For the first time, Germany went into an election with a serving Chancellor not being a candidate. The absence of Angela Merkel led to anticipation of change. The results show, at best, change with a small c.
Notable is the fact that there are no clear winners. The SPD, the Greens and the FDP have increased their vote share since 2017, but none of them is a clear winner. The SPD would have been better placed had it scored about 32 percent of the vote instead of 25.7 percent.
The Greens have doubled their vote share from 2017 to about 15%, but it is far less than the 25% target they had set to become a major factor, if not the leader of the new government. The CDU had its worst showing since WWII. It has outdone its dismal performance of 2017 when it received 32% of the votes, by now falling to under 25%. But – don’t write them off. With a 10-seat deficit to the SPD, they remain in contention for a coalition.
The German system is a mix of direct elections and proportional representation, but then has bridging and overhang seats which vastly enlarge the 598 seat Bundestag. In 2017 due to fractured voting among a larger number of parties, the overhang seats increased and the Bundestag had 709 seats. Now the Bundestag has about 735 seats. Due to this, the majority mark has moved to 368, from the conventional 300. The AfD, Left and other parties have a 23.9% vote share, getting them 123 seats.
Given that none of the parties are close to the 368 mark by themselves, a three-way coalition is now a necessity for the first time. This could be the largest Bundestag ever. Coalitions are a German habit, due to the electoral system. Unless a party gets 35% to 40% of the vote, it has a weak hand with coalition partners. In 2017, the CDU tried very hard to negotiate with the FDP and the Greens. The negotiations failed, leading to, once again, a grand coalition between the CDU and the SPD. For three out of four terms of Angela Merkel from 2005, three have been grand coalitions with the SPD, and one with the FDP. The last time the Greens were in power was in coalition with the SPD in 1998 with a 5% vote share.
Both the leading parties are staking a claim to lead the government, but are now sitting quietly. The real kingmakers are the inadequately resurgent Greens, and the free-market FDP, which together command more than 25% of the vote, and about 210 seats in the Bundestag. Whichever of the centrist parties they align with will be able to form the government.
The crucial matter now is how the Greens and the FDP will resolve their own contradictions. All eyes are on them to be more responsible and reasonable in their ambitions. They are expected to align with the SPD, because the interpretation of the results is a vote for change, away from the CDU. The SPD itself is joyous, that it has unshackled itself from being a junior partner of the CDU. However, that decision lies with the FDP and the Greens. The last resort will be an SPD-led grand coalition with the CDU, though presently this is not a preferable option.
The Left Party, which inherits the political legacy of the GDR in the eastern German states, is at the fringe and barely made it to Parliament. The left-wing of the SPD was hoping for a better Left performance, and include them as a third party with the Greens in a coalition. This is now unlikely.
The right-wing, AfD has a reduced vote share by 2.3 percent. 14% of its 2017 voters abstained now. Young voters who are educated, prefer the FDPs liberal economic policies and the Green social agenda. This has led to a surge in the Green vote, but older voters still prefer the CDU or the SPD. In Germany, unlike India and other emerging economies, young voters are barely 30% of the electoral list; older voters are over 50% and dominant. One-third, or 30% of first-time voters, abstained!
German business is anxious about the possibility of an SPD-led government, a lurch towards socialism, and the probability of the Greens coming into governance in important roles. The Federation of German Industry (BDI), which normally is reticent about parties, had twice come out with critiques of the Green platform. They cautioned against focusing too much on their version of a planned economy and the various prohibitions and quotas that the Greens advocated. They see the Green platform as distrusting of market mechanisms.
It is these issues that bring the Greens into contradiction with the FDP, which stands for both big and Mittlestand business in Germany. While the Greens proclaim a climate-friendly agenda, the FDP has the least climate-friendly agenda of all parties in Germany.
As the election polls showed a lurch to the left, rich Germans have apparently shifted their funds into Switzerland, apprehensive of higher taxation. Therefore, an SPD and Green government will need to be managed by the smallest partner, the FDP, to keep German business engaged.
Though the climate agenda is much talked about in Germany, the reality is that Merkel, known as the Climate Chancellor, did not do much for it in Germany. Energy transition has remained slow as the BDI has pointed out. The Greens, who are the champions of the climate agenda, got a mere 15% of the vote, which allows them to be a part of governance, but not a determinant. Therefore, the climate factor in German politics seems important but is not the only factor to the exclusion of others. At present, given the impact of the pandemic, and the economic slowdown, older Germans and businessmen prefer economic incentives and regularisation rather than regulation and higher taxation or diversion into ideological positions.
In effect, they want a Merkelianer leader who can carry both, public commitment with practical policy.
Gurjit Singh is Former Ambassador of India to Germany, Current Chair of the CII Task Force on Asia-Africa Growth Corridor and Professor at the IIT, Indore.
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