party regulars fear that the party would lose its identity by joining a CDU/CSU-led government. Reuters on October 4th explains that the SPD’s leadership has said that it will submit any grand coalition agreement to its 472,000 membership for a vote, which could derail the chances of a grand coalition forming. Merkel has also indicated that she is willing to work with the Green Party and has scheduled a meeting with them to keep her options open. She eschews working with the Left Party because of its communist sympathies.
Extempers reading this might stop after that last paragraph and ask: if the left-wing parties have more seats in the Bundestag why don’t they form a government of their own and push Merkel to the curb? It is true that the Left Party, Greens, and SPD have more seats in the Bundestag than the CDU/CSU, but they do not agree on the same issues. The SPD and Greens are amenable to working with each other, but they consider the Left Party far too radical. The Left Party’s leader, Gregory Gysi, as the Economist points out on September 24th, is being investigated over his links to the East German Stasi (the East German secret police) in the 1980s and the party has hostile views toward capitalism and the EU. Gysi actually wrote an op-ed for the Guardian on September 27th and argued that the SPD and Greens were guilty of ushering through bailouts that only helped banks, investors, and hedge fund managers and that the austerity program that Germany is enforcing in Southern Europe is not working. Before the election, the SPD and Greens announced that they would not form a coalition with the Left, so the idea of forming a red-red-green coalition (red are the colors of the SPD and Left) is out of the question. Furthermore, even if the left-wing forces were able to come to terms and form a left-wing government it could backfire because they would be leaving the right-wing out of government despite it actually winning the most votes in the recent election. This would constitute a democratic usurpation of power and may radicalize elements of the right-wing before the next elections, which would be bad for Germany’s EU policy and its social stability.
Although the SPD does not like it, they will probably enter into a grand coalition with Merkel’s government and will secure some concessions from Merkel that she wishes she did not have to give. The Reuters article previously cited explains that the SPD wants higher taxes on the rich and they also want a national minimum wage. The CDU/CSU may be able to compromise on these issues by pledging to crackdown on ax evasion and close corporate loopholes in the German tax code and agree to pass a national minimum wage, although not the high $11.60 that the SPD wants. An agreement will also have to divide government portfolios, which will lead to the SPD getting more ministries than the FDP would have received if they could have crossed the five percent threshold. Merkel has dictated that the chancellor position and the finance ministry are not negotiable, but the SPD could take over the foreign ministry. Both parties will also have to agree on plants for communications, transportation, and energy investment. Still, Merkel has the leverage in negotiations because a failure to work an agreement with the SPD or the Greens (although Merkel does not favor a coalition with the Greens because they are a party experiencing internal upheaval over their declining electoral fortunes) could result in new elections. Project Syndicate, a blog of notable political figures, explains on September 24th that if new elections were held the CDU/CSU would win a larger number of seats and would obtain an absolute majority to govern, which means that the SPD and the Greens would find themselves on the outside of the halls of power. The incentive to play a role in government instead of outside will likely lead the SPD into a grand coalition, which is what nearly two-thirds of German voters want.
Energy is one of the challenges that Merkel’s next government will face because she has pledged to move Germany away from nuclear power and towards alternative energy sources. Her about-face on this issue took place after the Fukushima nuclear plant disaster in Japan in 2011. However, this policy carries risks politically and economically. The Christian Science Monitor explains on October 4th that the political problem is that Germany already pays the highest electricity prices in Europe and moving to green alternatives might make them go higher. The economic problem is that if the green alternatives are not sufficient for Germany’s energy needs then it could disrupt German economic growth and bring the rest of the EU down with it.
Another issue that the Merkel government will have to confront is an aging population. The British Spectator notes on October 5th that from 2015 onward Germany will experience a shrinking population. By 2020 it will have 80 million people, but by 2060 it will be reduced to 64 million people. Germany has poor demographics to sustain its economy, but trying to push for an immigration reform package to bring in high-skilled immigrants may prove highly controversial within the CDU/CSU ranks and the public at large. There are already anxieties among the right-wing about Muslim immigration into Europe, so this could become a powder keg in future German elections.
The Brookings Institution also points out on September 23rd in a special report, that extempers should be sure to print the .pdf off for, that some of Merkel’s domestic agenda could be frustrated by left-wing control of the Bundesrat, which is the upper house of the German parliament. Much like her right-wing counterpart in Australia (although the Australian counterpart could hardly be labeled as “centre-right” like Merkel is), Merkel may possess control of the lower house of parliament, but the upper house could frustrate agenda items that they do not agree with. The Bundesrat must sign off on federal legislation regarding tax issues and administrative costs, as well as issues that are handled by the German states, so any economic reforms will constrict Merkel’s ability to directly impose her agenda on Germany, at least until 2015 when the composition of this body may change. Brookings argues that a grand coalition may smooth this path because it will create policies that the Bundesrat is more likely to support.
The International Impact of the German Elections
For the rest of the season, extempers are likely to draw more questions about Germany’s relationship with the EU than they are about domestic German political issues (if you exclude questions that may appear in the short-term about what the composition of the new coalition government will look like). Merkel’s victory signals that Germany will stay the course regarding its handling of the euro zone crisis, seeing austerity as the best way for beleaguered nations like Ireland and Greece to handle their finances and showing a willingness to provide bailouts in return for structural reforms.
One of the immediate issues that Merkel will have to solve is the British role in the European Union. Faced with declining poll numbers, David Cameron’s Conservative-Liberal coalition is trying to shore up its base and is moving to restrict welfare benefits to illegal immigrants, reform its National Health Service (NHS), and find a way to reduce the powers of the EU over British policy. Cameron has proposed that the EU rewrite some of its rules regarding the rights of new immigrants to host countries benefits and also wants a decentralization of powers from Brussels. The UK Telegraph of September 23rd reveals that these positions are consistent with those of German voters, since German voters by a 2:1 margin favor allowing national parliaments to be able to block unwanted EU laws. Cameron’s fear is that the EU is moving towards establishing a financial transaction tax, which could hurt London’s financial services industry, and he wants the British to have the ability to get around the tax. The Telegraph reveals that Merkel is probably amenable to concessions that would decentralize some EU powers, but she does not want the founding treaties of the organization to be torn up by Cameron or other anti-EU forces throughout the continent. A grand coalition, though, is likely to reduce Merkel’s flexibility when handling EU insurgents because left-wing forces in Germany favor more EU regulations like their French counterparts and they do not favor decentralization policies that they fear endanger the future of the European project. Therefore, a grand coalition is likely to produce some foreign upheavals inside of the EU.
Although Merkel’s policy of austerity and work with countries on bailouts is likely to continue, German voters are not happy about paying for the financial problems of EU states. It is expected that Greece will need a third bailout in the near future and this will have to be financed by German funds, as well as those of other EU members. A new Greek bailout would likely produce some domestic upheaval outside of the Bundestag, as the AFD has pledged to keep campaigning against bailout policies. The AFD believes that struggling countries should leave the euro zone, with the potential of being readmitted later, but they fail to see the use in allowing these countries to continue extracting money from Germany and other relatively healthy economies to remain afloat. The Council on Foreign Relations in an interview piece with Whitney Shepardson Senior Fellow Charles A. Kupchan on September 26th explains that a big risk for Merkel’s government is if a large EU economy like Italy, Spain, or France suffers a significant financial crisis. This might necessitate the creation of a debt-sharing plan among EU states that would create “Eurobonds” that German voters would have to fund and be liable for. It is still uncertain whether German voters would be comfortable maintaining the debt of other EU states and this could create a political crisis within Germany if it occurs.
Finally, Merkel’s foreign policy orientation will likely keep Germany focused on European affairs. The Council on Foreign Relations piece previously cited explains that Merkel views Germany as an instrument of restraint in the international arena, so she is unlikely to get involved in the Iranian nuclear crisis or the Syrian civil war. Nevertheless, considering Germany’s high profile position within the EU, which economically corresponds to a strong voice inside of the G20, it is possible that the next four years may see more demands placed upon Germany to play a larger international role whether it wants to or not. The Germans are still skeptical of engaging in such a role, as the bad legacy of World War II still haunts the nation, but they may be forced to take it on as European governments struggle to resuscitate their economies.
Extempers are also encouraged to listen to this podcast from the Brookings Institution about the outcome of the German elections.