Political relief

Social Democrats give Angela Merkel a fourth term

Lower house of parliament Bundestag session in Berlin
Now let's get to work. Source: Reuters

More than five months after going to the polls, Germans now have a new government. Members of the Social Democrat Party have agreed to renew their coalition government with Angela Merkel’s conservatives, and keep the leader of Europe’s largest economy in power for a fourth, consecutive term.

The center-left SPD had been divided over continuing its current coalition with Ms. Merkel’s Christian Democratic Union and her Bavarian sister party, the Christian Social Union. Delegates agreed last month to pursue a new coalition government but only if a majority of its more than 460,000 members endorsed the move. And they did: 66 percent voted in favor, the party’s leadership announced early Sunday morning.

“We now have clarity,”  acting chairman, Olaf Scholz, told journalists at the party’s headquarters in Berlin. “The SPD will join the next federal government.”

Ms. Merkel, chancellor since November 2005, will now be able to lead her fourth government. The lower house of parliament, the Bundestag, is expected to officially vote her into office on March 14, almost six months after federal elections took place.

The Social Democrats’ support comes as a relief to Europe, which on Sunday also faces an uncertain outcome of national elections in Italy. The European Union had been waiting for a new government to move forward on a string of issues, such as Brexit, the formation of a European banking union and a unified response to Donald Trump’s protectionist policies. As the continent’s biggest EU funder, Germany is effectively Europe’s leading nation, together with France.

Mr. Scholz is expected to play in a leading role in the EU. He is tipped to become Germany’s new finance minister, succeeding Wolfgang Schäuble. The latter had already resigned late last year to become chair of the Bundestag. Ms. Merkel’s chief of staff, Peter Altmaier, has temporarily taken the post and he is expected to become the country’s new economics minister.

Policymakers in Brussels and Washington will be watching closely how Ms. Merkel, 63, fares in her fourth term. Ever since her failed attempt to form a coalition with the Green party and pro-business Free Democrats in November, her authority has weakened and demands of party renewal have become louder. Over the past two weeks, she has nominated  Annegret Kramp-Karrenbauer as her No. 2 to lead the party and one of her biggest party critics, the young conservative Jens Spahn, as health minister, sparking succession talk.

Ms. Merkel knows now that she can govern another term, but the question is in what form and for how long.

Gilbert Kreijger and John Blau are editors with Handelsblatt Global. To contact the authors: blau@handelsblatt.com and kreijger@handelsblatt.com

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