Coalition Partners

Difficult Kingmakers

main 119143361 source Tobias Hase Michael Kappeler DPA – Christian Lindner FDP leader Dingolfing Bayern March 2017 Angela Merkel Chancellor August 2017
The leader of the Free Democrats, Christian Lindner, is no kingmaker yet, but he has been practicing. Source: Tobias Hase / Michael Kappeler / DPA

Horst Seehofer summed up the feeling of many: “I fear that, with a continuation of the Grand Coalition, many problems would rather be made worse than be solved,” the head of the Christian Social Union, a sister party to Angela Merkel’s Christian Democrats, told Handelsblatt in an interview.

What he meant is that he’d rather avoid Ms. Merkel’s Christian Democrats forming an alliance with the Social Democrats, currently led by Martin Schulz. The CDU and SPD, Germany’s two largest parties, have been in a coalition for the last four years. Both of them would much rather govern on their own after the September 24 election.

That could be difficult. Opinion polls show Ms. Merkel’s CDU clearly in the lead, but neither party will win a majority of seats in Germany’s parliament, the Bundestag. If Ms. Merkel wants to avoid another grand coalition, current polling suggests she’ll have to reach a deal with two of the smaller parties – the pro-business Free Democrats and the environmentally-friendly Greens – as well as Mr. Seehofer’s CSU. If party conventions held this weekend are anything to go by, that could be a very tall order indeed.

The Free Democrats have often been kingmakers in Germany's post-war history by forming alliances with either the Christian Democrats or the Social Democrats.

Coalition talks in Germany are the ultimate horse trade. Each party brings a list of demands to the table. True, Ms. Merkel’s CDU is likely to be the largest force in parliament, but each of the smaller parties will feel empowered by the fact that she can’t govern without them. Each will have a series of conditions – red lines, if you will – for entering into an alliance.

Start with Mr. Seehofer’s CSU. While his Bavarian party may be in an alliance with Ms. Merkel’s CDU, this has never stopped the party from making demands of government. In an interview, Mr. Seehofer issued one particular red line: a cap on refugees entering Germany. “I will not depart from this demand in the coalition negotiations,” he said. With state elections in Bavaria set for 2018, he argued it would be “political suicide” for the CSU not to stick to its guns on this issue.

That puts Mr. Seehofer on a collision course with Ms. Merkel, who famously declared Germany open to refugees during a crisis back in 2015-2016 and has since refused to impose a cap on the number coming into the country. But it also puts him on a collision course with Ms. Merkel’s other potential coalition partners – particularly the Greens.

That’s probably why Mr. Seehofer said he “very clearly” favors a coalition with the pro-business Free Democrats, currently led by Christian Lindner. The party, which in 2013 for the first time in its post-war history failed to meet the 5-percent threshold for entering the Bundestag, looks set to make a trumphant return next Sunday. It’s currently polling around 8-9 percent. Mr. Seehofer, like others, credited Mr. Lindner with “renewing” the FDP over the last four years, moving it away from a reputation of being a party of the wealthy and giving it a social conscience, too.

The FDP, long kingmakers in Germany’s post-war history by forming alliances with both the CDU and the SPD, will have their own demands to enter any coalition. Mr. Lindner has placed a premium on upgrading Germany’s economy for the digital age. Ms. Merkel agrees in principle, warning the country could wind up in “a technical museum” unless it acts, but Mr. Lindner is likely to push her to get specific. For example, he wants to privatize Deutsche Telekom and Deutsche Post to finance an expansion of broadband internet access across the country. “We have lost time when it comes to digitalization over the last four years. That’s why we can’t come up empty again and waste the next four years,” he told Handelsblatt.

18 Angela Merkel’s Party in the Lead-01 election poll survey

More controversial is the FDP’s hard-line stance on Europe. The party rejects bailouts, demands that countries stick to deficit spending rules, and says it will block efforts to create a euro-zone budget. Some of those positions could be a potential deal-breaker not only for Ms. Merkel herself but for her third potential coalition partner, the Greens, who are much more unabashedly pro-Europe.

The Greens, led by Cem Özdemir and Katrin-Göring Eckardt, have been working hard to shed their more radical image and make themselves palatable to government. They have long backed Ms. Merkel’s stance on refugees. And while the CDU and Greens have never worked together nationally, they have formed state coalitions and said they are open to holding national talks after September’s elections. A first such effort was made back in 2013. Though the talks eventually failed, both sides said they were surprised by the amount of issues they had in common.

But there are some major sticking points. In the aftermath of the Dieselgate scandal, the Greens have called for combustion engines to be phased out. Ms. Merkel, though she favors more electric cars on the road, fears a full phase-out will be too much for a car industry that, despite its scandals, still forms the backbone of Germany’s economy. Mr. Lindner’s FDP goes further – it wants to get rid of incentives for electric cars, arguing it should be up to consumers and the industry to decide which technology wins out.

Could the Free Democrats and Greens really work together in one government? At the moment, it doesn’t seem likely. At dueling conventions in Berlin this weekend, the two parties railed against each other. The Greens derided the FDP as “Putin friendly” and “stubborn neo-liberals.” Eight kilometers away, the FDP’s deputy leader Wolfgang Kubicki suggested his green opponents “might want to have a spliff in the mornings” to calm down.

Mr. Seehofer, in our interview, also said a coalition with the Greens in particular would be “difficult”. Yet neither side has ruled out discussions after the elections to see if they can iron out their differences.

Should all of these talks fail, the Social Democrats could be waiting in the wings. The center-left party currently sits at just 23 percent in opinion polls, compared to around 36 percent for Ms. Merkel’s Christian Democrats. There are deep divisions within the party about the way forward: Foreign Minister Sigmar Gabriel has ruled out another grand coalition – to the anger of party leader Mr. Schulz who said he is open to all options.

Even so, Mr. Schulz knows it will be harder than ever to convince his party’s base of the merits of making another grand bargain. But then, it wouldn’t be the first time the draw of power led a political party to bend or break some of its party promises.

 

Sven Afhüppe, Dana Heide, Martin Greive, Thomas Sigmund and Barbara Gillmann of Handelsblatt contributed to this story. Christopher Cermak adapted this story for Handelsblatt Global. To contact the authors: cermak@handelsblatt.com

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