Europe-watchers can all thank the upcoming German elections on September 22 for the quietest summer since the outbreak of the eurozone crisis in 2010. While the German election campaign has focused mainly on domestic issues, it has brought policymaking across the region to a screeching halt. Many analysts and investors hope that the new German government will approach the eurozone crisis differently after September. Whatever the composition of the next government, Germany’s approach to the eurozone is unlikely to change significantly.

Who will govern?

It is unclear what coalition will emerge from the most closely watched German election in years. According to the latest opinion polls the CDU/CSU has around 40% support, the SPD around 25%, the Greens around 12.5%, the left-wing Linke around 8%, the FDP around 5.5% and the AfD and Pirates just under 3% each.

With Merkel’s party so far in the lead, it is almost certain that she will serve at the helm of the new German government. If the opinion poll figures are played out on election day, she will probably reprise the coalition government over which she currently presides between the CDU/CSU and the FDP. There is a risk that the anti-euro AfD will siphon off sufficient voters from the FDP to prevent the FDP from passing the 5% threshold to make it into parliament.

If this happens, a grand coalition between the CDU/CSU and the SPD is most likely. The biggest obstacle to this is that the SPD is currently opposed to it. Campaigning for a grand coalition would be a losing strategy for the SPD, but its tune will almost certainly change after the ballot.

If the SPD refuses to form a grand coalition, an SPD-Green minority coalition is possible with the support of the far-left Die Linke. This configuration is highly unlikely though—Die Linke is opposed, and it has a stigma as the successor of the East German Communist Party that that makes the SPD and Greens reticent to rely on it.

What does it mean for the eurozone?

Many investors expect there to be a sea change in the German approach to the peripheral countries and to the institutional shortcomings of the eurozone once the election is out of the way. This is partly out of belief that Merkel can take bigger risks in Germany’s approach to the crisis without elections hanging over her head. It is also because investors believe a coalition with the SPD would pursue more euro-friendly policies. Both arguments are overstated.

Merkel’s approach to the eurozone crisis has been gradual, with Germany only providing concessions to debtor countries in exchange for a series of conditions. There is very little appetite among the German public for bolder moves by the German government. A YouGov Deutschland poll released in early September showed that 52% of respondents oppose committing to further loans for Eurozone countries (35% in favor), 57% opposed debt forgiveness for any peripheral countries (31% in favor) and 56% did not think the next government would have the mandate to accept a joint backstop for European banks (29% believed it would). Even without a national election hanging over her head, Merkel is unlikely to budge from her incremental approach.

The SPD seems more euro-friendly than the current government in some ways. However, it will have a hard time reversing the current government’s approach to the eurozone given that the SPD gave all of Germany’s major legislation on Europe its stamp of approval in the upper house of parliament (Bundesrat), where there is an SPD/Green majority.

Furthermore, the SPD’s influence on Germany’s position on Europe would be hamstrung in a coalition with the CDU/CSU. SPD leader Peer Steinbrueck has criticized German demands for austerity in the periphery over the past few years, instead supporting a Marshall Plan in Europe to generate growth. The SPD may be more willing than the CDU to loosen deficit targets for the weaker eurozone countries. Still, all the major parties in Germany support fiscal consolidation at home, so it is highly unlikely any German government would agree to offer the scale of stimulus that the periphery needs to return to growth.

The SPD is also slightly more in favor of a Debt Redemption Fund, which is a limited form of debt mutualization. The CDU has said that a Debt Redemption Fund or other forms of fiscal union could be acceptable, but only at the end of a long process of mutualizing assets and undergoing political union in the eurozone. This difference is very nuanced. While the SPD might be more open to debt mutualization on a shorter time scale, any German government will continue to prioritise protecting German taxpayers from paying for other countries’ mistakes.

Another difference between the two biggest parties is their views on a banking union. The SPD is in favor of a more comprehensive banking union that includes a Single Resolution Authority to wind down banks. The CDU, on the other hand, is more in favor of a looser banking union, with a board of National Resolution Authorities handling bank resolution. A grand coalition would most likely continue to adopt Merkel’s reluctant attitude towards a full banking union.

Doing the Minimum

Rather than dramatically shifting its approach to the eurozone crisis, the new German government will most likely continue to do just enough to keep the eurozone from fracturing, without doing much more. The only way this might change is if Germany is pushed into it by the markets. Political instability is high in Greece, Portugal and Italy, and there is a risk any one of these governments could collapse. High youth unemployment and austerity fatigue after years of recession make some of the peripheral countries tinderboxes for social unrest. An announcement by the Federal Reserve that it will begin to taper its asset purchases could cause monetary conditions to tighten sharply in the periphery, choking off any hope of an economic recovery. If any of these risks were to materialize, the German government could be forced to abandon its gradual approach to the eurozone. In a currency union that has fundamental institutional flaws, doing “just enough” will eventually have to involve bold steps towards a banking, political and fiscal union.

Megan Greene is a senior fellow with the Global Business & Economics Program at the Atlantic Council.