Europe's mighty giant reels

Germany's government crisis is grave. Struggling to stave off an untimely political demise, Angela Merkel is desperately seeking a coalition partner. An analysis follows.

A popular German caricaturist recently captured the gist of Germany's political situation with a wit as sharp as his pencil. The cartoon depicted CDU, CSU and SPD leaders Angela Merkel, Horst Seehofer and Martin Schulz sitting in a row, their panic-stricken faces aghast as the legs of their chairs splinter like so many matchsticks. The caption reads, "There is much in common." This was no tongue-in-cheek comment on their shared political ideas; it was an accurate description of the three chairpersons' precarious position in the wake of the Bundestag elections. All three incumbent parties suffered historic losses in September. Now all hopes of overcoming Germany's government crisis rest on the very parties that voters saw fit to punish by denying them a mandate. Europe's mighty giant is reeling—there has never been a domestic political situation as daunting as this in the history of the Federal Republic of Germany.

On the evening of the election, the SPD had categorically refused to talk about keeping the ruling coalition alive. It takes a Bundestag majority to elect the German chancellor, so Merkel needs the votes of at least one coalition partner to remain in power. The first bid to form a new government ended with a bang, not a whimper, on November 19th. Chancellor Angela Merkel spent five weeks haggling with the FDP and the Greens over the modalities of an alliance with the CDU/CSU. The parties had looked to be on the verge of coming to terms. But things took a surprising twist when the business-friendly FDP folded, quitting the poker table just before the final hand was played out. FDP chairman Christian Lindner said, "It's better not to govern at all than to govern wrongly," leaving Merkel to sort out the shambles.

What’s next for Berlin?

Three options remain after the first exploratory talks ended in a fiasco. One is the incumbent 'grand' coalition of CDU, CSU and SPD. The other is an unprecedented minority government led by a chancellor who will be forced to seek a parliamentary majority for every political decision. The final option—snap elections—is a last resort, but it may yet come to pass. The first alternative is now being pursued in exploratory talks with the social democrats. The SPD turned on its heel at the vigorous urging of Federal President Frank-Walter Steinmeier and is now putting talks with the CDU and CSU to a vote.

This leaves the SPD in a bit of a pickle. Its about-face at Steinmeier's insistence has incurred harsh criticism from many supporters. Party chair Martin Schulz's standing has since crumbled. While Merkel remains on relatively firm footing, his position is so weak now that the media are speculating his ground support may soon give out. Then again, the social democrats could be the queen-makers in this play. Well aware of their role, they are already starting to clamour for far-reaching concessions and billions in commitments, especially to fund welfare-minded social policies. Trade associations have issued dire warnings against misguided decisions that undermine economic growth and will eventually cost many jobs. The pressure is piling up; the current chancellor is feeling the squeeze. Citizens are impatient for her to form a government tout de suite, but her supporters are reluctant to grant the social democrats much in the way of concessions. Merkel is caught in an existential bind that leaves little wriggle room. But all is not lost—at least not yet.

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