The Guest Blog

Guest post by Maximilian Wirth, policy advisor in Berlin

The negotiations for a potential government coalition in Germany collapsed today. Since the elections in September, the conservative CDU under the guidance of Chancellor Angela Merkel had tried to form a new alliance with the Greens and the free-market FDP.

However, the FDP leader Christian Linder decided today to pull out of the negotiations because he sees no “basis of trust” to rule under such a government for the next four years. The two major issues of dispute between the potential partners were financial and environmental policies. The Greens fought for the prohibition of internal combustion engines by 2030 – a topic vigorously discussed given Germany´s reliance on the car industry. The FDP wanted to lower the income – as well as more open rules to allow the families of refugees the subsequent immigration. Two positions, which ultimately turned out to be incompatible with the conservative CDU and the free-market orientated FDP.

The ending of the negotiations was nevertheless a surprise for the German population and international observers. Germany´s economy is currently booming and tax revenues climb from one record high to the next. As such, it was expected that the parties would manage to come to an agreement, given the possibility to actually finance the broad variety of claims the different parties had promised on the campaign trail.

What happens next?

Three different options are now possible in Germany:
First, the CDU could try to form a government with the Social Democrats (SPD). The two parties already ruled the country together for the last four years. However, after a disastrous election outcome in September, the SPD had announced and reasserted this position already not to be open for another participation in the government, but to renew itself in the opposition.

Second, the CDU could try to rule under a so-called “minority government”. In that case, the ruling party does not have the majority of the seats in parliament by itself, but tries to organize the needed majority from ballot decision to ballot decision.

The third possibilities are new elections. But it does not seem likely that the old election outcomes would change much. At worst, the right-wing-populist party AFD, which entered the parliament for the first time in the last elections, could win more seats. In which case, it would be even harder to form a government coalition afterwards.
In any case, the future of Angela Merkel as the chancellor in Germany has become uncertain.

Political uncertainty is bad for Germany and its partners

The failure of the German political parties to form a new government is problematic not only for Germany but also its international partners.

Germany has the largest populations and strongest economy in Europe. As such, the German government is also an important factor when it comes to political decisions making in Europe. Several problems will now have to be solved without the voice of such an important partner. The Brexit is due March 2019, the Euro Crisis might be back on the agenda sooner than expected, the question for a new vision of the European Union as a whole – initiated by the French president Macron last month – will now have to be negotiated without a clear German government position at the table. An uncertainty, which will hopefully be overcome soon.



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