Botched deal

Merkel's coalition giveaways will be her downfall

Coalition talks of CDU/CSU and SPD in Berlin
Who's idea was this again? Angela Merkel with Horst Seehofer (l) and Martin Schulz (r). Source: Reuters

Angela Merkel has done it again. The leader of the center-right Christian Democratic Union (CDU) is now on the cusp of sealing her fourth coalition government. Only the grassroots members of her junior partner, the Social Democrats (SPD), can stop her election as chancellor if they vote down the deal next month.

The agreement is undoubtedly her masterpiece when it comes to power politics, even if it was botched in many ways in terms of policy. It is possible that her election will place Ms. Merkel in the same league as former CDU chancellors Konrad Adenauer and Helmut Kohl. One was in office for 14 years and the other for 16. Ms. Merkel is in her 13th year. However, her own party, the economy and severely disappointed citizens are paying the price of Ms. Merkel remaining in power – a price that many in the CDU think is too high.

So who has benefitted from the agreement? The Christian Social Union (CSU), the CDU’s Bavarian sister party and the third coalition member, is coming off very well, especially its leader Horst Seehofer. After securing its red lines of upper limits on refugee numbers and pensions for new mothers, Mr. Seehofer has pleased the party base, as has his rumored appointment as federal interior minister. The CSU also retains the Ministry of Transport and Digital Infrastructure, which has been a money machine for the party for the past eight years. Nowhere else is broadband expansion more successful than in Bavaria, and in no other federal state are there so many new and newly renovated autobahns and major roads.

The glue holding the coalition together is the will of three election “losers” – Ms. Merkel, Mr. Schulz and Mr. Seehofer – to remain in power.

The coalition agreement isn’t quite as positive for the center-left SPD. Compared to the 2013-2017 government, in which the same three parties formed the same “grand coalition,” the SPD did not really speak up on big-ticket issues in its negotiations with the CDU/CSU, as it did previously over retirement at 63 and a minimum wage. Instead, the SPD asserted itself on many small issues, which will be costly for the economy and service providers.

Above all, the party has not yet been able to rid itself of one particular personnel problem: Martin Schulz. He now wants to give up his post as leader in order to serve as foreign minister. This from a man who vowed never to go into coalition with Ms. Merkel and then never to serve under her?! The man is willing to break his promises in return for titles and company cars. The leadership transfer will no doubt be a cloak-and-dagger operation – not exactly the best way for the SPD to rejuvenate itself.

Things are looking gloomy for Ms. Merkel’s CDU. The party is no longer the driving force that it once was. Apart from balancing the budget, it achieved nothing tangible in the previous grand coalition. Instead, the chancellor has been left to explain to her economic wing and the union of small and medium-sized enterprises why bureaucratic hurdles have grown, not reduced.

In addition, CDU promises have gone by the wayside. Service providers will see nothing of the €15 billion ($18.4 billion) in annual tax relief promised during the election campaign, and the economy will be burdened with an annual cost of €5 billion for the joint financing of health insurance funds. And many economists fear entry into an EU transfer union that could see more German money head south.

Suddenly Ms. Merkel’s masterpiece seems to be all messed up. Despite investments in education and infrastructure, there is no sign of a new beginning for Germany or Europe, as stated in the preamble of the coalition agreement. Ms. Merkel’s CDU continues to indulge in an illusion of prosperity, while the world around us is changing rapidly.

The glue holding the coalition together is the will of three election “losers” – Ms. Merkel, Mr. Schulz and Mr. Seehofer – to remain in power. This is also reflected in the distribution of positions. Ms. Merkel, in particular, was prepared to make any and all concessions. To secure her re-appoint as chancellor, she has even been handed over the Ministry of Finance (to the SPD) as well as the Ministry of the Interior to the smaller parties. The SPD, with its 20.5-percent showing in the election, will also take labor and social affairs, giving it three key cabinet posts. The last time this was the case was in 2005, when the SPD – again the junior partner – was in a much stronger position after having garnered 34.2 percent in the election.

This more-of-the-same approach will be lubricated with the hard-earned money of taxpayers, which is being widely distributed around the country and among the party’s own clientele. In this sense, the CDU under Ms. Merkel has finally moved away from 1960s chancellor Ludwig Erhard: The party no longer relies on the market and competition.

It is also high time that we declared the end of conservatism in the CDU. Conservative positions such as compulsory military service and traditional marriage have long since been abolished, anyway. However, Ms. Merkel’s refugee policy, which is now accompanied by a policy of integration that threatens to fail, was the last straw.

Paradoxically, Ms. Merkel’s signature at the bottom of the coalition agreement presages the end of the Merkel era. When it comes to content, no one really knows how the post-Merkel vacuum will be filled. But then there’s not much content left anymore, either.

To contact the author: sigmund@handelsblatt.com

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