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Only losers emerge from German political stalemate

If you lived in Germany or a neighboring German-speaking country, there was no escaping the drama. For the last four-and-a-half months, talk shows have done little else but debate the travails of building a government in Europe’s largest economy. After about three months it got so old that one no longer wanted to tune in. The comedy shows became increasingly witty — not a trait usually associated with Germans, but the situation seemed so ridiculous that one was in need of satire and comic relief. If you lived anywhere else in the world, there was oblivion to the drama unfolding in Germany, except for the occasional op-ed piece or news segment. 
Four-and-a-half months after the elections, Germany’s Christian Democrats (CDU), their Bavarian sister party the Christian Socialists (CSU), and the Social Democrats (SPD) are said to have finally reached a coalition agreement. The CSU won some ground by limiting the inflow of refugees to 220,000 per year; the SPD and some circles in the CDU won on strengthening the eurozone and ending austerity; and the SPD won on emissions targets and the environment. Healthcare and labor laws were the sticking points — the SPD was not in favor of fixed-term contracts for employees or different healthcare treatment for privately and publicly insured patients. 
The SPD is said to be getting the finance, foreign and family/social affairs ministries, the CSU the interior and transport/digital infrastructure ministries, and the CDU the economy and defense ministries. The SPD drove a hard bargain and won a lot, which was important because it now needs to give its members a vote on whether or not it enters the new grand coalition (“GroKo”). This may be dicey, because neither the agreement nor leader Martin Schulz are popular with the base, meaning that the coalition agreement is not yet set in stone. The process will drag on because the SPD members’ plebiscite takes the form of a postal vote. If lucky, Germany may finally have a government in place by Easter, which will be an astounding six months after the election.
There were unusual scenes in front of the various party headquarters where the negotiations went on into the wee small hours of the morning for many days. They should have reached an agreement by Friday night last week, but talks extended day after day after day. Chancellor Angela Merkel’s CDU was somewhat traumatized by the failure of the first coalition negotiations between the CDU/CSU, the Greens and the Liberal Democrats (LDP) at the end of November. This was not surprising, given how little those four parties had in common on any issue. In the meantime, the SPD was dragged to the negotiating table kicking and screaming and Schulz lost face because he had unequivocally promised not to go into coalition with Merkel.

Merkel is now a wounded leader, clinging onto power for dear life, while rival party heads have also been weakened and the entire continent is missing its largest economy’s stable and considerate leadership.

Cornelia Meyer

The ghosts of coalitions past haunted Merkel because she managed to damage her coalition partners the SPD and LDP in two previous governments, while emerging reasonably unscathed herself. However, Merkel is now a much weakened leader on the domestic as well as the international stage. This will, in all likelihood, be the last time she heads up a German government. Schulz and the CSU’s Horst Seehofer have also been wounded by the process. The real issue is that neither the SPD nor the CDU have any obvious candidates for leadership. In the CDU’s case, this is because Merkel famously squashed all potential successors. The CSU, meanwhile, has the feisty and aggressive Markus Soeder anxiously waiting in the wings to take over from Seehofer
All in all, this process has only produced losers: Merkel has fallen from her pedestal as a globetrotting, problem-solving political rock star. She is now a wounded leader, clinging onto power for dear life, while Schulz’s authority has been undermined in the SPD. The elections have already cost Seehofer his premiership in Bavaria. He is rumored to be the next minister of the interior and may go into retirement after that.
Most of all though, it is Germany and Europe who come out of this as losers. Post-war Germany has always been a functioning democracy with strong mainstream parties that were able to agree on how to govern, and this served the country and its economy well. The economy rose from the post-war ashes and powered on to become the world’s fourth-largest, which is of huge significance to the world at large.
The political landscape has also now changed for good. Up to now, the underlying consensus used to be one of political correctness and strict adherence to law and democracy amid all the day-to-day political squabbles. But the indecisiveness of the big parties has created space for the far-right, populist Alternative fuer Deutschland (AfD) to enter parliament. They are now the largest opposition party, which brings with it the perk of chairing important parliamentary committees. The tone in the Bundestag (German parliament) will change for good. Up to now, tone and language mattered a great deal, but gone are those days. We will have to see what this new force in parliament, combined with other societal problems, will do to the very fabric of German democracy.
Europe and the world are losing too. The Franco-German alliance, first established by Charles de Gaulle and Konrad Adenauer, was behind much of Europe’s unification and problem-solving. Germany’s stability and considerate leadership has seen Europe and the world through so many international crises. It will now be upon others, like the young and energetic French President Emmanuel Macron, to take on that mantle of leadership from Merkel. She indicated as much during the World Economic Forum in Davos at the end of January.
• Cornelia Meyer is a business consultant, macro-economist and energy expert.
Twitter: @MeyerResources