The German Elections: Implications
By Marten van Heuven

The dust is finally settling on the recent German elections. The immediate reaction was that the outcome would lend confusion to the political dynamics of Europe (1). Now, Europe is getting used to the surprising outcome, in which Chancellor Schröder came within a hair of scoring a huge upset against Angela Merkel, who had been expected to win handily. After weeks of uncertainty, Ms. Merkel has emerged as the next chancellor; the government will be a grand coalition of Social and Christian Democrats and veteran political figures Joschka Fisher and Gerhard Schröder will not be part of the next government, though the future political role of Schröder remains unclear.

These events have caused a flood of commentary, spanning a wide register. "Germany fudged," proclaimed commentator Roger Cohen (2). A Swiss bank concluded dryly that "the economic effects, in particular the prospect of slower implementation of necessary reforms, could, at a subsequent point in time, further weaken the economic potential of Germany" (3). Other commentary was more direct: Merkel's failure to win her own majority and thus to govern on her own was seen by many German businessmen and other Germans as a "missed opportunity of historic dimensions" (4). Analyst Ulrike Guerot at The German Marshall Fund of the United States in Berlin was quoted as saying bluntly: "If it's a grand coalition, it will mean pure stagnation" (5). Not all commentary was negative, however. The executive director of the American Institute of Contemporary German Studies at the Johns Hopkins University, Jackson Janes, took a more cheerful view: "This is not a crisis, it is an opportunity" (6).

It may be too early to fully appreciate the impact of the German elections. Nonetheless, this preliminary assessment focuses on three issues: The effect on German politics, economic and social welfare reform, and foreign policy. The bottom line on all three issues is that we are seeing change that indicates new and positive trends.

In politics, voter attention continues to gravitate away from political parties and programs and toward individual candidates. This was a battle not so much between SPD/Greens and CDU/CSU as much as between "Angie" and Gerhard. This should not be cause for surprise; German politics in this respect is catching up with patterns in major western countries. But this trend adds volatility to the German political landscape. Too much of this could be undesirable in a country that is the weathervane of Europe. It also adds to the potential for political radicalization in the margins (7). The election results did little to dispel continuing differences in outlook between what used to be East Germany and the erstwhile western Federal Republic. The fact that Ms. Merkel came from the East (though with West German roots) does not appear to be an element drawing these two parts of Germany together. The respective footholds of the key political parties in eastern and western Germany remain markedly different, and these parties do not offer a natural home to significant groups (8). So German unification remains unfinished domestic political business and the established political parties will continue to be looking for the golden key that will unlock their hope for continued relevance on a national scale. Finally, the process that produced the grand coalition was opaque and invisible to the voters, given that it took place in the privacy of the Parliamentary Club. Impenetrable processes that produce candidates may be found in all democratic countries - the selection of vice presidential candidates in the United States comes to mind. But with so much at stake, the German voter may experience a sense of exclusion from a political process that will likely affect his or her pocket book. In the new information age, new forms of political activism outside the sclerotic system of established parties and traditional street demonstrations may lead to more open politics.

Economic and social welfare reforms present a paradox. Leaders of all the governing parties are aware of the need for reform and, albeit reluctantly, agree that something needs to be done. Even Chancellor Schröder touted the so-called Hartz reform proposals in his second term. On the other hand, the electorate has not put real pressure on the new government for reform, preferring the security of the existing labor and social welfare system to what it fears may be something significantly less favorable. Germany will now have a more conservative government faced with the need to persuade an inherently conservative electorate to change its ways. The makeup of the grand coalition will leave only narrow possibilities for progress. Personal rivalries among ministers and among coalition partners could get in the way. SPD leader Franz Müntefering's decision to give up his party chairmanship will weaken his ability to help make the coalition succeed. But there also have been positive developments recently, in particular corporate turnaround, export performance, and the stock market (9). Politicians in the grand coalition know that their political future hangs on positive results. This motivation could constitute the basis for reform. What the new government can achieve will matter not just in Germany, but in all of Europe. "Burdened by huge debts and a stagnant economy, it [Germany] can no longer afford to be the European Union's sugar daddy" (10). A European Union that needs to decide on its own future course will be heavily influenced by the decisions Germans make for themselves in Berlin. Look for a gradual popular acceptance of the notion that German leadership requires labor and welfare reform, as well as a new approach to education.

In foreign policy, there will be changes in substance as well as in style. Both are desirable. Chancellor Schröder insisted on a Germany no longer constrained by the legacy of World War II and that could pursue without reservations its national interests like any normal country. The projection of these interests came with an internal shift in power, from the foreign ministry to the Chancellery. But Schröder's approach turned out to be strident and impulsive. His Gaullist streak upset Germany's neighbors and others. The Dutch government was deeply annoyed by Berlin's disregard of the EU stability and growth pact. Polish authorities were unhappy with Schröder's reaching out to Russian President Vladimir Putin. The Italians could not stomach Germany's insistence on a permanent seat on the United Nations Security Council (UNSC). Washington was offended by Schröder's brusque disagreement on the use of military force in Iraq. Others felt they were seeing not a European Germany - the expressed objective of previous German administrations - but more a drive for a German Europe.

In the view of many experts, including the seasoned Karsten Voigt, long-time coordinator for German American relations in the foreign ministry, the tone of a Merkel government will change but the substance will not be much different (11). In contrast, it is more likely that both tone and substance will be significantly different with Ms. Merkel as chancellor. As to tone, there will be no more sniping at the United States to score domestic political points. The awareness of the Merkel government of the need to adapt the German social welfare system will dampen knee-jerk opposition to the "Anglo-Saxon" model. The realization that, for better or worse, Germany cannot escape its role as the EU leader will have a moderating effect on the Merkel government's conduct of foreign relations.

On substance, we should expect the Schröder government's Gaullist tendencies to make way for a more sophisticated approach based on an appreciation of Germany as a medium-sized power with an aversion to the use of military force but which, as the key country in Europe, nonetheless must play a leadership role. The real consequence of Germany's emergence from the shadows of the Cold War is that it must now - by itself - balance the many conflicting claims made of it. Berlin must develop its relations with France - and also with the United Kingdom - in harmony with its relations with Eastern Europe, with Russia, with the United States, and with lesser neighbors. Hobby-horse objectives - such as a permanent seat on the United Nations Security Council - must be deferred, since there will be no progress until Berlin succeeds in building a European consensus on UNSC enlargement and gets U.S. backing. The absence of both conditions led to the failure of German diplomacy on this issue in New York. It will also take more time to adjust the German public distaste for the use of military force with permanent membership in the one organ of the United Nations that is frequently confronted with the issue of authorizing military action of one sort or another on behalf of the international community. Turkish membership in the EU is another issue that will take time to resolve, both within the German political system as well as within the EU, as accession talks continue. This issue will require a careful balancing of German interests in dealing with a NATO ally vis-à-vis its domestic Muslim population and in Turkey's importance as a stabilizing factor in a volatile region.. This issue will require statecraft and political dexterity of a high order. Other global issues - terrorism, a possible pandemic, and nuclear non-proliferation - will also require instant attention. A Merkel government could set the tone for Europe on all these issues.

Success of the new German government in tackling this agenda is much in America's interest. Despite the highly publicized differences with respect to Iraq, German and American objectives differ but little. Success for the Merkel government will depend on the leadership the new chancellor will offer. The confines of a grand coalition will provide minimal room for maneuvering, but Ms. Merkel has demonstrated tenacity in the face of adversity and coolness under fire. This gives ground for hope that in the areas of politics, economics, and foreign policy, Germany may be turning in the right direction.

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1. "Merkel's setback roils politics in Europe," International Herald Tribune, September 19, 2005, p. 3.

2. "Compromise decision could prove to be costly," International Herald Tribune, September 19, 2005, p. 2.

3. "Investment Strategie," Aargauische Kantonalbank, fourth quarter, 2005.

4. International Herald Tribune, October 12, 2005, p. 1.

5. International Herald Tribune, September 19, 2005, p. 3.

6. AICGS Advisor, September 23, 2005.

7. Axel Gelfert, "How democratic is the new left?," International Herald Tribune, September 3-4, 2005, p. 5).

8. "Liberals in the wilderness," The Economist, August 27, 2005, p. 44.

9. "Germany's surprising economy," The Economist, August 20, 2005, p. 9.

10. "For Europe, the costs of a weak Germany," International Herald Tribune, June 25-26, 2005, p. 1.

11. See Richard Bernstein, "Merkel to follow Schröder's lead," International Herald Tribune, October 14, 2005, p. 8.

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Marten van Heuven is a retired U.S. Foreign Service officer who served in Bonn, Berlin, and at the United Nations. Currently he is a senior consultant at the RAND Corporation and is a frequent contributor to AICGS.
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This essay appeared in the November 4, 2005 AICGS Advisor.