Germany

Merkel Will Win; But How Will She Govern?


German Chancellor Angela Merkel is mobbed by supporters arriving at an election campaign event on Sept. 19

Photograph by Odd Anderson/AFP via Getty Images

German Chancellor Angela Merkel is mobbed by supporters arriving at an election campaign event on Sept. 19

Germany holds parliamentary elections on Sept. 22, and with Angela Merkel’s approval rating at 70 percent, it’s clear that voters want her to serve a third term as chancellor. Here are some questions and answers about this weekend’s election.

Why is support for Merkel so strong?

Voters applaud her stewardship of the German economy and her management of the euro zone debt crisis. German unemployment is at 5.3 percent, a two-decade low and less than half the European Union average. The 59-year-old chancellor’s demands for fiscal austerity as a condition for bailing out crisis-hit European neighbors also have pleased German voters. “We help each other in the euro area, but we have good reason to help only under conditions—that other countries bring order to things that are right now not in order,” she told supporters at a Sept. 19 rally in Hamburg.

Will Merkel keep governing with the coalition she has now?

That looks increasingly unlikely. Her Christian Democrat-led bloc has about 40 percent support in recent polls, far more than any other party. But the pro-market Free Democratic Party (FDP), the junior partner in her current coalition government, is struggling to reach the 5 percent threshold required for representation in the Bundestag. At the same time, the euroskeptic Alternative for Germany party has been siphoning off CDU voters. Even if the FDP squeaks through, Merkel may fall short of a working majority. The SDP couldn’t cobble together a majority, either. It’s drawing no more than 28 percent in the polls, and its allies in the Green Party have no more than 10 percent.

What would she do then?

Unlikely as it might seem to Americans, she’d probably bring the main opposition party, the center-left Social Democrats (SPD), into a so-called grand coalition. She headed such a coalition with the SPD during her first term as chancellor, from 2005 through 2009.

Wouldn’t that paralyze the government?

No, because the CDU and SPD agree on many key issues. Both are politically centrist and strongly pro-euro. Merkel during the campaign embraced some SPD proposals, such as expanded minimum-wage protection and limits on household rent increases. And as Merkel has acknowledged, the SPD government of her predecessor, former Chancellor Gerhard Schröder, deserves credit for sweeping reforms that improved the country’s economic health.

What would be the implications for Europe of a grand coalition?

CDU-SPD disagreements would make it harder for Merkel to enforce her austerity-first approach to the debt crisis. Greece may need a third bailout as early as next year, and the SPD has said there’s no way to avoid introducing some form of joint European debt liability, such as pooling different countries’ sovereign debt into a redemption fund. Merkel, though, has rejected any such pooling.

What other risks await Merkel in a third term?

Electricity prices, for one thing. After the Fukushima nuclear disaster in 2011, Merkel announced sweeping changes in German energy policy, including a phaseout of all nuclear power and subsidies for wind and solar power. That has already jacked up electric rates, and they could rise even further as the power grid is modernized.

History also suggests that the next few years could be risky for Merkel. Neither Margaret Thatcher nor Tony Blair made it through their third terms. And the cautious, pragmatic Merkel—unlike her Christian Democrat predecessor Helmut Kohl—hasn’t articulated a broad vision for the future of Germany and Europe. “Questions will arise about who becomes her heir apparent and what her CDU stands for as a party,” says Ulrich Sarcinelli, a political scientist at the University of Koblenz-Landau.

Matlack is a Paris correspondent for Bloomberg Businessweek.

The Good Business Issue
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus