Europe and Germany’s coalition of losers

The talks between Germany’s Christian Democrats (the CDU/CSU) and Social Democrats (the SPD) have ended in an agreement that will create a coalition of the biggest losers of last September’s federal elections. The parties’ rank-and-file members must still approve the deal. For Chancellor Angela Merkel and SPD leader Martin Schulz, the coalition is the only option to keep their political careers alive.

On the evening of the election, the SPD said it would go into opposition, while Angela Merkel declared herself the winner. She deluded herself into believing that her governments’ actions had somehow received a seal of approval, ignoring the failures that had led to the CDU/CSU losing more than one-fifth of its voters.

No Jamaica coalition

With the SPD, her previous grand-coalition partners, deciding to enter opposition, Chancellor Merkel (with the support of President Frank-Walter Steinmeier) tried to form a “Jamaica coalition.” The strange political hybrid of the CDU, its Bavarian sister party the CSU, the Greens and the liberal Free Democratic Party (FDP) was so called since the parties’ colors (black, green and yellow, respectively) corresponded to those of Jamaica’s flag.

The resulting government would have had a very socialist bent, with the Greens and the CDU’s left wing dominating. Fortunately, the FDP pulled the plug on the talks, not wanting to associate itself with a rather authoritarian, left-wing government that would have worked for a planned economy. This is very much to the credit of the FDP’s leadership.

To avoid new elections and further losses, the two losers – again very much supported by the president – decided to try a coalition once more.

Avoiding the real problems

Germany’s political parties, with the exception of some personalities in Bavaria’s CSU, the FDP and the sometimes brash protest party Alternative for Germany (AfD), avoid mentioning the country’s real problems. They prattle on about the dangers of globalization, inequality, hate speech on the internet, the nasty British and the so-called “illiberal democracies” in Hungary and Poland. They refuse to address the basic issues of immigration aside from quotas: crime committed by foreigners, the loss of family values and the fact that Germany’s Christian identity is under threat.

They pontificate on the economy, which is doing well now, but ignore substantial threats, especially the country’s sovereign debt, which has not been calculated properly. If pension obligations are added in, Germany has a total debt equal to some 400 percent of its gross domestic product. That many other eurozone countries have debt problems of comparable size does not improve the situation.

If this coalition comes to life, we cannot expect that any of Germany’s most urgent problems will be addressed, because its major players are convinced that they have been doing a wonderful job. Chancellor Merkel called the initial agreement a “fresh start” for Germany, which begs the question as to why one is needed after her last 12 years in power. It is difficult to believe that this coalition, if it comes about, will be strong. It looks like a recipe for further populist expediency, more socialism and technocratic centralization.

In summary, we wonder why the only solutions seem to be this weak coalition or the dreaded new elections. One can also wonder why Angela Merkel and Martin Schulz did not resign after their crushing defeats. It might be that Chancellor Merkel has become the only person in her party who can lead – a very negative sign for Germany’s Christian Democrats.

Unfortunately, former Finance Minister Wolfgang Schauble left office in October. He was the bulwark against eurozone overspending. The new coalition is likely to be open to French calls for stronger European Union centralization and sharing sovereign debt within the eurozone. This “unionization” of debt would oblige countries like Germany to pay for the oversized deficits of countries like France, Greece and Italy. Both proposals will weaken Europe’s economy in the long term and have all the ingredients necessary to break the EU’s already fragile cohesion.

Read the original article here ->
Coalition of Losers

*GIS is a global intelligence service providing independent, analytical, fact-based reports from a team of experts around the world. We also provide bespoke geopolitical consultancy services to businesses to support their international investment decisions. Our clients have access to expert insights in the fields of geopolitics, economics, defense, security and energy. Our experts provide scenarios on significant geopolitical events and trends. They use their knowledge to analyze the big picture and provide valuable recommendations of what is likely to happen next, in a way which informs long-term decision-making. Our experts play active roles in top universities, think-tanks, intelligence services, business and as government advisors. They have a unique blend of backgrounds and experience to deliver the narrative and understanding of global developments. They will help you develop a complete understanding of international affairs because they identify the key players, their motivations and what really matters in a changing world. Our experts examine the challenges and opportunities in economies old and new, identify emerging politicians and analyze and appraise new threats in a fast-changing world. They offer new ideas, fresh perspectives and rigorous study.