New grand coalition in Germany with historic tasks

The February 23 election in Germany closed a chapter: an experiment with a social democratic – green – liberal (“traffic light” or Ampel) coalition. Voters have been unambiguously critical towards the outgoing government. The SPD lost some 40% of its 2021 support, while the liberal FDP was knocked out of parliament and the Greens will be excluded from the next government. Meanwhile, the far-right AfD doubled its power, and the far-left Linke resurrected. The record-high participation rate should also be noted. 

The Ampel coalition ended early but it was not doomed from the very start. There was synergy between the three players, to go for deeper European integration, and deliver modernisation, sustainability, and more social cohesion in a consistent programme. Since, however, the start of the Russo-Ukrainian war (February 2022), the coalition was engulfed in a maelstrom of external shocks, unforced errors, and national humiliation. Some Ministers have become an international embarrassment. 

The new governing coalition is emerging under the leadership of the centre-right CDU-CSU. Reviving the economy will be a key question. In the last 5 years, some pillars of the German growth model have been knocked out, and the manufacturing output fell by 20 per cent. The new coalition must stop the industrial decline, find a way for recovery, and even introduce a new economic model. Germany can only do this in close coordination with the EU partners. At the same time, reforming the foolish and counterproductive debt break is entirely in the power of the Germans and must be a priority for the new government, in the interest of Germany but also Europe as a whole. 

The two parties that surged in the polls, the AfD and Die Linke, reflect the continuing problem of East German economic legacy. The AfD vote increased everywhere in the country but in particular in the poorest regions. This falls in the wider trend (pertaining also the UK and US) where regions that are economically “left behind” or even depressed (in Germany it is typically the East) grow wary of mainstream parties, become more hostile to immigration, and especially the progressives lose ground. This means that the far-right exploits the geography of discontent, which calls for a much more serious approach to territorial cohesion and regional development. 

How to tame the far right, which now is the main opposition party in the Bundestag, will remain a daunting question. An important lesson is that the general anti-populist outrage and series of demonstrations failed to contain the increasingly aggressive ultra-conservative trends. The far right has been emboldened, and the border between the centre-right and far right become somewhat blurred. As opposed to some other EU countries, in Germany the centre-right resists the opportunity of an alliance with the far right. But even in that case, this is not a substitute for having strong progressive parties offering a vision but also tangible improvements in the lives of the working people. The skilful use of social media campaigns by the AfD also requires attention and the communication gap must be closed. 

For the likely new Chancellor Friedrich Merz, transatlantic relations will be a major question he must solve. His first post-election statements indicate that he understands the gravity of the problem and he will be ready to work together with other European partners to develop a genuine strategic autonomy. Negotiations for a just and lasting peace for Ukraine as well as boosting the common European defence capacity are part and parcel of this crucial effort. At the same time, Merz and other centre-right leaders must understand that upholding the political values of the EU and the European social model are equally important pillars of a European identity and sovereignty. 

After the abysmal results in the European Parliamentary and the Bundestag elections, German Social Democrats must reflect on the reasons for their decade-long decline and a possible strategy that could turn things around. Much of this work will have a European dimension and will be coordinated by the Party of European Socialists in 2025. Essentially, progressive forces – in the EU, Britain as well as North America – will need a new strategy with a clearer economic and social programme at its heart.

Stay tuned – On Friday February 28, read the Progressive Post’s Election Observatory on the German elections!