Today I want to touch on some (hopefully) good news, this time out of Germany. After 5 months of political uncertainty, Angela Merkel’s Christian Democratic Union (CDU), their sister party the Bavarian Christian Union (CSU), and their nominal rivals the Social Democrats (SPD), agreed to form a provisional coalition government to run the country. This would allow Mrs. Merkel to remain as Chancellor for her fourth term in the role, but would cede many important government ministries to the center-left SPD as well as the Bavarians. The SPD’s 460,000 members will now have to ratify the deal in a mail-in vote to ensure the coalition. This deal is important for many reasons, but primarily it reduces significant uncertainty in Europe’s largest and most dynamic economy, most definitely a good thing.
The coalition talks took quite a long time, as the elections which brought about this conundrum were quite different than those which had taken place in the past. In the September 2017 elections, Chancellor Merkel’s CDU/CSU bloc lost 65 seats in the Bundestag (German parliament), their coalition partners the SPD lost 40 seats, while the far right-wing Alternative for Deutschland (AfD) party gained 94 seats and became the first far right-wing party to join the Bundestag since WWII. Initially, the SPD committed to not joining the CDU/CSU in another ‘Grand Coalition’ of the largest center-right and center-left parties, which meant that Mrs. Merkel would have to find another way to create a government (a government can only be created with more than 50% of seats in the Bundestag). Her parties worked to find another option besides the SPD, but their talks with two smaller parties, the pro-business FDP and the Greens, fell through. This left the ‘Grand Coalition’ as the only option if a government were to be formed. If the SPD declined, there would have to be snap elections called, which would precipitate a potential crisis in the country as well as the EU more broadly. Given the electoral success of the AfD during the last election, the SPD did not wish to take the chance that they would gain more prominence, and thus agreed to join the CDU/CSU coalition.
This return of the ‘Grand Coalition’ in Germany means that the AfD will now become the main opposition party, having the largest number of seats outside of the ruling coalition. The SPD were hoping to have the opposition to themselves, but they wisely chose to join the government to avoid triggering new elections. There are absolutely negative consequences of the AfD being the main opposition party, as they are the first to rebut the government in the Bundestag, and are able to have a prime position to introduce bills and other important arguments. However, these poor outcomes are subsumed by the fact that the German government has now been formed and can help stabilize the country and the Eurozone as a whole. The deal will give the SPD the reins of the Finance Ministry (incredibly important, as Germany is the most powerful EU country in finance), the Foreign Ministry, and the Labor Ministry, as well as a host of other policy promises. These compromises undercut Chancellor Merkel’s personal power, but ensure her legacy as a longtime German leader and allow her to continue running the EU’s economic powerhouse.
Why is this important for the US and Americans generally? Germany is Europe’s largest economy and has immense power in European Union institutions. It has historically, along with France, been a strong advocate in favor of the EU, and this coalition government ensures that advocacy will move forward intact. In fact, the SPD taking over the reins of the Finance and Foreign ministries may dovetail well with French President Emmanuel Macron’s proposed EU reforms, which the SPD has been interested in implementing. Americans should be all for a stable, working European Union, as that body remaining together and functional is critical both for US national security as well as for the health of the global economy. Further uncertainty in Germany, whether it was due to snap elections or a failed coalition-creation effort, would have deleterious effects on the European economy, as well as on our own. We have also been longtime partners of the Germans, and should strive for our allies to remain democratic and free. The far-right AfD party seems to want to return to an era in Europe where the nations were less united, more nationalist, and less welcoming to others. I need not remind you that in 2018, the centennial of the end of hostilities of World War I, we do not need a Europe that is more prone to conflict. All in all, the success of the German ‘Grand Coalition’ is the success of all of us, so we would do well to wish for the best over in Deutschland.