January 19, 2018
In Germany, Social Democrats Hold Merkel's Future in their Hands
By Jörn Fleck
For a brief moment on January 21, all eyes in German politics will shift from Berlin to Bonn. In the predicted cliffhanger vote at a special party conference in Germany’s former capital, the Social Democrats (SPD) will decide whether to begin coalition negotiations with Merkel’s Christian Democrat bloc (CDU/CSU). If delegates approve a preliminary deal reached on January 12, detailed coalition talks could start in earnest, wrap up in a few weeks, and allow the next German government to take office by Easter.
However, a groundswell of opposition to the deal from the SPD’s left wing in recent days has called into serious question whether the Social Democratic leadership under chairman Martin Schulz can win approval for yet another uneasy marriage with Merkel. If successful, this would be the third grand coalition since 2005. However, a rejection of the deal would likely mean new elections for Europe’s largest economy, more time lost for much-needed Eurozone reforms, and, some say, the end of Merkel’s political career.
As SPD leaders race to win over the party’s rank-and-file in the days ahead of January 21, here are some key points to help make sense of the vote and its implications:
What’s in the preliminary coalition deal?
The twenty-eight-page agreement reached in exploratory talks offers wins for both potential coalition partners. CDU/ CSU conservatives would get strict limits on family reunions for current asylum seekers, a cap of 180,000-220,000 immigrants per year, and a small tax break. Merkel also blocked Social Democrat demands to raise the top tax rate for the wealthy and prevented the SPD’s universal health care model. In turn, the SPD would secure increased spending on education and infrastructure, pension level guarantees through 2025, concessions on rent control, and a raise in employer contributions to healthcare.
The SPD’s greatest influence on the agreement relates to European policy. The agreement references key Eurozone reform proposals long rejected by fiscal hawks on the political right in Berlin – a European monetary fund, increased public investment, greater German contributions to the European Union (EU) budget, and the notion of a multi-speed Europe. However, the broad statements on Europe are an important signal to French President Emmanuel Macron and his reform ambitions, the wording in the document suggests more an “openness to talk” to Paris rather than a firm commitment to a fundamental shift in Germany’s EU policy.
Overall, the deal would amount to an estimated 45 billion euro in additional spending and seven billion euro in tax cuts over four years. What critics have called a deal full of “freebies for all” the prospective coalition partners argue is a blueprint to ensure Germany does well for the next fifteen years.
Why the vehement opposition on the SPD’s left?
Vocal opponents on the SPD’s left wing, and its youth organization in particular, argue that the deal falls short on key social and economic policy demands needed to sharpen the party’s profile with traditional center-left voters after it suffered the worst election result in post-war German history in September 2017. Many fear that another four years in government with Merkel could mean further erosion and the possible death through insignificance for Germany’s oldest political party. Most blame Merkel for monopolizing long-standing SPD positions and making the party seemingly irrelevant to voters. The hope after the 2017 ballot was one for SPD renewal in opposition. More fundamentally, however, the left’s challenge to another grand coalition continues the unresolved internal struggle over the direction of the SPD that has simmered since the welfare and labor market reforms of SPD chancellor Gerhard Schröder in the mid-2000s tore the party apart.
What is the state of play ahead of Sunday’s vote?
Six hundred SPD delegates from sixteen state chapters and forty-five members of the party leadership will vote on the preliminary deal and whether to launch formal coalition negotiations. Of the sixteen, three state delegations oppose coalition talks; three have declared their support. However, these decisions are non-binding for voting delegates. Much will depend on the largest delegations from Northrhine-Westphalia, whose 144 delegates are deeply divided, as well as Bavaria (seventy-eight delegates) and Baden Wuerttemberg (forty-seven). None of these delegations have declared for or against a coalition with Merkel. Polling after the January 12 deal suggests that a majority of rank-and-file SPD supporters approve of starting coalition talks. Polling also indicates that 59 percent of rank-and-file SPD supporters believe the party is acting for the sake of the country after other coalition scenarios failed, and 69 percent are convinced Sunday’s vote will result in coalition talks.
What if the SPD votes for coalition talks?
If a simple majority votes for the preliminary deal, formal coalition talks are slated to start immediately. Merkel has expressed hopes that the talks could be concluded within two weeks and latest by mid-February. Any detailed coalition deal emerging from these negotiations will then have to be put to a vote of the full SPD membership. If the party base approves, a new grand coalition under Merkel could take up its work by Easter time – six months after the elections.
What if the SPD votes no?
A rejection of the coalition talks on Sunday would create unprecedented uncertainty in German politics. Another attempt at so-called Jamaica coalition talks between Merkel’s conservatives, the Greens, and the Free Democrats seems highly unlikely after a first try failed in November 2017. Instead, German President Frank-Walter Steinmeier more likely would nominate Merkel for a vote in the Bundestag. If she fails to win an absolute majority in the first two rounds of voting but wins a simple majority in the third, Steinmeier could declare her chancellor of a minority government or call for new elections. Germany has no experience with minority governments and it seems doubtful whether Merkel would accept such a role. However, the latest polling suggests that rerun elections would produce a very similar outcome to that of September 2017: unclear parliamentary majorities and a strong showing for the right-wing, anti-immigrant Alternative for Germany party. Weeks of political uncertainty after the January 21 vote could of course inject new dynamics into the campaign.
What would a “no” mean for Merkel’s future?
Speculation abounds that a rejection of the deal on Sunday would mean the end of Merkel’s political career as her lack of leadership in both exploratory talks has come under fire. For the moment, her future seems at the mercy of an SPD special party conference. Undoubtedly, the debate about her future as Germany’s political leader would intensify if Sunday’s vote produced a no, leaving few options other than new elections.
But despite much media hype, Merkel’s resignation if coalition talks are rejected by the SPD are seems highly unlikely if only for one reason: a distinct lack of credible alternatives. Few of her potential successors seem willing to lead a push to oust her, the party base continues to support her, and even many of her critics acknowledge that no one else in the CDU could lead the party in rerun elections and secure a similar result.
What would a “no” mean for Schulz and the SPD?
Early on election night in 2017, after clear indications that the SPD had suffered its worst election result in post-war history, it was Schulz who declared his party would go into parliamentary opposition. The promise of renewal in opposition to Merkel avoided difficult questions about his personal responsibility for the election debacle as chancellor candidate. However, his U-turn back to a partnership with Merkel after exploratory talks for a Jamaica coalition failed last year make him less credible now. Schulz reportedly said it would be the end of his career if he cannot deliver on the coalition talks. Circumstances suggest he is right.
In the condensed debate over coalition talks, the party leadership has made clear that the SPD is unlikely to get a better deal to influence policy for at least the next four years. In new elections, the SPD may also be blamed for the political uncertainty that would follow a “no” vote, and suffer further losses. There are also more fundamental questions critics on the left will have to answer: Four years in opposition between 2009-2013 did little to renew the party or improve its electoral trajectory. Why would this time be different? When Angela Merkel is widely expected not to run again in 2021, when she might give up the chancellorship before the end of her full term to install a successor and the CDU faces a post-Merkel leadership crisis, wouldn’t the best place for the SPD to renew itself be in government?
Jörn Fleck is associate director of the Atlantic Council’s Future Europe Initiative.