Friday 20 October 2017

Angela Merkel in talks to form new coalition but warns no change on austerity

German Chancellor and leader of Christian Democratic Union (CDU) Angela Merkel receives flowers today
German Chancellor and leader of Christian Democratic Union (CDU) Angela Merkel receives flowers today

Germany's Angela Merkel began trying to persuade her centre-left rivals to keep her in power today after her conservatives notched up their best election result in more than two decades but fell short of an absolute majority.

 

Even the chancellor's political foes acknowledged she was the big winner of the first German vote since the euro crisis began in 2010, which thrust the pastor's daughter from East Germany into the role of Europe's dominant leader.

But despite leading her conservatives to their best result since 1990, with 41.5pc of votes putting them five seats short of the first absolute majority in parliament in over half a century, 59-year-old Merkel had little time to celebrate.

"We are, of course, open for talks and I have already had initial contact with the SPD (Social Democratic Party) chairman, who said the SPD must first hold a meeting of its leaders on Friday," Merkel told a news conference, adding that she did not rule out talks with other potential coalition partners.

Attention in Ireland and elsewhere is likely to focus on whether there is any change to Mrs Merkel's policy of aiding struggling European countries in exchange for austerity and reforms.

She said she needs "no need for change" from her conservatives' point of view but she will not anticipate the outcome of coalition talks.

Minister for Jobs, Enterprise and Innovation Richard Bruton offered congratulations to Merkel on today’s political win and noted that her success could mean “positive things for Ireland”.

“Enda Kenny and the government has built quite a good relationship with Angela Merkel and we can expect to build on that,” he said.

“At critical moments she has been a very important ally in delivering the sort of renegotiated deals that we have secured over the last number of years. The solid performance of Ireland in delivering all of the targets that have been set  - that gives us the credibility from a German point of view.”

Merkel’s SPD arch-rivals are plainly preparing to play hardball in any talks on repeating the 'grand coalition' led by Merkel from 2005-2009, which worked well for Merkel in her first term but cost the SPD millions of leftist votes.

"It will be an extremely long road," said Ralf Stegner, head of the left wing of the SPD which has major reservations about becoming junior partners again to Merkel's Christian Democrats (CDU) and her Bavarian the Christian Social Union (CSU) allies.

The 150-year-old SPD may have finished a poor second with their second-worst post-war result, but they know Merkel has to come knocking after her current centre-right coalition partners, the Free Democrats (FDP), failed to get back into parliament.

One SPD leader, speaking on condition of anonymity, half-joked that it would have been better if Merkel had got her own slim majority: "That would have been the worst punishment for her - to bear responsibility for everything on her own."

But in German politics, where only one post-war chancellor has won an absolute majority - conservative patriarch Konrad Adenauer, in 1957 - complex coalition-building is par for the course and few politicians build consensus better than Merkel.

Her calm leadership through the euro crisis has reinforced her status as "Mutti" (mother) of the nation, but she counted on the SPD and Greens' support on all the euro zone bailout votes.

Polls show a majority of German voters would like another 'grand coalition', as do many of Germany's partners in the euro currency area, who expect the SPD to soften Merkel's austerity-focused approach to struggling euro zone states like Greece.

The euro inched up and German government bond futures rose early today as investors anticipated continuity in Berlin's cautious approach to the crisis. But continuity may come at a high price for Merkel, in terms of cabinet posts and policies.

In the campaign, the SPD argued for a legal minimum wage and higher taxes on the rich. It may demand the finance ministry, pushing out respected 71-year-old incumbent Wolfgang Schaeuble, or insist on key posts like the foreign or labour ministries.

"There will be no quick formation of a government," said an SPD insider. "The party will try to drive up the price."

After an election that gave a slim numerical majority to the leftist opposition, the SPD and Greens may even feel pressure to review a historical taboo against allying with the Left Party, heirs to the communists who built the Berlin Wall and still inspire distrust beyond their steady 8.5pc of votes.

If Merkel and SPD chairman Sigmar Gabriel fail to agree on a coalition - and there is no love lost between them since the SPD chairman leaked a confidential text message from Merkel to the media - she could switch her focus to the Greens.

Many progressive CDU supporters favour a so-called "Black-Green" (black is the CDU's official colour) alliance and think Katrin Goering-Eckardt, a 47-year-old Greens leader from east Germany who is close to the Lutheran church, is a snug fit.

But the CDU's conservative wing, embodied by tough-talking parliamentary leader Volker Kauder, dislike the pacifist and ecologist party which campaigned for tax hikes on the wealthy.

"The tax orgy that the Greens have proposed makes it very difficult with them," said Kauder. "It's not the first time that we are heading for a 'grand coalition'," he said.

The Greens, disappointed with their 8.4pc result, may be wary of forming an alliance with a chancellor who bestows the kiss of death on her coalition allies.

In 2009, the SPD's reward for collaboration was their worst post-war election result. The Free Democrats replaced them in government only to crash out of parliament four years later.

"Maybe we won't find anyone who wants to do anything with us," said Merkel with a smile on Sunday night.

That would force her to form a minority government - very unlikely - or President Joachim Gauck would have to call a new election. No post-war government ever had to do that straight after winning, especially one with such a strong mandate.

For now, Merkel is one of few European leaders to survive the debt crisis, which has seen 19 of her peers lose their jobs.

She also saw off a challenge from the Alternative for Germany, a new eurosceptic party that had threatened to break into parliament.

 

Reuters

Editors Choice

Also in World News