No Winner, But a Number of Messages
By Sascha Müller-Kraenner

Last Sunday's elections in Germany might not have produced a winner, but they have produced results. The Red-Green government has lost its majority, Merkel's "it's the economy only" approach to societal reform has been rejected and traditional coalition patterns are being shaken up.

Germany's governing coalition of Social Democrats and Greens has failed the task of reforming Germany's economy and social system. Some important steps, like introducing private saving schemes into the pension system or making the labor market more flexible, were taken. However, the two main problems of Germany's economy remain: eastern Germany still has not developed a self-sustaining economic basis, and unemployment remains at a record high.

However, Merkel's proposal to trigger an economic revival with business tax cuts, privatizing parts of the social security system, and broad deregulation of social and environmental standards, has failed to convince the voters. Most German voters obviously neither like the medicine nor think that it will work. It would be wrong to conclude that Germans have not yet suffered enough to accept "the necessary reforms." Voters just seriously doubt that a reform package that only addresses macroeconomic factors and ignores a broader social agenda would produce any satisfying results.

In the coming weeks or months, the Christian Democratic Union can be expected to do a lot of soul-searching. In 2002, the CDU lost because their candidate for the federal chancellorship, Edmund Stoiber, had not realized how profoundly the Red-Green social, liberal and environmental agenda had transformed the self perception of the German citizenry. Schröder was featured as "a modern chancellor for a modern country." This is what people wanted to hear. Stoiber promised the way back to the good old times. Most voters did not agree that these times had been that good at all. In 2005 however, Merkel tried to embrace a more modern image. The duo of Merkel and Westerwelle in itself, a woman and a gay man at the top of the ticket, symbolized a more modern conservatism. Merkel therefore did not lose on the "value question" but on her unconvincing economic platform. What people missed was a stronger emphasis on a number of seemingly weak, but still important, factors in her economic reform package. Just to give some examples: flexible working hours, especially for women with children; a stronger emphasis on day care, after school programs and more money for higher education; and the economic potential of environmental technologies like Germany's booming wind farms.

Now that the voters have spoken, Germany's politicians face a puzzling multitude of possibilities to form a working government coalition. The most likely options are either a "grand coalition" of Social Democrats and Christian Democrats, an extension of the current Red-Green government to include the market-liberal Free Democratic Party (as their color is yellow, this would be dubbed a "traffic light coalition") or the totally novel idea of a "Jamaica coalition" (Christian Democrats + Free Democrats + Greens, resembling the colors of the Jamaican flag). Whatever the outcome of this big poker game may be, the traditional party system of Germany has been fundamentally shaken up. For the first time since 1949, neither the Center-Right nor the Center-Left can form a majority alone. On the other hand, all parties have gained additional flexibility and a number of new strategic options. The Free Democrats have to assess their traditional loyalty to the conservative Christian Democrats and to rediscover their more liberal and civil rights traditions. For the first time in history, Christian Democrats and Greens will seriously talk - not only about what separates them but what might bring them together. Protecting the environment can be defined as a conservative issue. On the economy, the Greens have acquired an image as the "fiscally conservative" part and the "reform motor" of the current government. Even if a Black-Green coalition with support by the Free Democrats cannot be hammered out and traditional contradictions on issues like immigration, and civil rights prevail, this constellation might become a real possibility for the future development of both parties.

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Sascha Müller-Kraenner is Director for Europe and North America at the Heinrich Böll Foundation, which is associated with Germany's Green Party. He is also a 2005 Yale World Fellow and a frequent participant in AICGS events.
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This essay appeared in the September 30, 2005 AICGS Advisor.