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General Elections - September 2013

The EU put off making many tough decisions until after the German elections. Not just Greece; there's also the banking union, where there wes a need for some decisions rather soon, the single supervisory mechanism… and how to also do a restructuring of the many zombie banks that were most likely still around both in the periphery and in Germany and France.

By December 2012, nine months ahead of election day, things were looking good for chancellor Merkel. Opinion polls said her coalition government no longer has a majority - but the collapse of its junior partner, the pro-market Free Democrats (FDP) could yet be stopped; and of course, Merkel had other options. There is no doubt that her center-right Christian Democratic Union (CDU) was Germany's strongest political force. The public seemed to be in no mood for a potential opposition coalition of Social Democrats (SPD) and environmentalist Greens, and since they said they would not enter into a coalition government with the Left Party, the successors to the East German communists, it appeared there will be no government without Merkel's CDU.

Germany held parliamentary elections 22 September 2013, with current Chancellor Angela Merkel’s party riding high in the polls. Optimism over the economy appears to be working in her favor - with few other issues featuring on the campaign trail.

On the campaign trail, Angela Merkel’s supporters held up banners saying simply "Angie." Having ridden out Europe’s debt crisis, the German chancellor has built a loyal following - and she wants a third term in office. We have had four good years, Chancellor Merkel told supporters, and we want a further four years so that we can say in 2017 that more people are doing well than they are today.

There were no political parties in Germany advocating the kinds of solutions to the eurozone crisis that the governments of southern Europe would like to see, or the governments of the U.S. and the UK, for that matter, would like to see.

German lawmakers arrived at a deal to form a coalition government, more than two months after the country's elections. Merkel has made concessions to the SPD on the economy, agreeing to a minimum wage of EUR 8.50 per hour, tighter rules for employers and pension hikes, despite howls of protest from business.

After marathon negotiations on November 27, 2013, officials from Chancellor Angela Merkel's Christian Democratic Union (CDU) party and the center-left Social Democrats (SPD) finalized an agreement to form a "grand coalition" that will establish a mandatory minimum wage and streamline some banking policies. “The result is good for our country and has a conservative imprint,” said Hermann Groehe, secretary general of Merkel’s CDU. “No new taxes and no new debts.” Martin Schulz, president of the European Parliament and a senior SPD negotiator, called it an “excellent result” for his party. The last CDU-SPD coalition suited Merkel, but prompted SPD left-wingers, already bitter about labor reforms launched by the last SPD chancellor, Gerhard Schroeder, to leave in droves.

Germany was the only European Union country without a minimum wage law. The issue was at the center of the debate between incumbent German Chancellor Angela Merkel and Peer Steinbrück of the Social Democratic Party, her opponent in the federal elections set for 22 September 2013. Germany's Social Democratic Party made the minimum wage the dominant issue in this political campaign. Their candidate for the post of chancellor, Peer Steinbrück, recommended an hourly wage of $11.00 (8.50 euros) for all German workers and vowed to pass a minimum wage law in the first 100 days on the job.

Chancellor Angela Merkel was originally opposed to a minimum age law, but campaigned on the idea that industries and the unions should decide their own minimum wage by collective bargaining. Her Christian Democratic Party feared a national minimum wage will make German products uncompetitive and eliminate millions of jobs. They also point to countries like France, where a high minimum wage of $12.50 (9.43 euros) an hour made employers reluctant to hire and is considered a leading cause of high youth unemployment.

Merkel's junior partner, the pro-business Free Democratic Party [Germany's liberals - in the European sense, not American] were kicked out of the regional parliament in Bavaria at recent elections, and the FDP aggressively asked for votes so that the party would meet the five-percent threshold to get into parliament. According to pre-election polls, the FPD might receive little more than five percent of the vote. That meant the coalition between CDU/CSU and FDP – or black and yellow coalition – would get a maximum of one percent of votes more than the opposition, making it far from clear that the coalition can be continued.

Many observers in Berlin were expecting a coalition between the country's two largest parties, CDU/CSU and SPD – without Steinbrück's participation. Most political scientists and the media would prefer a different outcome, but among voters a new edition of the so-called ‘grand coalition', which ruled the country between 2005 and 2009 was the most popular scenario.

Final results gave Merkel's Christian Democrats 41.5 percent of the vote, finishing only five seats short of an absolute majority in the lower house. The CDU and Angela Merkel gained nearly eight percent of votes, the FDP the Left and Green parties all lost ground, and she widened the gap between her CDU and Social Democrats (SPD) by an additional five percentage points. With 24.7 percent of the vote, according to final preliminary results, the SPD would provide a large number of seats to the CDU/CSU.

The liberal party won only 4.8 percent of the vote, failing to surpass the 5-percent threshold needed to enter parliament, the first-ever fall from national power for the party since post-war elections. The Alternative for Germany - a new party calling for an "orderly breakup" of the 17-member eurozone - held at 4.9 percent, also failing to win seats. The Left party - the successor of the community party from former East Germany - could use its 8.4 percent to help the SPD and the Greens form a majority. This is not seen as a realistic possibility, as the Social Democrats have repeatedly ruled out working with the Left at a federal level.

Germany's Social Democrats joined a coalition government with Angela Merkel's conservatives after the SPD party's rank and file overwhelmingly approved the move in a referendum on 15 December 2013. The CDU would continue to occupy the finance, interior, defence, health, education and research. It also gets the minister of state to the chancellor. The interior ministry had up to this point been led by the CSU, which will now take over the development ministry. The CSU would retain responsibility for the department of transportation, which would be expanded to cover digital infrastructure issues, and the ministry of agriculture, though it must hand over consumer protection to the SPD-led justice department. In addition to this new department of justice and consumers, the SPD would have the foreign ministry, a Ministry of Economic Affairs enhanced with an energy policy mandate, the Ministry of Labour and Social Affairs, the Ministry of the Environment and the Ministry of Family Affairs.

The SPD was in government with the CDU/CSU in a ‘Grand coalition’ since 2013 and although they blocked some policies such as plans to sell Germany’s state railway, as well as helping to get the country’s first ever minimum wage introduced, some thought Germany would still have been best served if the Social Democrats had fiercely opposed Merkel and not decided to work with her.

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Page last modified: 14-03-2016 11:56:27 ZULU