Angela Merkel’s “broad Right” has won the German elections by a narrow-but-clear margin. Less than an hour after the polls closed, Franks Steinmeier, the Social Democrat candidate for the chancellorship, conceded defeat in a tough speech that promised a strong opposition to Merkel’s new government. Merkel welcomed the result soon afterwards. And though the popular-vote totals may shift slightly as the full results come in, no one thinks that the Right’s victory will be seriously undercut.
The headline result is therefore: Center-Right Coalition Replaces Right-Left “Grand Coalition.” Merkel will finally have the reforming conservative coalition she has always said she wanted. Her socially conservative Christian Democrats will have the economically conservative Free Democrats as their junior partner.
Together with the fact that Merkel’s own spokesman on economics is a risk-taking believer in market reforms, this probably means that Germany’s so-called “social market” economy will shift slightly rightwards with long-term structural reductions in tax and economic regulation.
There is unlikely to be a change in Germany’s relatively cautious fiscal stance, however. It represents an all-party consensus in favor of lower stimulus payments than Washington and London have launched. It reflects the German nervousness of inflation. The built-in fiscal counterweights to recession such as unemployment and welfare transfer payments have built up a large budget deficit as it is. And, finally, the overall mixture seems to be working without any additional injection of spending — and perhaps because there is no additional spending.
All in all, Germany is emerging from the recession quite fast. Its export markets are recovering. Germans are confident that their money is safe. What is now needed is not extra state spending but some incentive for more private spending to match increased export demand with more buoyant domestic demand. Tax cuts and deregulation will give Germans exactly this modest encouragement to spend safely without risking higher inflation.
Electing Merkel but giving her the Free Democrats as partners represents this new consensus combination very well. It also means, however, that Merkel will have the chance to show whether or not she really is Germany’s Thatcher. Until now Merkel has been able to avoid hard choices by pointing to the constraints her SDP governing partners have imposed on her. Now she will have to choose one way or the other — either market reforms or the slow strangulation of German enterprise by accumulating regulations.
Whatever her decisions on these basics, German foreign policy will change hardly at all. All parties agree that Germany should exercise joint leadership of Europe alongside France, enjoy a strategic political and economic partnership with Russia, and become America’s most important friend in Europe. Ukraine, Georgia, East and Central Europe, and dissidents generally will be wary of what these priorities mean for them. But the current U.S. administration should be fairly comfortable with them — especially since the tone of the CDU-FDP foreign policy will be more pro-American and more energetic.
For the moment at least that means German troops willl stay in Afghanistan. But the contradictions of a policy that elevates the interests of the Russo-German relationship over those of fellow EU members will emerge eventually — if only because Russia’s demands grow with their acceptance.
What the elections also show is a series of new political directions not only for Germany but for Europe as a whole.
First, the Social Democrats’ vote total of 23 percent confirms the continued decline of the European center-Left that was visible in the European elections. For whatever reason Europe’s center-Left is steadily losing support.
Second, the CDU’s total of 34 percent — the second-worst result in the party’s history–confirms the failure of the mainstream center-Right to benefit proportionately from the Left’s failure.
Third, minor parties are steadily attracting the interest of voters. Consider these statistics: the two major parties between them got a bare 55 percent of the total vote. More than four in ten voters chose other parties — the Free Democrats (14 percent), the Greens (10 percent), the unreconstructed neo-Communist Left party (12 percent), and handful of also-rans. None of the three “major minors” reached as high as 10 percent four years ago. In Germany the respectable Free Democrats were available to scoop up disillusioned voters that in other countries have moved to the wilder shores of extremism. But that may not always be the case.
Germany and Europe are moving towards a new party system. This election marks an important step forward on that journey — and, if the new coalition succeeds, a chance for Anglea Merkel’s Broad Right to shape the political future. But that will require a bold willingness to take risks that so far Ms. Merkel has yet to demonstrate.