September 20, 2013
Our Nina Schick wrote this op-ed for today’s City AM:
Open Europe blog team
For a vote touted as decisive to the future of the Eurozone, the German election campaign – which reaches its climax on Sunday – has been lacklustre. With barely any talk of Europe, it’s been defined by domestic issues – from data protection, to rent control and taxation.
We Germans love a good debate on taxation. But while Germany’s main parties can differentiate on domestic policies, there is no substantial difference on the Eurozone. Long after the vote, and regardless of which coalition takes the helm in Berlin, Germany will remain a slow and deliberating player. No surprise, then, that commentators have dismissed the campaign as the “most boring” in recent memory.
Coalition dynamics may make the vote more interesting, however – and the UK, especially, should take heed. While most initially thought the likely outcome would be a continuation of the current centre-right coalition between Angela Merkel’s CDU/CSU and the liberal free market FDP, this may be changing. With as many as 30 per cent of voters undecided, this election will go down to the wire.
Recent polls show support for Merkel’s CDU/CSU dropping, while support for the centre-left Social Democrats (SPD) has risen. The latest figures predict that Merkel would not be able to form a parliamentary majority with the FDP. There is even a chance the FDP won’t make it past the 5 per cent threshold needed to win seats in the Bundestag. Last weekend, the party crashed out the Bavarian parliament after state elections.
We may see a backflip to the grand coalition of 2005: Merkel’s CDU/CSU and the SPD. While these dynamics won’t change much in the Eurozone, they are important to the UK.
It would be in Britain’s best interest to see a continuation of Merkel’s current coalition. She is a key ally for David Cameron, and will have a decisive influence in determining the success of his EU renegotiation strategy. Both Merkel and Cameron have a similar vision of the EU: based on free trade, reduced regulation, and improved competitiveness. It’s unlikely that anyone other than Merkel will become Chancellor. But if she enters a grand coalition with the SPD, things might not look so rosy for London.
First, in German politics, the foreign ministry usually goes to the junior coalition partner. While relations between Paris and Berlin have been strained since Francois Hollande took office (his spending rhetoric rubs Germans up the wrong way), a SPD foreign minister would be more likely to turn to Paris than London. Under the last grand coalition, the SPD’s foreign minister Frank Walter Steinmeier (also a contender for the post this time around) notably undermined some of Merkel’s foreign policy plans.
Second, the SPD is keen on further financial regulation. Only a few days ago, its parliamentary spokesman vowed that pushing forward delayed plans for a financial transactions tax would be a “high priority” for the SPD if they enter into a grand coalition. Not great news for the City of London.
In short, German coalition semantics may not mean much to the Eurozone – but they certainly will to the UK.