When we started running our mini-series of updates on the German federal election and entitled some of our articles “A New Reality in Germany”, we (like pretty much everybody else) had little idea of how “new” this reality would actually turn out to be.

Late on Sunday, the post-election exploratory talks to form a so-called “Jamaica” coalition between the CDU, the CSU, the FDP, and the Green party (Jamaica being a reference to the parties’ colors) collapsed — to the surprise of most observers. The pro-business liberal FDP pulled out of the talks shortly before midnight pointing to a “lack of trust” among the parties even after four weeks of talking and stating that “it is better not to govern than to govern insincerely”.

Uncharted territory

This has created a situation that the Federal Republic has not experienced since its founding in 1949 and it is quite unclear what will happen next.

As a reminder: Immediately after the results of the 24 September election had come in, the Social Democrats (SPD) rejected any consideration of renewing the so-called “grand coalition” for fear of losing ever more voter support as the perceived perpetual junior partner of Angela Merkel’s CDU/CSU. After Sunday’s breakdown of the Jamaica coalition talks, the SPD repeated its rejection of a renewal of that coalition (which would enjoy a solid majority in parliament).

Jamaica would have been the only other feasible coalition option. In our earlier pieces we characterized this as “a constellation that has seen, at best, mixed results on the state level, never been tried on the federal level and that promises very tough coalition negotiations and a potentially fragile federal government”. As it turns out, it didn’t even get to that point.

Quo vadis?

  • So here’s our take on what is most likely to happen next:
  • For the time being, the acting government (by and large the ministers of the old CDU/CSU & SPD coalition) remains in place.
  • German president Frank-Walter Steinmeier (the former foreign minister and now the official head of state) suddenly moves to center stage, as he is the ultimate decision maker regarding the option of a re-election. Ms. Merkel notified Steinmeier on Monday that the coalition talks were not successful. Steinmeier is currently in the process of holding talks with the other parties’ leaders.
  • The German constitution requires that parliament has to at least try to elect a chancellor and it defines significant hurdles for calling new elections. Steinmeier has already made it clear that he will not make such a call lightly, and admonished political parties not to “duck out” at a time when political responsibility is in their hands.
  • The last regular sessions of parliament in 2017 are scheduled for the weeks commencing 27 November and 11 December. Votes could take place during those weeks (but don’t have to). On the basis of what we know today, Ms. Merkel would not get 50+%. In that case, a minority government led by Angela Merkel’s CDU/CSU is an option. However, this is widely seen as unlikely, as it is very unpopular among political decision makers, goes against pretty much everybody’s idea of “stable government” and the Federal Republic — unlike many other European countries — has no tradition of and experience with minority governments.
  • In such a situation Steinmeier could announce a re-election. It is unclear, however, when such an announcement would be likely; only few observers believe it will happen fast. The next election would need to take place within 60 days after such an announcement. Rumors already abound and point to April 22, 2018 as a potential date.

Further upheaval?

In the meantime, internal shifts within the parties could trigger unforeseen developments. Whilst SPD chairman Martin Schulz has staunchly ruled out another grand coalition, for example, it is far from certain what will happen during his party’s conference in December. A change of leadership following the all-time low election results of September could entail a change in strategy. Could this result in the SPD reconsidering and endorsing a coalition with the CDU/CSU after all? Unlikely from today’s vantage point, but nothing should be excluded categorically at this point.

In parallel, the CSU, Angela Merkel’s Bavarian sister party, is undergoing its own leadership crisis with party head Horst Seehofer suffering heavy attacks from within the party’s leadership circle. Outcome unknown.
And who says Angela Merkel’s position is eternally secured? She has stated that she continues to seek re-election and no compelling alternative is currently in sight. However, one should not forget that the election on 24 September has widely been seen as a disaster for the chancellor and many pundits have started philosophizing about the beginning of the end of her reign.

This series to be continued …

Thomas Wimmer, Managing Director, Corporate & Public Affairs
[email protected]