February 8, 2019 By FTI Consulting
Elections to come in 2019
In German politics, anything can happen in 2019. Or nothing at all. Much depends on the outcome of the elections both on national and state level. Beyond the European elections on May 26, these will take place in the states of Bremen, Brandenburg, Saxonia and Thuringia, the latter three all part of the former GDR where voters traditionally are less committed to the established parties. In all three states the populist, xenophobic AfD is way north of 20 per cent in the polls, closing in on the competition, be it from the CDU, SPD, or the Left party which is traditionally strong in Eastern Germany as the legal successor to the old Communist party. Looking at the polls today, none of the current governments in any of the three states has a chance to re-election. The common feature in all three is the strength of the AfD, and the weakness of the SPD.
In national polls, the Greens have surpassed the SPD for months by now, often ranging in the 20 per cent region. This trend might come to end in 2019, as the Green party traditionally has a harder time to succeed in Eastern Germany. Still, their polling results have significantly improved in the region, too, and double-digit results seem well possible.
Merkel on the Way Out
The impact of state elections on national politics in Germany should not be underestimated. For Angela Merkel, it was the bad results of her CDU at the state elections of Hesse in September 2018 that triggered her decision to step down as party leader. As she herself has said, this will be her last term in office, after which she will leave politics altogether. She also expressed a readiness to serve the full term until 2021, but made sure not to claim it in any way. In other words, Merkel is ready to make way for her successor at the party helm, Annegret Kramp-Karrenbauer (nicknamed AKK) when time and circumstances are right.
2019 Economic Outlook & Government Agenda
Germany’s economic outlook for 2019 is sobering. There are strong signs that the period of solid growth rates since 2010 will come to end. The government practically halved its own forecast for 2019 in late January, from 1.8 per cent growth to 1.0 per cent. Yet the governing parties, the Christian Democratic CDU of Chancellor Angela Merkel, and the Social Democratic SPD, remain in a playful mood, teasing and provoking each other with projects going much beyond the coalition agreement. The appetite for structural reforms remains low, however. The consensus is on spending.
Current projects include:
If Merkel were to hand over power to AKK this year, the latter would still need to get a majority in Bundestag in order to take office. It is hard to conceive of the SPD voting AKK into power at present, but without the votes of the SPD, she will not come into office. This leaves her with the options either to try to form another majority in parliament, presently only possible for the CDU together with the Greens and the FDP, or else to form a minority government which has never happened before in post-war German history. Early elections would be a way out of the impasse, but they are hard to reconcile with the German obsession of stability which is particularly present in CDU voters.
Stock-Taking at the Crossroads
Both governing parties also agreed in their coalition contract to conduct a stock-taking of achievements reached by the middle of the term, thus this summer. When the contract was signed in March 2017, many saw this clause as an opportunity for the SPD to leave the CDU-led government and seek another majority in parliament two years later. But with the decline of the SPD continuing, making use of this option would only amount to committing suicide for fear of dying from an SPD perspective.
The Despair of the SPD
SPD party leader Andrea Nahles is no longer seen as an asset within the party. In less than a year at the helm, she has lost all momentum to infuse new life and strength into the party, and is seen from within as being responsible for the major losses of her party at the 2018 state election in Bavaria and Hesse. Finance Minister Olaf Scholz who also holds the informal title of vice chancellor has a better standing with the general population but fails to win support from within the party ranks. In present conditions, the SPD seems to have run out of suitable candidates for top political positions, and the idea of an SPD chancellor has become extremely remote.
A Chancellor at Ease
Merkel herself seems to have made the right move by relinquishing party power. She has returned to the top of the polls since, and it appears that voters have begun to perceive her with a sense of sentimentality and gratitude. She presides over, rather than leads, her government, projects no domestic political agenda of her own, while pointedly promoting the values of multilateralism abroad, and stays away from internal government disputes as best as she can, interrupting herself only by some motherly admonitions at times.