Coalition Headache

Merkel on thin ice as ‘Jamaica’ eludes Germany

Fortsetzung der Sondierungsgespräche
Boys, should we order pizza? Can we at least agree on that? Source: DPA/Bernd von Jutrczenka

The good news is that Germany does have a caretaker government. It’s just not the one that Germans voted for nearly two months ago, because the four parties that are trying to form a new governing coalition just can’t seem to get on the same page. Today, after nearly a month of exploratory talks, the conservative CDU of Chancellor Angela Merkel, its Bavarian sister party CSU, the Green Party and the pro-business Free Democrats had to part ways without a deal after passing a deadline they had set themselves for November 16.

A 15-hour session was not enough to hash out a deal Thursday night. “Good morning, we’ll keep going today,” a weary-looking chancellor laconically told journalists in the wee hours of the day before her car whisked her away. The four parties are still at odds on fundamental issues ranging from climate policy to immigration.

But they agreed to a last-ditch attempt to salvage the talks. If necessary, the tense discussion might continue “throughout the weekend,” said CSU heavyweight Alexander Dobrindt, a senior figure in the outgoing cabinet.

“It’s certainly going to be tough.”

Angela Merkel, German chancellor

A collapse of the negotiation would have far-reaching consequences. The most likely outcome would be snap elections to try and break the stalemate. The problem is that polls suggest the outcome of a new election would be fairly similar to that of the vote on September 24, merely prolonging the impasse.

At stake is the political survival of Angela Merkel, who won a fourth term in September and just last week was named the world’s most powerful woman by Forbes for the seventh year running.

Many politicians — including the four parties involved in the talks — fear that a new election would spell disaster for the country, as the Alternative for Germany, or AfD, which this year became the first far-right party to enter the Bundestag in over 50 years, would have a chance to increase its 13-percent share of the vote. And with the Brexit clock ticking, the refugee crisis smoldering, the euro crisis bubbling under and populism rising throughout the continent, the last thing Europe needs now is a Germany abdicating from leadership because of domestic politics.

Shortly before talks resumed on Friday, Ms. Merkel told journalists amassed in front of the CDU headquarters in Berlin, “It’s certainly going to be tough, but it’s worth entering round two of the talks” in order to give Germany a government.

Schulz says no to another coalition with Merkel
SPD leader Martin Schulz said on Friday the Social Democrats aren’t gonna come to Angela Merkel’s rescue this time. And he didn’t look sorry. Source: DPA/Kay Nietfeld.

Immigration, one of the most controversial issues in Germany since the influx of refugees in 2015, is one of the stumbling blocks, as the parties’ stances are diametrically opposed. “We have tried to build bridges but so far we have unfortunately failed,” said Wolfgang Kubicki, the leader of the pro-business FDP who could become Germany’s next finance minister if the coalition talks succeed. His party categorically opposes family reunification for refugees whose asylum status is pending. And Ms. Merkel’s CDU and the Bavarian CSU are in favor of capping the number of asylum seekers entering the country every year. But The Green party staunchly opposes these two proposals.

And while world leaders gathered this week at the UN climate-change conference in Bonn to commit to phasing out coal in the next decade, the German negotiators went into the opposite direction. The environmentalist Greens reneged on several of their key proposals on climate policy to accommodate their conservative interlocutors. They gave up on their proposal for Germany to shutter its 20 most polluting coal-fired power plants and compromised on their proposed ban on new fossil-fuel-powered cars after 2030. These painful U-turns make them less likely to bend over backwards on other topics.

Meanwhile, with so much focus given to domestic issues, Europe is not high on the negotiators’ lists. All four parties, like most Germans, are broadly in favor of further European integration. But the devil is in the detail, with the FDP taking a hawkish stance on euro-zone reforms. The Free Democrats oppose deeper fiscal integration of the sort proposed by French President Emmanuel Macron, including a common budget for the 19-country bloc, fearing that such steps would transform the euro zone into a “transfer union.” FDP head Christian Lindner has called a euro-zone budget a “red line.”

Many commentators across the EU have noticed the lack of European vision transpiring from the talks. After German media published the 62-page negotiation blueprint on Thursday, Yannis Koutsomitis, a Greek European affairs analyst, posted two pages relating to euro-zone policy on his Twitter account and said they were evidence of renewed “German nationalism.”

But there is hope. Mr. Lindner hinted at compromise on the euro-zone bailout fund last week, saying that with just 11 percent of September’s vote, the FDP “cannot dictate the way for Germany and the whole of Europe.” He added that the bailout fund, dubbed European Stability Mechanism, could be “an instrument for more discipline” if it remains.

Despite these seemingly daunting differences, party heads showed themselves cautiously optimistic. “Let’s give each other a few more days to reach a robust and reasonable deal,” Mr. Kubicki told news magazine Der Spiegel. Other leaders said it would make little sense to let the talks collapse while an agreement was possibly just a few hours away.

But many Germans are growing sceptical that a “Jamaica” coalition can last a whole four-year term. Former Chancellor Gerhard Schröder, a Social Democrat, thinks that the Bavarian CSU, by giving in now in the coalition talks, could do badly in the Bavarian state election next year. Its likeliest response would be to turn hard-right, even at the cost of blowing up the coalition in the federal government. Ms. Merkel’s government would lose its majority. “Then in 2019 we’ll have very interesting new elections.”

Jean-Michel Hauteville is an editor with Handelsblatt Global in Berlin. To reach the author: hauteville@handelsblatt.com.

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