Three weeks after the Bundestag election in Germany and the discussions between CDU, CSU and FDP continue. It is still not clear what the exact policy directions of the new coalition government will be, or who will occupy which ministerial/government posts.

I see an interesting difference in the coalition bargaining between the parties and what has gone on in NZ after MMP elections since 1996.

The German parties are driving hard bargains. Both the CSU and FDP are sticking to their guns and placing demands on Merkel’s CDU that they make concessions so the smaller parties honour their pre-election commitments. There have been several examples of this as the discussions have gone on, for the FDP most notably in measures protecting personal privacy.

But as predicted, the big one sticking point is tax cuts: both smaller parties want them, the CDU knows they can’t really afford them. Merkel doesn’t want to be seen as fiscally irresponsible and run large deficits just to finance tax cuts (and the CSU will not allow this anyway). The result is a sort of Mexican stand-off. This has been going on for weeks. It has finally been decided that there will be tax cuts, the question is how big they will be.

The important point here compared to NZ is that the coalition bargaining is very detailed, and very contested. I am not an expert on NZ’s coalition agreements, but NZ moved away from both these aspects after the first experience with coalition government in 1996.

Then, Winston Peters and NZ First undertook to draw up a coalition agreement which set out most important policy directions in writing. Peters drove such a hard bargain that he was seen to be holding the country to ransom, and the discussions took so long that the country was without an effective government for two months. NZ First ended up going with National, which was the opposite of what they had alluded to pre-election. The coalition didn’t last very long, and neither did NZ First’s (or MMP’s) popularity.

Since this negative experience with detailed, drawn-out coalition bargains NZ has moved to a more flexible approach based on agreements on confidence and supply (settling other issues on a more ad-hoc basis), which would seem to be more in keeping with the country’s Westminster/common law tradition. Helen Clark’s Labour did this with the Greens in 1999/2002 and with NZ First/United Future in 2005. John Key has a similar confidence and supply agreement with ACT, United Future & Maori Party.

The Germans, however, seem happy to persist with longer, more contested coalition bargaining phases in which major policy issues are hashed out in detail after the election. This is more in line with the German tradition of constitutional consensual government, and the German civil law.

The first unofficial results for the election are in:

CDU/CSU: 33.5%

SPD: 23.3%

FDP: 14.6%

Left Party 12.9%

Greens: 10.2%

This situation should be enough to give the conservative CDU/CSU and the liberal FDP enough seats to form a ‘bourgeois government’.

The results for the two big parties are their worst ever; the FDP has its best result in a decade. This election could also set records for another reason: It seems approximately 5% less people cast their votes than at the last election (which was the lowest rate ever).

Neither the SPD or CDU/CSU is impressed with its results; both are blaming the Grand Coalition for their losing an independent profile and driving voters away or to smaller parties. However the Union has achieved its main goal: to govern without the SPD. Angela Merkel’s position is now very strong and this victory will cement her leadership credentials in the conservative Union against the many ambitious potential challengers in her party.

An FDP/Union coalition should really bring about the pro-market reforms that Merkel campaigned for in 2005 but was not able to enact in the Grand Coalition. However the shadow which hung over this year’s election campaign, huge budget deficits for years to come due to bank bailouts in the financial crisis, will severely impede Merkel’s capacity to enact reform. Tax cuts in particular, a favorite goal of the FDP, do not look likely and were laughed off by SPD finance minister Peer Steinbrueck during the campaign as simply impossible.

The SPD is quite open about its result being a disaster. The question is where the party goes from here which, quite frankly, no one can say at the moment. There will be a lot of long faces in the SPD, where many had hoped that another Grand Coalition would allow the party to distribute a decent number of Ministerial and State Secretary positions; a simple Bundestag salary and position in the Opposition pale in comparison.

Mrs. Merkel, Who Will It Be?

September 23, 2009

So five days out from the election to the German Bundestag it is now fairly clear that there are only two possible results:

1) Another Grand Coalition

2) A CDU/CSU – FDP coalition.

Why? Firstly because the SPD and Greens do not have much of a chance of getting enough votes to form a coalition. This has been clear since before the start of the election campaign and has not changed: As of today’s poll, the SPD is on about 24% and the Greens 11%. Together, 35%. Doesn’t cut it.

Also, as before the SPD rejects a coalition on the Federal (Bundestag) level with the Left Party. Not that that would be possible going by current polling because the Left gets only 11.5%. Add that to the SPD and Greens and you still don’t get a majority.

Finally and most interestingly, on Sunday the FDP leader Guido Westerwelle came out and finally categorically rejected a so-called ‘Traffic Light Coalition’ of Greens, SPD and FDP.

So the question (which has only be slightly narrowed since July) is: Will Chancellor Merkel be able to form a ‘bourgeois coalition’ with her preferred partner the FDP, or will it be business as usual in a Grand Coalition come Sunday? The CDU/CSU has 35% and FDP 13.5% on current polling.

The word is that the overhang mandates –  direct mandates won in electorates exceeding the overall proportion won by the party in the country – will tip the balance in favour of the CDU/CSU and FDP. The SPD are already complaining that this is a misrepresentation through the electoral system, which some are seeing as a concession of defeat.

A reinstating of the Grand Coalition would certainly be a dull ending to a dull election campaign, where neither of the larger parties has confronted the other on any substantial issues of policy or personality. So maybe it would fit.

Duel or Duet?

September 15, 2009

This week we saw the much-anticipated TV debate between CDU/CSU leader and Chancellor Angela Merkel and her challenger Frank Walter Steinmeier from the SPD. It was hoped that this would bring out the fighting spirit in both of them, or at least one of them. However it was, alas, a flop.

Concerned more with patting themselves on the back for their fine work during their grand coalition of the past four years than attacking each others’ policies, the two candidates avoided direct criticism of each other. Even during the debate, the frustrated TV presenters were calling it ‘more of a duet than a duel’.

Both major parties are, predictably, calling the debate a victory for themselves; voters see it as a draw. If anything, Steinmeier surprised viewers – however one can assume their expectations were low. He was rated in polls after the debate as ‘more convincing’.

Apparently, the Greens/FDP/Left Party TV debate was much more entertaining, but I haven’t looked at it yet.

Always good for a laugh, the tabloid paper Bild led an article on the duel with a hilarious pun playing on an Obama campaign slogan: ‘Yes We Gähn’ (Yes We Yawn).

Public enthusiasm for the election so far has been low, and German comedian Harpe Kerkeling has made good mileage out of his satire based on a fictional Chancellor candidate, Horst Schlemmer who is ‘liberal, conservative, and left’ (His election slogan is another interpretation of Obama: Yes Weekend!).

Wahl Watching

September 2, 2009

Excuse my awful pun: The German word for election is ‘Wahl’. I thought I might post on the federal election campaign over there seeing as I have neglected it for a couple of weeks.

As for how the parties stand in the polls: The smaller parties (FDP, Green and Left) are all looking pretty much the same – between fourteen and ten percent each. The SPD is still looking pretty dismal, but has risen from its all-time low of 20 to 22%. The CDU/CSU is down from a high of 38% to 36%. So not much movement there really.

This is how the Bundestag would look according to current polling (from Spiegel Online):

GermCoal02Sept

However, one development has added a certain element of uncertainty: The poor results of the CDU/CSU in the state elections in Thüringen and Saarland this weekend, where they will probably lose the state premierships.

Of course this has given the SPD some encouragement, but mostly it has just kicked off a wave of speculation on coalition possibilities at the federal level: Will the CDU/CSU prefer another Grand Coalition with the SPD if it cannot form a government with its preferred partner the FDP? Will the SPD be tempted to enter into a (up to now taboo) coalition with the Left Party in the same situation? The list could go on.

There has also been some criticism of how Merkel is campaigning: Not enough criticism of the SPD and Left and not enough real policy debate, say some. Her tactic seems to be to stay the self-confident Stateswoman and win the race to the middle without alienating support from the left.

And what are the big issues of the campaign so far? Well, the two which stick out are Unemployment and Tax Cuts, from the SPD and CDU/CSU respectively.

SPD promises of full employment within ten years have been scoffed at (probably rightly) by the CDU as unachievable – we have seen such promises go unfulfilled by Schröder’s government, they say. The promises of tax cuts from the CDU/CSU have been slammed as unrealistic and unachievable by the man who should know best – current SPD Finance Minister Peer Steinbrück. So it seems like a bit of a stalemate there.

Despite these side-shows the real question is by how much the CDU/CSU will win and whether it will be able to form a government with the FDP. With its poll results very low, and lacking a charismatic Chancellor candidate or mobilising campaign issues, the SPD is still looking very much the underdog.