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What is happening in Germany?

Dagmar Schiek, University College Cork


What is happening in Germany after the elections? Where will the new government lead the country, and what are the implications for the EU and Ireland?


I was asked to write a blog on those lines immediately after the elections on 26 September 2021, now nearly a month ago. However, knowing Germany (and having predicted the wrong coalition four years ago http://qpol.qub.ac.uk/german-election-2017/ ) I asked for more time.


The election result still deserves an evaluation. While it is not definitely resolved which parties will form a government, a provisional assessment of what the envisaged traffic light coalition would mean from an EU as well as from an Irish perspective is now adequate. So let’s address them in turn.


The election on 26 September illustrated how fractioned the country is. 25.7 % of votes went to the Social Democrats and 24,1 % to the Christian Democrats and the Christian Social Union (CDU/CSU). The major parties from the centre-left and centre-right together had less than 50% (49.8 %) of the votes. The Greens (14.8%), the Liberals (FDP, 11.5 %) and the far-right “Alternative für Deutschland (AfD)” (10.3 3) and the post-communist Linke (4.9%) shored up 41.5 %. This rejection of the traditional parties is the reason why both partners excluded a continuation of their grand coalition straight away, although under the German electoral system with its exclusion of smaller parties they would have had a very comfortable majority in the Bundestag. There is another relevant result: one in 10 voters in the largest EU Member State supported the AfD, a party under observation for its right-wing tendencies by the German Federal Intelligence Agency. German voters delivered a theoretical majority for a coalition of the far-right, the centre-right and the liberals: CDU/CSU, AfD and FDP would have had a narrow majority of 3 votes.


Coalition calculator: https://bundestagswahl.br.de/public/ec/ergebnis-bundestagswahl-2021-bayern-koalitionsrechner.html


Under the moral compass of Angela Merkel, such a coalition may have seemed unlikely. However, a sidelong glance on the election of the European Commission reveals that not all German Christian Democrats are averse to support by right-wing parties. In the European Parliament, the Left, Social Democrats, Liberals and Greens would have had a majority for electing the Dutch Social Democrat Frans Timmermans, who ran as the S&D lead candidate for the Commission President. However, the European Council would not endorse his candidacy due to opposition from countries suffering under his effective pursuit of a rule of law policy as a Commissioner in the Juncker Commission. The German Christian Democrat Ursula van der Leyen, proposed as a compromise candidate by the French President Macron, was immediately endorsed by 24 MEPs of the Polish PIS, a part of the ECR group, and by 14 unaffiliated MEPs from the Italian M55 movement. Since a large proportion of S&D and Alliance MEPs are rumoured not to have supported van der Leyen, it is very likely that her narrow majority (only 9 more votes than needed) included some of those extreme MEPs. (https://www.politico.eu/article/ursula-von-der-leyen-elected-european-commission-president/)


Seats in the European Parliament after 2019 elections: https://www.bbc.com/news/world-europe-48417744


The German electorate, in contrast to the elections in 2015, did not allow for a majority left of the middle, consisting of the Greens, Social Democrats and the Left. Next to a continuation of the “Grand Coalition”, the traffic light coalition is the only alternative to a right/centre right/liberal government, if a minority government with ad hoc support is excluded. While presently Social Democrats, Greens and Liberals negotiate a coalition agreement with the ambitious aim to elect Olaf Scholz chancellor on St Nicholas Day (6 December), there is still the possibility that another coalition or support agreement will form the German government in the end.


Coalition calculator: https://bundestagswahl.br.de/public/ec/ergebnis-bundestagswahl-2021-bayern-koalitionsrechner.html


From an EU perspective, one question deserves attention: will the new German government oppose an Eurozone policy allowing pro-cyclical spending or at least quantitative easing, and allow the whole of the EU to fund larger programmes such as the post Covid Solidarity Fund? This question is far from decided, even if the negotiations deliver a traffic light government. The last minister of finance, Olaf Scholz (SPD), had slowly but steadily steered Germany away from the course of only embracing budget and price stability, allowing the EU to endorse the Public Purchase Programme as a means to achieve quantitative easing, and to adopt an impressive investment programme expressing real solidarity between Member States. The problematic ruling by the Constitutional Court refusing to adopt a CJEU ruling in this context [http://qpol.qub.ac.uk/karlsruhe-5-may-2020-spelling-the-end-of-the-eu-or-indicating-distrust-in-judicial-dialogue/ ] did not induce a change in direction here. Should the Liberals achieve their goal to lead the ministry of finance, this change in direction would seem inevitable. The rhetoric of Christian Lindner neatly fits the programme of the “frugal four” within the Council of Ministers, who wish to return to prioritizing price stability and budget discipline in the Eurozone and beyond. Should the Greens secure the ministry of finance, support for a more Keynsian policy at EU level would be more likely, always tied to ecological aims the Solidarity Fund pursues alongside the support of socio-economic recovery. Should the government, against all odds, be formed without the social democrats, this direction is almost certain to prevail.


From an Irish perspective, the question arises in how far the new government will continue to support Ireland in combating post-Brexit damage, while understanding the continuing relevance of the position of Northern Ireland in this context. In this context, the traffic light coalition may be slightly better news than the alternative sketched above, if only because it promises a stronger external, and thus European orientation. Across the political divide, German politicians have a certain understanding of what division means for a country, and traditionally a favourable view of Ireland. However, that favourable view is most likely to exclude appreciation for a low tax policy, which in the SPD, Greens and the CDU is viewed as garnering unfair advantages not only for Ireland, but also for multinational companies. Olaf Scholz’s strong position in favour of a global agreement on minimum corporate tax is not disputed generally. Even a Liberal minister of finance is unlikely to support a low tax policy by an individual Member State.


Dagmar Schiek is the Synott Family Chair in EU Law at the UCC School of Law.


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