• The new German Government
  • Merkel, Round Four! First Reflections

  • By Cornelia Hildebrandt | 21 Mar 18 | Posted under: Germany
  • This appears to be the continuation of the outgoing Grand Coalition, and yet things are not quite the same. Never before has it taken a year to form a German Federal Government. What had happened?

    In view of the disastrous results of the German Social Democratic Party (SPD) in the Federal Elections in September 2017, achieving its worst result since 1945 at 20.5% of the vote, the SPD ruled out continuing the Grand Coalition as early as on election night. Initially, the party base largely welcomed this as an act of ‘liberation’. After all, the party faced the risk of imploding in the same way other European social democratic parties had.

    Considering their own weakness as well as that of their potential partners within a coalition, to the Conservatives, who themselves lost 8.6% of their voters and 65 of their seats, this meant forming a coalition with two other parties: the FDP and the Greens. Initially, negotiations on what is known as a Jamaica Coalition were held in Germany, which did however fail after four weeks of debates.

    The new Grand Coalition

    Walter Steinmeier (SPD), the Federal President, appealed to the parties of the only coalition still possible to enter into negotiations on forming such a coalition. For this reason and following party leadership approval, the SPD took up exploratory discussions. The results of these discussions were presented at an extraordinary party congress as the foundation to decide on whether coalition talks should follow. A mere 56% of delegates at the SPD party congress voted in favour of the motion to launch coalition negotiations. The delegates did however demand significant improvements of the results of the exploratory discussions.

    Coalition negotiations followed as well as a decisive SPD members’ referendum on the question: “Should the Social Democratic Party of Germany (SPD) enter into the coalition agreement brokered with the Christian Democratic Union (CDU) and the Christian Social Union (CSU) in February 2018?” 78.4% of the 463,722 members of the SPD participated in the vote. 66.02% (362,933 voters) voted in favour; more than 123,000 voted against, i.e. 33.98% a good third.

    Relatively high approval of the coalition agreement, which had not been expected as such, can also be traced to the imminent new momentums of political instability in Germany and the persistent weakness of the Social Democrats. In the polls, approval of the SPD had dropped to below 18%, only slightly ahead of the AfD. As Angela Merkel categorically refused forming a minority government, fresh elections remained as the only option, which would solely have reproduced the same result, potentially with a further weakened SPD and a strengthened AfD. Most SPD members did not want to take such a risk, also since the coalition agreement clearly bore the hallmarks of the SPD.

    The current Grand Coalition combined only received a narrow majority of 53.4% of all votes (2013: 67.2%). The decision to form a Grand Coalition provided for the fact that for the first time in Germany, a right-wing populist party becomes leader of the opposition in the German Bundestag.

    Merkel, round four

    On 14th March 2018, the members of the German Parliament elected the Federal Chancellor. Angela Merkel was voted into office with 364 votes. That is 9 votes more than she would have needed and 35 votes fewer than the number of CDU, CSU and SPD members in Parliament. Some MPs in both parties – that is also the CDU/CSU – do not back the Coalition. With this in mind, it was correct to ground a reappraisal of the work of the government after two years within the coalition agreement. It is but an ‘emergency association’ playing for the time both parties need to redefine their future course.

    Having a closer look at who is involved in the new government is insightful not only with regards to the distribution of portfolios. Olaf Scholz (SPD), who succeeds Wolfgang Schäuble as Finance Minister, advocates a ‘black zero’ balanced budget, as did his predecessor. Heiko Maas (SPD), a native of the Saarland region bordering France, replaces Sigmar Gabriel (SPD) as Minister of Foreign Affairs. Horst Seehofer (CSU) is in charge of the new Ministry of the Interior and Homeland, with Ursula von der Leyen (CDU) remaining in her position as Minister of Defence. Minister of Economic Affairs Peter Altmaier (CDU), Heiko Maas and the new General Secretary of the CDU, Annegret Kramp-Karrenbauer, are from the Saarland region and will through their work safeguard the Franco-German Axis anchored in the coalition agreement.

    What should we expect of the new government?

    Social Policy

    The great awareness of problems evident from the coalition agreement is as remarkable as its insistence on sticking to the same, existing measures which have been employed so far. The coalition agreement identifies the widening social divide in Germany and Europe, but fails to offer actual solutions. Germany will see no single-payer healthcare, no taxing the rich and no wealth tax, no increasing of the top tax bracket – that is any measure to redistribute top-down. The SPD’s ‘double lock’ to consolidate statutory pensions, with pension levels at 48% of the average salary and pension contributions at 22%, is merely set until 2025. This means that the actual problem of securing pension levels for the baby boomer generation remains unsolved. Raised child benefit (‘Kindergeld’) by €25, too, and increased supplementary child benefits (‘Kinderzuschlag’) for low-income families and single parents are not sufficient to combat growing social polarisation as well as income and old-age poverty.

    With regards to fair taxation, the coalition agreement merely addresses restoring parity in financing health insurance, reducing unemployment insurance contributions by 0.3% and reducing the tax burden for low-paid workers. Intensification of neoliberal policies through tax cuts, austerity and redistribution at the expense of wage earners and citizens could not be enforced because of the SPD, but by the same token top-down redistribution could not be pushed for. The sole achievement is the preservation of the status quo.

    European and Foreign Policy

    The coalition agreement includes a clear commitment to Europe and clearly renounces protectionism, isolationism and nationalism. Cooperation is to be fostered based on democratic values and the rule of law; the principle of mutual solidarity is to be strengthened. A social pact including a framework for minimum rules and national minimum rules is to be developed. Equal pay for the same work in the same location is one aspect thereof. The European Fund for Strategic Investment (EFSI) is to be continued and expanded upon; key EU structural funds are to be maintained. The coalition agreement envisages a common basis of assessment and minimum rates with regards to business taxes as well as a financial transaction tax.

    After Brexit, Germany will pay higher contributions to help offset the financing gap resulting from the departure of the UK. Together with France, with whom a new Élysée Treaty is to be signed, EU reforms are to be continued and cooperation across the Eurozone is to be deepened primarily through fiscal monitoring, and economic coordination within the EU and the Eurozone. The Stability and Growth Pact remains in place. This means that the austerity policies implemented to date will also continue. It remains to be seen if the scheduled conversion of the European Stability Mechanism into a European monetary fund subject to parliamentary scrutiny will allow for greater flexibility or modification of the Stability and Growth Pact.

    Peace and Security Policy

    The coalition agreement contains declarations on peace and security policy in the chapters on Europe and on ‘Disarmament and Restrictive Armaments Policy’. The chapter on Europe outlines the principle of the political taking primacy over the military while at the same time agreeing to stronger European cooperation on matters pertaining to Security and Defence Policy (PESCO), which is to be vitalised. The chapter on ‘Disarmament and Restrictive Armaments Policy’ elaborates on Germany’s having to launch new initiatives on arms control and disarmament and wanting to commit to global, verifiable disarmament of all WMDs. The coalition agreement specifies a world free of nuclear weapons as the primary aim.

    At the same time, the Grand Coalition affirms its commitment to all alliances – including NATO. Planning processes of European foreign and defence policy should be co-ordinated more effectively and harmonised with NATO. PESCO projects should be expedited and the European defence funds should be applied to this end. EU headquarters to lead civilian and military missions should be created, also to be able to better co-ordinate civilian and military instruments.

    Germany also supports the concept of a “European Council on Global Responsibilities” – a proposal introduced by France and Poland. Within Germany itself, the capacities for strategic analysis and strategic communication are to be boosted.

    The chapter on the Federal budget encompasses these considerations within prioritised expenses in the next budget, which sees a €2bn increase in the defence and development policy budget (ODA quota).

    A preliminary conclusion

    With all this in mind, the coalition agreement and first statements by the Chancellor (government declarations are yet to be published) do not delineate any fundamental break with the neoliberal model of development, but modifications to the current course at best. One could hardly have expected more in view of the weakness of the SPD, made obvious yet again by the elections, as well as the party’s obvious programme-strategy and leadership weakness. Currently, German social democrats do not represent a project of their own; they lack the confidence to spearhead a shift towards greater justice, a true new dawn, in contrast to Sanders in the US, Corbyn in the UK or the swing to the left among Portuguese socialists. Rather, it is a continuation of “same old”.

    What does this imply for The LEFT?

    For The Left, this implies that it has to continue developing its dual strategy. That means it has to specifically address the continuation potentially of modified but not fundamentally questioned neoliberal policies of social regression and the dismantling of democracy, of multi-speed Europe policies and an increasing militarisation of the political sphere.

    The Left has to apply pressure from the left at intersections. Considering the SPD’s indecisiveness, this applies to matters of redistribution, upgrading of social services up to social housing, increasing civil service staff, the struggle for commitment and contents as defined in the EU Commission’s European Pillar of Social Rights, the support and clarification of demands within social and employment protection in the EU. In particular, this includes the struggle against nuclear armament across Europe and pressure from the left towards the development of a peace policy dialogue tackling matters of disarmament, arms control and arms limitation. At the same time, to create a peaceful Europe questions arise regarding alternatives to existing economic and trade policies – including those of Germany –, pertaining to labour market and tax policies and distribution grounded in solidarity as well as the strengthening of democratic institutions such as the Parliaments including the European Parliament.

    The radical Left must work on these issues independently at all levels and to this end help create a pole of solidarity relevant to society, which forces ruling and in this instance social democratic politics, too, towards a political change. This remains the central challenge The Left faces, not least in view of the party’s responsibility towards Europe.


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