Disharmony Among Prospective Partners

From the perspective of an ordinary voter, the current election campaign is fairly boring because the outcome seems pretty obvious. On the one hand, the conservative and the liberal parties, CDU/CSU and FDP, would like to form the next government and may perhaps actually win the necessary majority of seats. On the other hand, there is no single party or other coalition model both willing and realistically able to claim power for itself. SPD and the Greens, who governed the country between 1998 and 2005, have lost so much popular support that they reasonably can't expect more than 36 or 37% of the vote. The only option that would bring them at least close to forming the next government again would be a coalition including the Left. Both have repeatedly ruled this out. So, their foremost priority is to prevent a CDU/CSU-FDP coalition - a rather sad priority and far from anything like an attractive policy project on its own that could fascinate the electorate.

If this wasn't bad enough, a closer look at the Conservatives and the Liberals may also astonish if not disturb many voters. Although Chancellor Merkel, the CDU's party leader, has declared the alliance with the FDP the only source of governmental stability for the next few years, the parties involved haven't yet behaved like partners but have quarreled about their reliability and competencies on an almost daily basis. Especially the CSU, the Bavarian sibling of the much larger CDU, hasn't missed many opportunities over the last weeks to complain more or less overtly about the Liberals, some of their policy proposals or the personal competencies of the party's chief staff.

These days, the major theme of their dispute is whether they can trust each other on whether the envisaged coalition is the only option to form the next government. The Conservatives and the Liberals are wary about the other not fighting strongly enough for the common victory as they indeed do have alternatives. Still today, the FDP's general secretary, Dirk Niebel, is cited on the party's homepage: "We are clear and the union [i.e. the Conservatives] is not."

The dispute between potential partners, which may seem surprising to the public, can be attributed to several reasons:

First, the joint victory of the CDU/CSU-FDP coalition seemed almost certain over the last months. As a result, it was logical for each party involved to try to increase its share of the votes at the expense of the other and thereby gain more influence in the future government. Particularly the CSU and the FDP are keen on outperforming each other.

Second, these two parties already form a coalition government in Bavaria since last year's state parliament elections which ended more than four decades of uninterrupted CSU rule. Of course, this party's first priority now is to restore its traditional role at the state level as soon as possible, and a good result at the Bundestag election would be an important step towards that aim.

Third, the FDP is more than irritated by the current popularity of the federal minister of the economy, Karl-Theodor zu Guttenberg (CSU), who is perceived as threatening the Liberal's claim to this ministry after the election, as the economy is one of their core policy domains.

Fourth, Angela Merkel needs to improve the CDU/CSU election performance as both parties only got 35.2% of the vote in 2005, a result that was viewed by many in her party as a disaster. Now, Angela Merkel has to prove that she's able to win elections (or at least to secure a share of the votes the party was used to for many years).

Fifth, and finally, the Conservatives disagree with the Liberals on some policy issues, for instance on how much regulation the finance sector needs or on the right balance between strengthening security measures and protecting civil rights.

From the point of view of CDU/CSU and FDP, these are five good reasons, at least, for them to attack each other and try to gain additional support in the election. However, too much discussion and disagreement between potential partners certainly does not attract many voters who will eventually question the parties' ability and willingness to form a stable government. So, it might be wiser for them to quit their dispute and seek the confrontation with their common opponents. And by the way, the latest polls published yesterday showed that CDU/CSU and FDP have lost support over the last days. They can expect 48 or 49% of the vote at the moment, maybe enough to build a government, but one cannot be sure. It will be interesting to see how they react now.

--Jörg Siegmund

World Champion or only No. 1 in Europe?

For decades Germany has been running a trade surplus, which is caused by its strength in exports. But as the diagram below shows, it was only in the last couple of years that the surplus really skyrocketed. Its export strength earned the country the nickname 'export world champion.' However, recently China overtook Germany in this discipline and while some see this as a sign for a loss of competitiveness and relevance, others welcome this development. Germany is being criticized from economists at home and abroad (including some prominent members of the profession in the U.S.) for being partly responsible for the current economic crisis because it was on the other side of the equation of the large global macroeconomic imbalance, together with China and Japan. The huge current account surplus was only possible – so the argument goes – because the United States acted as the consumer of last resort.

There is little talk about these issues during the election campaign that so far has not been about much else than coalition options and the misuse of chauffeur services. But within the ministries, the think tanks, lobbying groups, and in academia, the pros and cons of Germany's export dependency is being hotly debated. And it is probably no surprise that the Germans cannot easily let go of a trophy that many envied them for in the past. To me the question whether and how this export-dependency should be tackled should be thought through thoroughly before the country walks down this path.

The political left in Germany uses this discussion as proof for their general economic concept of higher minimum wages, a general higher wage increase, more social spending, more government investment or in general a politically induced increase of domestic demand. Instead of producing more than we consume, the gap, in their view, shall be closed through government intervention into markets. On the other side of the political spectrum the arguments are less obvious but in my view worthy of consideration for the U.S. critics of Germany's export driven growth model.

Germany's trade is mostly with other members of Euroland. Focusing on Germany's trade statistic with the rest of Euroland is much like looking at California's trade relations with the rest of the U.S. If one takes out the trade with other EU member states, Germany is downgraded from ‘world champion’ to ‘European champion,’ and its remaining current account surplus is insignificant for the rest of the world.

Germany is an aging society. Its population pyramid has for some time lost the shape of a triangle as can be seen below. In only a few years from now the size of the population will dramatically shrink and a smaller share of society will be at an age in which they can productively contribute to produce the GDP. Taking this into consideration, a capital outflow now (the other side of running a current account surplus) is like building a capital stock for the future in which the country as a whole will be less productive. If one follows this argument Germany as a whole acts rationally and a bit like a sovereign wealth fund of an oil-rich nation that will one day in the not too distant future run out of its natural resources.

Even if one does not buy these arguments, the current debate about Germany's export-driven economy will unlikely lead to any political consequences and cause a shift towards the production of more goods and services that are being sold domestically. The virtues of a higher degree of the international division of labor should not be traded in for a balanced current account. If anything the debate will put forward different policy options that try to strengthen domestic demand and therefore increase imports (instead of reducing exports).

Here the election campaign offers two competing parties that were recently very successful in the state elections on August 30. The Left Party can convincingly offer the whole portfolio of policies redistributing income to lower income groups and promises higher government spending on social programs and public investment. In contrast, the FDP has for years repeated its mantra of strengthening the middle class through lower taxes and leaving the most productive part of society a bigger share of their earned income, thereby strengthening domestic demand as well. It will be interesting to see which policy will be put into practice following this month's election.

--Tim Stuchtey

A Small Miracle

Just a quick addition to yesterday's posting below. After last Friday's air strike in Afghanistan, the German parliament squeezed a special session into an already tight schedule today to let the chancellor, the foreign minister, and the defense minister explain the incident. Merkel used her speech to go into the offensive by announcing a joint German-French-British initiative for an international conference to establish new goals and standards for success in Afghanistan, and to establish a concrete plan for the transfer of responsibility to the Afghan government.

She was careful not to be specific about the time frame, but her goal was very clear: to create at least a vague perspective for leaving Afghanistan at some point in the future. She, too, has realised, that she needs this "perspective thing" to release some public pressure and to be less vulnerable to political attack after the elections.

In sum: last Friday's incident has forced the government to take the initiative and to finally talk about the Afghanistan mission in truthful and realistic terms. Merkel and Steinmeier today laid the foundation for keeping the Afghanistan consensus alive after the elections. It's a small miracle that this is possible in the midst of an election campaign. But it's good for Germany, good for Afghanistan, good for the allies.

The Afghanistan Consensus Holds - For Now

After Friday's German-led air strike on two hijacked fuel trucks near Kunduz in Afghanistan, ISAF, the Afghan government, Germany's Ministry of Defense, peace activists, and basically everybody else are still at loggerheads over assessing the impact of the attack, which killed dozens of Taliban and an unknown number of civilians. Less than three weeks before the general election, you would think that this debate could maybe translate into some juicy campaign drama. But it doesn't. The great basic SPD-CDU-FDP-Greens consensus on Afghanistan still holds while the Left party finds it hard to intensify its anti-Afghanistan rhetoric which was already pretty strong before the incident.

Crucially, the SPD leading figures, including Foreign Minister Steinmeier, party chief Müntefering, and Andrea Nahles from the left wing of the party, stood up defending the Afghanistan mission, thereby preventing a lingering anti-war sentiment from finding breeding ground in the political mainstream. All three of them rejected a call for a specific time line for a German withdrawal issued by ex-chancellor Gerhard Schröder. Schröder, once again showing his unfailing instinct for popular sentiment, had used an SPD campaign rally to ask for withdrawal by 2015.

Schröder knew exactly what he was doing. He was trying to at least temporarily resolve the SPD's policy dilemma on Afghanistan which stems from the fact that the pacifist heart of the party is in conflict with its realist brain. A large majority of SPD voters (and of the public, for that matter) would like to see German troops leaving Afghanistan rather sooner than later. Unwavering so far, the SPD (which led Germany to the Hindu Kush in 2001/2002) is sticking to its original position on the war, arguing that this mission is serving Germany's security at home.

By asking for withdrawal at a later time, Schröder was trying to bridge the gap between both positions. He was attempting to establish the Social Democrats as the party that provides a perspective for getting out without unreasonably undermining Steinmeier's pro-Afghanistan position. As much as I hate saying this, this was a pretty clever move, and I am pretty sure that it prepares the ground for an SPD shift of positions after the elections. It was also pretty clever to let this new position be inserted into the debate by Schröder whose anti-Bush stand during the Iraq war made him the hero of the pacifist mainstream in Germany. Schröder has added a strategically valuable nuance to his party's profile while granting Steinmeier plausible deniability.

Even after the air strikes in Kunduz, Afghanistan is no campaign issue. But pressure is building up to revisit the issue after the elections. For the SPD, Afghanistan will be one of two make-or-break issues in its relationship with Die Linke (the other being social welfare legislation and Hartz IV). And in turn, the relationship with Die Linke will be the make-or-break issue for the SPD's political future. It might be true that this is the dullest campaign in history. But it looks like it will be morphing into one of the most interesting post-elections periods of all time.

The Green Luxury

This week one of the most popular German talk shows, named Hart aber fair (“Tough but Fair”), has demonstrated quite plainly the prevailing constellation of the party system: Renate Künast, one of the Green party’s front-runners and chair(wo)man of the parliamentary group, was sitting in the very center of the discussants. Sigmar Gabriel (SPD) and Oskar Lafontaine (The Left) were placed on her left, whereas Guido Westerwelle (FDP) and Roland Koch (CDU) sat on the right side of the panel. This seating arrangement was just perfect to follow the – more or less open – courtship of prospective coalition partners.

In fact the Green party seems to be in a very comfortable position at the first sight. The party not only achieved the best result ever in the European elections last May but also seized parliamentary seats in the recent ballots in Thuringia, Saxony and Saarland. It is represented in twelve of the sixteen Länder parliaments altogether. Only in two of these, however, the Green party is in government. In Bremen they opted for a coalition with the SPD, whereas in Hamburg they built the first coalition with the CDU. The ongoing coalition negotiations in Thuringia and Saxony offer another opportunity to restore them to power, at least at the regional level. On the national level the race is so close, that the Greens might be the necessary third partner to build a majority coalition in parliament.

When Renate Künast proclaimed that “the middle-class in Germany was Green” she referred to the fact that the green electorate is no longer restricted to the alternative, post-materialistic milieus but comes from the urban middle-class of the well-educated, better income establishment. At the same time it is worth noting that the Greens even gain some ground within the more conservative rural population. According to a most recent opinion poll at least 29 percent of the electorate would appreciate a coalition of CDU, FDP and the Green party (which is actually the second best rank at the moment).

At a closer look, however, the situation of the Greens is not so luxurious. Party strategists who tried to promote new coalition scenarios had to realize that the Green party is not yet ready for a coalition with the Christian Democrats and/or the Liberal Democrats. Instead, there are still some substantial conflicts with the liberal-conservative camp, above all the issue of nuclear energy. As a consequence the Green party convention in May rejected a “Jamaica-coalition” (CDU, FDP and Greens) and avoided any commitment for a “traffic light-coalition” (SPD, FDP ad Greens) as well. A coalition with the Left on the national level was repeatedly denied. The preferred revival of the red-green coalition does not seem realistic, yet. In other words: The Green party is in a quite stable up wind but lacks a clear strategic option to come back into power.

The campaign therefore avoids focusing too much on the coalition game. In contrary, Künast, Trittin, Roth, Özdemir et al. try to present the Green party as an independent player. The top slogan: Aus der Krise hilft nur Grün (“Only the Greens will overcome the crisis”) primarily refers to global issues, such as economic, ecological and development policies. The so-called “New Green Deal”, approved by the party convention in November 2008, lists proposals which explicitly distance the Green party from the grand coalition's policies as well as from the Liberal Democrats’. Given the fact that the voter market has become highly-competitive this might be the best strategy to mobilize voters. If there is enough leeway for compromise will be tested when it comes to coalition building.

Manuela Glaab

Daring More Democracy

There has been a lot of fretting about the evolution of the German party system--mainly by publications like the influential Economist newsmagazine and academics. Many articles have been published about the decline of the catch-all Volksparteien. In fact, the share of the vote commanded by the SPD and CDU/CSU has fallen back to the level of 1949 with less than 70% of the total vote in 2005. Current polls put these parties' combined strength at a mere 60%. These levels of support are down from a peak of 90% in 1972. Some pundits express only a little concern revolving around challenges in forming and maintaining more complicated (three-party) coalitions. But underneath the surface there are diffuse fears that another "Weimar-esque" situation may be developing, including extreme partisan fragmentation, unwieldy coalitions, instability and legislative gridlock.

Of course it has already been 53 years since Swiss journalist Fritz Rene Altmann proclaimed that "Bonn ist nicht Weimar." Berlin isn't Weimar either--even if the capital's scene is as fabulous again today as it was in the 1920s. There is no comparison between the social, economic and political situation then and now. Where are the Junkers? The militarists? The revanchists? The vanguard of the proletariat? (Well, there are the surging Linke, but even they pale in comparison to the communists of yesteryear). There is no flawed constitution with an overly permissive electoral system, semi-presidentialism and the "emergency powers" clause. And of course contemporary Germany is surrounded by friendly countries--all deeply and irrevocably embedded in multilateral institutions.

So, why are so many so scared of the decline of the two big parties and the rise of smaller ones? Perhaps the easiest explanation is a basic risk and change aversion amongst many Germans. There was something soothing and predictable about one of the two big parties dominating any coalition government, the long tenures in power (the country only had its first complete partisan alternation in 1998), and the "consensus" politics that often resulted. But maybe consensus is over-rated. Maybe it is no longer possible--resource constraints make it impossible to buy off all relevant interests (something recent German governments have also learned at the EU level). And maybe such hyper-stability is no longer necessary in a deeply democratic and stable polity like Germany's.

Perhaps an even simpler explanation is that the current situation is caused or exacerbated by the grand coalition government. Political scientists have long noted that any such over-sized coalition will lead to declining support for the parties in government and an empowerment of any oppositional forces. Certainly, this is the conventional wisdom from the first grand coalition of 1966-1969, that facilitated a 4.3% result for the right-radical NPD in 1969 (the closest a right radical party has ever come to gaining representation in the Bundestag).

This time it is the left that is exposed. Clearly, the SPD's time in power (1998-present) has led it to the center (right), leaving its left flank extremely vulnerable. This hole in the political spectrum has now been filled by the Left Party, which is currently polling 11 % (the same as the Greens). One could also point out that the Greens are also partially responsible for this situation, given their widely documented move to the middle. In any case, this is the second time in several decades that the SPD has been unable to thwart or co-opt new leftist challenges--earlier with the Green Party. Perhaps all of the criticism and the poor poll results that SPD has gained are deserved--and maybe they do not go deep enough--given these two epochal political failures.

Or maybe Germany is just becoming more "normal." I know, I know--"normalization" is a bad word in the German context--verboten. Yet, I have always thought that there is nothing wrong with wanting to become more like others--when the others are stable, relatively tolerant liberal democracies. Several political scientists have made exactly this point--noting that the more typical continental European pattern is to have left and right blocs with multiple and changing parties inhabiting the partisan spectrum. How often have French or Italian center-right parties changed their names in recent years?

And what's wrong with this situation? I think this is preferable over most alternatives. Presidential systems have real flaws and two-party systems à la Britain or the US also have major drawbacks--mainly because there are multiple, hard-to-control factions politicking and making deals behind closed doors, instead of ideologically cohesive and transparent parties. Moreover, heterogeneous groups must coexist--think of libertarians and social conservatives in the US Republican Party. It is better to negotiate inevitable differences of opinion in the light of day.

Thus, the emergent multi-party system in Germany should be welcomed as a 21st century way to "dare more democracy."

--Eric Langenbacher

A Surging Left?

It has become a tradition for pundits to obsess about the latest state Landtag elections as barometers of national political sentiment and future national results. Certainly, state results just a month before a Bundestag election take on even more significance--as the results in the Saarland, Thuringia and Saxony last weekend attest. I also told myself that I would not buy into the media-hype, which so often over-exaggerates the results and their impact.

So, from a sober perspective, these results are nothing surprising. The parties' final tallies corresponded pretty well to what polls were predicting for quite some time. In Saxony, the CDU did quite well, losing less than 1% from its 2004 result. In Thuringia, its 12 point decline was largely due to the scandals surrounding the incumbent minister president. In the Saarland, the 13% decline was more significant, but the CDU is still the largest party. One could also point out that the dominant CDU scored very high in all three states in 2004 (over 40%) so there was nowhere to go but down, especially given the vicissitudes of local politics and the ever-present political pendulum. In terms of national significance, it has been pointed out that the three states comprise only about 10% of the country's population, so are hardly representative bellwethers.

On the other hand, I cannot help but to be alarmed at how well the Left Party did in all states--27.4% in Thuringia, 20.6% in Saxony (although 3% less than 2004) and a whopping 21.3% in the Saarland--which was more than 5% more than the last public opinion polls indicated. I am thus increasingly skeptical of the accuracy of the national polls that have estimated Left Party support to hover around 9% for months now. It should also be pointed out that the party is experiencing a marked uptick in popularity in states such as Lower Saxony.

I suspect that support for this party, and the left in general is being underestimated. This would not be surprising. Many have long been surprised that the "bourgeois" parties were doing as well as they were in light of the on-going financial and economic crisis. Left-populist parties continue to advocate easy answers to the economic malaise, which also resonate with what many have observed is a dispositional conservatism or aversion to change and risk in contemporary Germany. Moreover, the Left Party now has quite a bit of momentum, which is invigorating its leadership and rallying the base. I think that many have underestimated the leadership troika Oskar Lafontaine/Gregor Gysi/Lothar Bisky, who not only are seasoned political operatives, but are also among the most charismatic politicians active today.

The long-predicted CDU/CSU-FDP seems more and more unlikely. I suspect there will be surprises on election day and that the Left Party (and even SPD) will do much better than polls are predicting. I also do not understand why Merkel is continuing to conduct such a laid-back campaign. Perhaps she is waiting for the final stretch to unleash a more aggressive attack on opponents. But, I fear that unless she starts to actively counter the Left Party (and the SPD), it will be too late.

--Eric Langenbacher