The Merkel victory that wasn’t

More than two months after the German election, the media finally announced last week that Angela Merkel would return as chancellor in a grand coalition government, after reaching an agreement with the Social Democrats (SPD). But even that isn’t final yet, since the SPD membership has to approve the deal in a nationwide plebiscite. That will take another two weeks, and only then will the personnel of the new government be announced, to be sworn in before Christmas.

There’s little doubt that the membership will say yes, since the SPD has got a pretty good deal. It secured its key demands of a national minimum wage, liberalised pension rules and an expansion of dual citizenship. But Merkel’s Christian Democrats (CDU) will have their key constituencies looked after as well: a total of 23 billion euros in new spending is called for. Improbably enough, there is also to be no new debt and no tax rises – the extra money has to come from “savings elsewhere”.

It’s all a bit of a blow to the idea of German fiscal rectitude. As Josef Joffe puts it at Bloomberg.com:

Merkel may continue to preach fiscal and reformist virtue to the laggard southern European “Club Med” Countries. But the appeals will ring hollow coming from a chancellor who is sinning against the very commandments she is handing down to her wayward flock. Instead of making the others more “German,” that is, more competitive and productive, Germany is becoming more like them.

The turn away from austerity is very much in line with current political trends in Europe, although the jury is still out on whether it makes economic sense. But it might seem strange to those who remember the glowing reports two months ago of a triumphant Merkel carrying all before her at the election.

Indeed, the Economist began a recent report on the coalition negotiations by referring to Merkel having “won a parliamentary election overwhelmingly.” How, then, did it happen that she has had to tack so far to the left before being able to govern?

The truth, of course, is that the CDU didn’t really “win” the election at all. The media, particularly in Britain and America (where most of our overseas news comes from), have an entrenched first-past-the-post mentality, so the fact that Merkel’s party was almost 16% ahead of its main rival impressed them. But that was still only 41.5% of the vote and 311 out of 630 seats – not a majority.

The CDU did much better than it had in 2009, but that was more than offset by the collapse in support for its centrist allies, the Free Democrats, who failed to reach the 5% threshold and dropped out of parliament altogether. Without them, Merkel needed to look to the left for a majority, as I explained at the time.

So it’s not surprising that she has had to give ground to the SPD. The three parties of the left – the SPD, the Greens and the Left – have a parliamentary majority between them, albeit a narrow one. The SPD leadership chose not to pursue a left-wing coalition (although it has left open the option of doing so in the future), and whether or not that was the right decision, it’s completely understandable that it would expect serious concessions from the CDU in return for making it.

And to be fair to the Economist and others, the German electoral system did do something rather odd. Here, for reference, are the vote totals for the last three German elections, including parties that fell short of the threshold as well as those that ended up being represented:

2005: Left 51.0%, Centre 9.8%, Right 37.4%

2009: Left 47.6%, Centre 14.6%, Right 35.3%

2013: Left 44.9%, Centre 4.8%, Right 47.5%

So the left-wing majority in parliament this time does not reflect an actual majority of the vote. But in 2005, when a majority really did vote for the left, the country still got a grand coalition headed by the CDU. Funnily enough, the SPD seems to have done the best at furthering its agenda out of the election in which the left recorded its worst result.

For what it’s worth, my view is that the Free Democrats damaged the system in 2005 when they refused to link up with the SPD and Greens, leaving a grand coalition as the only viable option. In the short term that worked well for them, since in 2009 they won their highest vote ever. But the long-term price was dependence on the CDU, and this time around the voters showed their disapproval.

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