Huge challenges face the next German Chancellor

By Marian Schoen
Executive Director, EU Centre on Shared Complex Challenges, the University of Melbourne.

Germany’s newly-elected Chancellor will face significant challenges that will require difficult and divisive choices after the election this Sunday.

Opinion polling has consistently shown the incumbent CDU/CSU led by Angela Merkel leading with around 37% of votes, the SPD on about 23%, the AfD (Alternative for Germany) at about 11%, Die Linke (The Left) with approximately 10%, Greens about 8%, the business-friendly FDP around 9%.

The immediate challenge will be to form a coalition of the over 50% of votes required to form government.

The anti-immigration, anti-EU Alternative for Germany could be influential

Having achieved gains between 11-22% in all eastern German states, the AfD is predicted to win the battle for third place and claim a symbolic role as the opposition, thereby replacing Die Linke as the East German voice of protest. There is also a real possibility that opinion polls are underestimating the extent of voter backing for the AfD.

The AfD are not expected to be part of a ruling coalition because both the CDU-CSU and SPD have indicated they will not form an alliance with them. But if the AfD does win through as the third largest party, they will exercise considerable power over policy relating to migration and refugees.

The most realistic options for coalition-forming are another “grand coalition” between Merkel’s CDU-CSU and the SPD, or a so-called “Jamaica coalition” between the CDU, the FDP and the Greens party.

However, many SPD members are not keen to again be the junior partner and see a period in opposition as necessary to differentiate and re-establish the party’s electoral appeal. And there is limited common policy ground between the CDU and the Greens, and the Greens and the pro-business FPD. (Despite a resurgence of support for the FDP, a coalition with the CDU-CSU looks unlikely to deliver enough to form government).

One of Dr Merkel’s challenges in a fourth term will be to win back the trust of eastern Germans. The east is largely more Protestant while the west is more Catholic; and there are also differing economic and political contours between the north (poorer, traditionally SPD) and south (wealthier, CDU-CSU) all being factors in the vote.

A lasting, stable coalition in the Bundestag will be critical

While Dr Merkel is widely seen as a stablising force in the EU and the wider world and she offers voters a sense of reliability and continuity, she faces international challenges such as reforming the EU, US demands for increased defence spending, relations with Turkey, Russian geopolitical threats and the future of the multilateral global order.

Domestically, there are deep political uncertainties about unresolved issues such as migration and fears around globalization and global security.

The ongoing task remains of integrating the 900,000 refugees accepted by Germany since 2015 into the economy and society in general; despite now greater restrictions on refugee stays within Germany, and Dr Merkel’s calls for more even distribution of asylum seekers among German states and across Europe.

Many Germans are also concerned about the vulnerability of the German economic model and manufacturing base; as well as increasing social inequality and threats to social cohesion. High energy costs and low investment rates have impacted on German competitiveness in infrastructure and the digital economy.

Given the dependence of the German economy on global markets, any economic downturn in emerging markets is expected to impact in the near term on industrial companies in sectors like plant and machinery as customary multiyear contracts expire.

The decision by Dr Merkel to lower the retirement age, a reduction in real terms in the wages of the lowest paid 40% of workers, and demands for greater infrastructure investment all reflect the need for serious economic and tax reforms to shore up the economy against emerging global challenges.

The scandal over the German car industry (VW, Audi, BMW, Porsche, Daimler) cheating pollution emission tests will see domestic pressure to tackle diesel pollution and improve air quality in cities, with calls already for a ban on diesel vehicles in city centres.

Election authorities are also concerned that in the final days of the campaign there may be Russian attempts to disrupt the election outcome or sow doubt about the validity of the result, to create division and disinformation and sway votes in support of parties more aligned with Moscow, such as the AfD with its six Russian German candidates.

Outside of a major incident or crisis a few days out from the election which could lead to a change of voter minds, the question remains how many of the 30% - 40% of voters who say they are undecided who will seek to exact retribution for Dr Merkel’s refugee policy.

Should this significantly reduce the CDU-CSU’s consistent lead in the polls and the options for a workable coalition, it will affect the next Chancellor’s capacity to deal with the enormous challenges and deep political insecurities over a demanding four or five years ahead when putting off big decisions with more of the same will not be enough.

Banner image: The Bundestag. Credit: Adam Groffman/Flickr

This article was co-published with the Australian Institute of International Affairs.


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