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to going into opposition there will be
no continuation of the grand coalition.
This leaves Merkel with limited
options.The only way to secure a
workable coalition that does not
involve the SPD, the AfD or the far-left
Linke party is a complicated four-way
gathering of the CDU and CSU, the
Greens and the liberal yet eurosceptic
Free Democrats (FDP). (This
arrangement, which would be a first,
has been dubbed the ‘Jamaica
coalition’ on account of the colours of
the constituent parties.)
One of the first to adjust to this new
reality was Emmanuel Macron.Two
days after the election, the French
President gave a speech in which he
spelt out his vision for overhauling and
reviving the European Union. Ahead of
the speech there had been much talk
of how it was to be a moment for
rebooting the fabled Franco-German
motor, spurring greater integration
and developing plans for a common
eurozone budget and finance minister.
By the time he got up at the Sorbonne
University to deliver the speech, his
words had been carefully toned down
in recognition of the changed situation
in Germany. In particular, Paris fears
that the presence of the more
eurosceptic FDP will thwart the
President’s plans.
Another immediate consequence,
which will be felt across Europe, is the
departure ofWolfgang Schäuble from
the finance ministry, where he
presided with hawkish sway for eight
THE INVESTOR
|
05
GERMAN FEDERAL ELECTIONS
J
ust wait until after the
German elections’ has been
one of the familiar expressions
of hope of 2017. Once voters
in Europe’s most populous
and economically powerful
country
1
had dealt with the business
of electing a new government, many
benefits would follow.The vexed
negotiations over Brexit would
become easier; the next great step
towards reform of the European
Union could be taken; the eurozone
fixed; and a counterpoint to a newly
introspective America established. And
so on. Armed with a fresh mandate,
Chancellor Angela Merkel would be
able to turn her attention to finding
practical solutions to the most
pressing issues facing the continent.
It did not quite turn out that way.
Merkel did indeed secure a fourth
term in the Chancellery – putting
her on a par with Konrad Adenauer
and Helmut Kohl, two of the defining
leaders of post-1945 Germany. But
not in the way that she or her Christian
Democratic party (CDU) had hoped.
The Chancellor emerged weakened,
as support for the centre-right party
and its Bavarian sister, the Christian
Social Union (CSU), fell by more
than 8 percentage points.The vote
for the Social Democrats (SPD),
junior partners in Merkel’s outgoing
grand coalition government, also
fell, taking the party to 20%, its
lowest result ever
2
. Meanwhile,
much attention – and concern – was
directed at the strong showing for
the far-right Alternative für
Deutschland (AfD), which won 12.6%
of the vote, securing it 94 seats in the
new Bundestag.
The result means that, for the
foreseeable future, any great
expectations of change emanating
from Berlin must be put on hold
while Merkel works on forming a new
government.With the SPD committed
Paris fears that the
more eurosceptic
FDPwill thwart the
President’s plans
‘