GroKo: A Coalition for Continuity or Change?
Imagine walking into a hardware store and asking the manager for the most effective fertilizer for a garden or lawn care. “Use GroKo,” he might recommend. “It is an all-purpose formula. Covers everything.”
Short for Große Koalition/Grand Coalition, in this analogy, GroKo is the policy formula forged in the recently completed coalition agreement to govern Germany for the next four years—presumably.
Last week, the three parties, playing political poker for months, finally managed to bring the marathon negotiations to an end. (Read the full Coalition Agreement in German here.) Now, there is one only thing standing in the way of the final act on December 17. The 470,000 members of the Social Democratic Party (SPD) need to approve of the coalition agreement in a referendum—a unique experiment in German political party history.
Yet, assuming that the vote is thumbs up, the government controlling 80 percent of the parliament will start to implement a 184 page coalition agreement covering just about everything in Germany’s political garden.
Despite the scope of its reach, it would be impossible to come up with a coalition platform of this scale that wasn’t going to be a target of some criticism. The Social Democrats and Angela Merkel’s Christian Democratic Union (CDU), along with her sister party, the Bavarian Christian Social Union (CSU), campaigned vigorously against each other in the run up to the September election. Despite the fact that Merkel’s team trounced the SPD, the shotgun marriage was forced on the two opponents by both the electoral results and the general mood of the country. The so-called Grand Coalition was on the agenda—like déjà vu all over again. And, somehow the three parties had to craft some common ground.
The 2005-2009 version of this coalition was judged to have done a fair job, particularly in handling the tough economic storms of 2008/2009. But in 2009, the Social Democrats came out of that experience with the worst election results in their history, and they are wary of a repeat. That is an important factor in winning the upcoming SPD referendum on the coalition this time around.
There was very little shared enthusiasm about a Grand Coalition on either side of the fence at the outset of negotiations, but it was ordained by the absence of viable options and the usual pull of governmental power.
So, after long days and nights of confrontation and compromise, this Grand Coalition or GroKo was forged across a very wide range of policies and promises. Now the question is: how effective will GroKo be in fertilizing the German political landscape? How much of what is intended will actually take root and grow into flowering successes?
First, there are a lot of stubborn, recurring political weeds to deal with: At first sight, the agreement seems to be driven exclusively by domestic considerations, regardless of what Europe needs. The paradox is that the agreement could end up representing a rare convergence of German and European priorities, in spite of what early critics say.
Initial struggles were found in the trade-off between spending and taxes. Although the agreement approved new spending on pensions, education, and infrastructure, Merkel was not offering much leeway for raising taxes to offset those expenditures. That could be a fiscal problem down the road, but will be welcome news in all those countries that urge Germany to rebalance its economy by boosting domestic spending.
There was a consensus on a national minimum wage of €8.50 per hour starting in 2015, but that generated huge pushback among employers, charging that this would lead to higher unemployment. However, for weaker European countries, any move that can strengthen domestic consumption is welcome news, as it could lead to stronger demand for imported goods. Then, there is the new wrinkle to permit retirement at age sixty-three instead of sixty-seven, which stands in contradiction to Merkel’s earlier critique of France for its reduction in retirement age and her previous efforts to raise the retirement age in her first Grand Coalition with the SPD. Will this move make it easier for other European countries to implement painful structural reforms? Probably not. However, the subtler message to Europeans is: painful reforms can be partially reversed if general economic conditions improve.
So, the conservatives kept their promise not to raise taxes. The SPD agreed to the controversial toll on cars and got the minimum wage and pension policies they desired. Everyone wins—or so it seems.
Indeed, by allowing some of these arrangements to be made, both sides of the coalition are assuming they can placate their respective constituencies and the SPD can win the member vote in two weeks that its leaders need in completing the coalition.
The coalition agreement also added another new change: dual citizenship for children of immigrants born in Germany, an option that would impact thousands of young people of Turkish descent, and whose parents, who can vote, tend to support the Social Democrats. That was not an easy concession, but it made it into the package.
With regard to Europe, the agreement steers a path of continuity whether it be the issue of banking reforms or debt and deficit rules within the current structure of the EU. There as not much indication that a lot of German attitudes or policies would change toward the EU under the new coalition. Caution reigns with regard to further bail outs and there are limits to what Berlin will allow the EU to do with German banks. In fact, the coalition agreement complains that the EU has intruded too far into daily German lives at the cost of its effectiveness. Nevertheless, the coalition says that Germany should exert leadership in forging a stronger EU. How that gets orchestrated will be the story of the next four years.
The fact that Chancellor Merkel will have a super majority both in the Bundestag and the upper chamber, the Bundesrat, offers political running space to deal with the expected and unexpected challenges ahead for the a euro zone still in trouble and an EU still struggling the years to come.
Finally, with regard to foreign policy, which played very little role in the election campaign, admonitions about the importance of transatlantic relations are clearly set out in the agreement—albeit with a request to Washington to get its act together on the NSA and surveillance issues.
Though the agreement intends to strengthen and retain control of domestic programs, Berlin wants a European “cyber security” strategy. With the appointment of a “cyber czar” and a pending understanding with the United States, they are moving toward taking a more assertive role in shaping how Europe deals with the digital age.
It also underlines the importance of getting the Transatlantic Trade and Investment Partnership (TTIP) implemented. Further commitments to strengthening the German and the European role on the world stage appear across a number of regions and areas of concern. There is an elaborate emphasis on the importance of relations with Russia and on Germany’s engagement in a number of hot spot areas such as Afghanistan, Kosovo, and the Middle East.
How all these intentions are to be realized is open to question. Yet, the majority of Germans are in general disposed to believe that this coalition is what they need right now. This is the third time Germany will be governed by such a coalition in the history of the Federal Republic, as well as the third term for Chancellor Merkel.
As Head Gardener, she will be in charge of using GroKo. It may take some time before we see what takes root. GroKo might be an all purpose prescription, but it might be a while before we can see if it can make Germany – and Europe – grow.