The curse of Merkel

Angela Merkel's CDU has had an amazing night. Current projections have the CDU/CSU just short of an absolute majority - unheard of in modern German national politics. She remains German chancellor and the 8%+ increase in the Union's vote is a clear vote of confidence.

That said, Merkel's current and favoured coalition partner crashed out of parliament - the FPD's worst ever performance. 

If Merkel's Union is unable to manage an absolute majority, the next week will be dominated by behind the scenes negotiations and dealmaking to form a functioning coalition government. Both the SPD and Greens, possible coalition partners, had a disappointing night and could serve as junior partners to Merkel over the next parliament. 

But after a 2009 election result that saw the then-junior coalition partner SPD score their worst post-war result followed by today's similar result for the FDP - no party can be blamed for having reservations to join a third Merkel government. 

The German Elections: 5 Possible Outcomes

Not a great deal has changed in the run up to September's federal elections. Angela Merkel's personal popularity is holding strong, where as the SPD and FDP continue to languish. Almost all signs point towards a Merkel-led conservative victory. Let's look at a few possible outcomes:

Union + FDP - the status quo
If the free-market liberal FDP achieve a 5% vote share - the minimum necessary to be represented in the Bundestag - it's likely that the current coalition will continue to govern. Recent polling puts them just short of survival, but - as happened in Lower Saxony - CDU supporters are likely to vote tactically to push the FDP over the edge.

Union + SPD - the grand coalition
Should the FDP not make it, the most likely outcome is a repeat of the 2005 election: a grand coalition between social democrat SPD and CDU/CSU. Of course, the SPD suffered a substantial voter backlash the last time it entered a Merkel government as junior partner - there are plenty in the party who would argue against joining a Merkel cabinet. Peer Steinbrück, the SPD's candidate for chancellor stated he would not lead the SPD into such a coalition - but the party's poor performance makes his continuing leadership unlikely, whatever the outcome.

Union + Green - the outside chance
This one is likely only a mathematical possibility - but not without precedent (see Hamburg state elections, 2008). Merkel and the CDU seem open to the idea - but the leadership of the Greens have done (nearly) all they can to pour cold water on the idea. They openly campaign for a SPD-led government and a coalition with the CDU would be deeply unpopular with their core supporters. Of course, one should never underestimate the attraction to power, should the opportunity come...

SPD + Green + Left or FDP - the fantasies
Not only do the poll numbers make these combinations a mathematical long shot, but the SPD/Greens lack a good working relationship with the FDP or the former communist Left. If there were to be a concerted 'anyone but Merkel' campaign immediately after the election, one or the other could form an alliance - but her popularity makes this highly unlikely. 

SPD + Green - the opposition victory
The polls show this combination falling short by a wide margin. Of course, there is a while to go before the polls open on September 22nd - the Japanese Tsunami and Fukushima meltdown nearly doubled the Green's poll numbers overnight. But save for a political earthquake, this outcome is the least likely of the lot.

Peer Steinbrück: A Profile

The next Chancellor of Germany?

Peer Steinbrück first came to national prominence in 2002, as Prime Minister in the (once) solidly Social Democratic North Rhine Westphalia (NRW) and later as a minister Angela Merkel’s Grand Coalition – Germany’s finance minister as the financial world lurched into its current state of perpetual crisis. Steinbrück is a sometime bellicose man who often speaks his mind, even if it gets him into trouble.

His story started in Hamburg in 1947, the great-great nephew of one of Deutsche Bank’s co-founders. Despite this heritage, few who knew him in his early years would have expected him to be a serious contender for the most powerful office in Germany: he was a spectacularly poor performer at school. On no less than two occasions, he was forced to repeat a year due to poor grades.

He went on to study economics in Kiel, making up for his poor school performance by graduating in just 4 years (German degrees took an age – until recently, it was not unusual for undergraduates to study all the way into their thirties).

28 years later, with a successful career spread across the civil service, the SPD and the cabinet of two German states behind him, he became Prime Minister of North Rhine Westphalia, selected by his party after his predecessor moved onto bigger things.

Steinbrück’s first electoral test could have gone better...

Having closely aligned himself with Gerhard Schroder on the right of the party, he led the SPD in NRW to a bitter defeat – the loss of a social democrat heartland even brought down the federal government. This electoral rout, however, brought Steinbrück firmly onto the national stage: Angela Merkel appointed him as Finance Minister in her CDU/CSU/SPD grand coalition government.

Then the crisis started.

While Germany itself steered clear of much of the economic chaos that beset the rest of the developed world, Steinbrück managed to make an enemy of the normally neutral Swiss. His attacks on banking secrecy and accusations that Switzerland is a tax haven led to a minor diplomatic incident: the German ambassador was summoned to explain Steinbrück’s statements. Closer to home, his comparison of the choice to either remain in opposition to the CDU or share power with left-wing Die Linke in a regional election to ‘Cholera or Plague’ also raised eyebrows within his own party.

He could be considered somewhat accident-prone.

Steinbrück, like the rest of the SPD moved into opposition after the 2009 elections removed Merkel’s reliance on the SPD to govern. He kept up his profile and attacks on big banks – and, once his two main competitors had bowed out, became the SPD’s candidate for chancellor.

Despite having seemingly placated the left wing of his party, his campaign has hardly gotten off on the right foot. Revelations relating to his extra-curricular activities – after dinner speeches for estimated 5 figure sums – will do him no favours in the SPD heartlands.

Despite the missteps, the SPD’s poll numbers have risen to a 6-year high following his coronation as candidate. Time will tell if the German people view this bellicose but passionate man as a real alternative to Merkel’s clam, collected but staid style: there is, after all, a year to go before the next federal elections.

Merkel’s personal numbers are good – but the CDU/CSU is increasingly unloved. If the SPD gains at the expense of the CDU, it will likely be in spite of their leaders.

Germany’s next top minister?

The battle lines are drawn, the gauntlet has been thrown.

The hackneyed phrase generator has gone into overdrive.

The scene has been set for a clash of two of Germany’s political heavyweights (in every sense of the word). In the blue (but mostly black) corner, Angela Merkel, the reigning champion and Chancellor; in the red (with a little bit of green) corner, Peer Steinbrück, the upstart challenger who has already taken down a Chancellor – albeit one from his own side. The bout will take place next year – September or October 2013 – and it promises to be... well, very sensible and German. She’s got the edge in the polls, but a year is a very, very long time in politics.

Stay tuned for the Rumble Near The Rhine.