Merkel’s challenge is just beginning

It is nearly a month since Germans went to the polls and produced the near-equivalent of a hung parliament, and it could be another month before an agreement is hammered out between the nominal winner, Angela Merkel’s Christian Democratic Union, and the near winner, Chancellor Gerhard Schroeder’s Social Democrats. If a week is a long time in politics, then such a pause is like an ice age. Two months without a real government would be a matter of concern anywhere, not least in a country pivotal to the European Union, whose rotating presidency only lasts for six. The delays are due to interparty haggling between two claimants to the throne – or, in this case, the Chancellery and cabinet – and not the extended vote recounts and court interventions that marred the 2000 US election. It is an interregnum but hardly a crisis. This week it emerged that Merkel will replace Schroeder as chancellor and that those two parties will try to govern together in a so-called grand coalition. The rest, including cabinet details, policy direction, and Schroeder’s future employment, remains to be worked out. What might it all mean more widely? A (yawn) big event Most observers have greeted the result either with dismay or stifled yawns, without really pausing to consider the groundbreaking elements at work. The consensus seems to regard a grand coalition as a recipe for inaction, a marriage of convenience or even a necessary evil that is not too likely to do anybody much good: either of the two parties, Europe, Germany’s foreign relations, or the cause of reform that both parties, especially her own, have already endorsed. After running a lackluster campaign in which a big initial lead was all but whittled away and her chief economics adviser was howled off the national stage, Chancellor-designate Merkel will be entering office like a fighter with one arm tied behind her back. Since she ran a poor race, the assumption seems to be, she will also be uninspiring as chancellor of a government already being written off as ineffectual. Frau Merkel now has to thread her way through a domestic maze before leaping into the equally fraught world of international diplomacy, heading a party grouping (CDU-CSU) that won little more than a third of the vote and shackled to the opposition. No wonder her smile at capturing her country’s, and arguably Europe’s, highest elective office seemed a little subdued. Such low expectations could serve her government well, of course; they are often the path to success. For all the groans and ennui of a split election result, her rise reveals some striking changes in Germany itself. She is the first female holder of any high office there, ever. She is the first Ossie, or East German, of either gender to rise to political prominence in the 16 years since the Berlin Wall fell. She is, in effect, a double minority. Together, these factors already amount to a striking political and personal accomplishment in a country where «Ossies» have been uncomfortably easy targets for subtle prejudices and in a system favoring consensus over experimentation. This one-time physicist may have gotten an early helping hand from her mentor, former CDU chancellor Helmut Kohl, but she has moved rapidly and even ruthlessly to consolidate her position when it suited her – hardly indicative of weak will. She is unlikely to emerge as the «German Thatcher» for many reasons, but prior expectations of failure are gratuitous. She was, after all, going up against one of postwar Germany’s most formidable campaigners, who ended up blinking first. How grand? Even so, any newcomer faces a huge challenge in taking the reins in a country with a stagnant economy, double-digit unemployment, uneasy relations with a key ally (the US), and so many outside eyes trained on her. The fact that her party will control fewer than half the cabinet posts (even the key finance and foreign ministries will be SPD posts) does not make it any easier. Coalition governments in continental Europe are, of course, the norm. Every postwar German government, bar one, has been one. The difference now is that the two big parties are involved, like the uneasy spells of cohabitation in France. It is also not the first time that Germany has experimented in such a way. In 1966-69 the CDU’s Kurt Georg Kiesinger steered a careful course together with the SPD, brought into government for the first time since the 1920s and whose legitimacy was still being questioned by some. The German polity of the 1960s was far more brittle than now. There are, nonetheless, parallels with the present. Both governments, then and now, were brought on by a sense of economic stagnation and crisis. Both have also accompanied political splintering. With the big parties forced toward the center, new or fringe groups tend to thrive. The Left Party took 8.8 percent this time around; in the 1960s it was the neo-Nazis that grew uncomfortably until being outlawed by the constitutional court. The name Gerhard Schroeder even played a role on both occasions (though the defense minister by that name in 1966-69 was a different person). That government lasted nearly three years; this one could also prove durable. Even so, the situation in 2005 is very different. Structural economic reform, not just stimulus, is the clarion call. The European Union is a different animal of 25 members, not the six of the old EEC. Germany is less dominant, less the economic locomotive, than it used to be. National assertiveness under Schroeder led to transatlantic tensions that never were a factor before. Wider ripples A shared-power arrangement under Merkel is likely to shift course – and indirectly affect Greece – in a couple of ways. First, the really bold economic reforms her campaign wanted are likely to be sidelined. This will disappoint those in Greece and elsewhere hoping for a continental European lead on this. However, it may also keep European growth anemic, dampening down interest rate levels, which could marginally help Greece’s battle to get a handle on its crushing debt problem. In foreign policy, her opposition to full Turkish membership in the EU goes against official Greek policy of advocating accession. Still, she will have to tread carefully on this given that her predecessor took the opposite line. At any rate, one big decision has already been made – to open accession talks – while the other big one, whether or not to admit Turkey, remains many years off. German attention is likely to shift somewhat toward the transatlantic rather than continental side of the ledger. Germany has turned a page, but it hasn’t thrown the book out the window. And Europe will feel the ripples, if not necessarily waves. Just don’t expect grand coalitions to become all the rage, especially in this neighborhood. Hellas would freeze over before that happened.