Germany: What Happens Next?

The key question now is: What happens next? After the social democrats have (wisely, I think) opted for a role in the opposition, there will be an extended period of bargaining on coalition formation, with only one majority option remaining on the table: the black-yellow-green “Jamaica”. That option is likely to fail. Differences among the participants cannot possibly be bridged in stable ways. After all, the Greens would at the very least have to win the support of the majority of their membership constituency, which is hard to imagine. The next option is the formation of a black-yellow minority government. That would be without precedent in Germany at the federal level. But it will be tried, as new elections are unlikely to yield an easier-to-handle result, perhaps a worse one. Moreover, there are creeping succession leadership crises in both the CDU and CSU (if not SPD), plus looming divorce issues between the two Christian “sister” parties regarding the continuation of a joint faction in the Bundestag.

We see an ongoing flattening of the bell curve of the parties’ electoral strength. We see a rather dramatic loss of center parties, a moderate growth of the leftist parties, and a big growth of the new rightist party. “Catch-all” parties catch less and less.

They pay the price for their centrist complacency, consensus politics, and their silencing of contentious issues. The CDU slogan “A country in which all of us like to live and live well” can hardly be surpassed in its political emptiness. Merkel told voters “You know me”, implying that more does not have to be said: let the incumbency bonus speak for itself. Schulz was right: the chancellor won by denying politics and open controversy – but why has he failed to revive it?

No more unique Germany

German exceptionalism is over. It consisted of the combined effects of historical immunization to authoritarian regime forms and political as well as economic stability. So far, Germany has lacked a relevant force of the political right in its federal parliament. Now we face the dynamic of accelerated centrifugality. Even if it were desired/-able, a grand coalition would no longer be possible (or highly unstable and virtually suicidal for SPD). German exceptionalism also consisted of the relative robustness of social democracy, which has now hit its historical low, though not (yet) having arrived in the single digit realm as in France and the Netherlands.

Also, a historical virtue of PDS/die Linke is a thing of the past. It consisted of its capacity to mask the legacies of East German xenophobic, authoritarian nativism by reframing it in terms of social justice issues. Now die Linke has lost 420,000 of its voters to Alternative für Deutschland (AfD, which also mobilized nearly 1.5 million non-voters, making it the party with by far the greatest success in mobilizing this group relative to the number of votes it received). In spite of this massive loss to AfD, however, die Linke has been able to more than compensate for it by winning the support of 700,000 former social democratic and 330,000 former green voters.

There is a clear East/West divide in Germany. The new Länder in the East provided almost twice the level of electoral support for AfD as that of the old Länder. In Saxony, AfD even overtook CDU by a narrow margin and came in first. The same divide worked in Berlin as well as in the EU in general: populists are in power in Hungary and Poland and (so far) nowhere in the West of Europe.

We seem to have arrived at an age of non-cooperation where the world is framed as a zero sum game immersed in moral hazard psychology. The anti-EU mobilization has been successful by asking the rhetorical question: why should we share our resources with others? Euro bonds and other forms of debt mutualization are taboos that are strictly observed by virtually all sides. There is a new ethos of “going it alone”, of resentful unilateralism, of putting ourselves “first” (Trump), and of taking back “control of our country” (as in Brexit).

This is of course very bad news for Emmanuel Macron and others who have launched plans for deeper integration and the pooling of parliamentary, fiscal, educational, military and research resources and competencies in order to cope with border-transcending challenges that affect all of us. Yet, in order to maintain domestic support, the new German government will feel encouraged to use its power within the EU (power being, as we know from Karl Deutsch, the privilege to be relieved from the need to learn) to continue its course of unashamed punitive austerity mercantilism, mitigated by a Europhile rhetoric that serves little more than the purpose of blame avoidance. Whereas the French President shows a remarkable degree of ambition, imagination and determination, many members of the German ruling elite, as well as the majority of the media, are busy drawing up red lines.

More than a protest

A key feature of populism is its “negative” politics (Max Weber) of distrust and protest without a coherent programmatic stance (or even a credible ambition) to govern. An excuse often heard these days is that AfD voters do not really believe in this party’s ideology but just wanted to register their protest against Merkel; yet they did not hesitate to register protest with an authoritarian and xenophobic bunch of people whose declared purpose is to “pursue” their political enemies, a change which indicates the weakening of normative inhibitions which so far have been operative in German politics.

Populist mobilization relies on the (vertical) mobilization of distrust (of political elites and intermediary institutions – mendacious media (Lügenpresse), academia, experts, civil society associations, also courts) – and the (horizontal) spreading of fear of outsiders. Migrants/refugees are ideally suited as objects of fear mongering for three reasons:

• Economic: they threaten us in the labor and housing markets and live at the expense of our taxes;
• Cultural: allegedly incompatible language, religion, ethnic identity;
• Failures of state protection: rape, crime, terrorism.

Distrust is particularly effective when the two can be combined: Elites are to be distrusted because they fail to protect us from or are even actively promoting (Merkel in September 2015) the access of migrants. (Trust is anyway a scarce political resource. It is most readily granted in Germany to professions such as fire-fighters and rescue medics (=96%) and least so to professional politicians (=15%)).

One lesson we can draw from the 2017 campaign and its outcome is this: Centrism of grand coalition governments breeds anti-elite centrifugality and the further fragmentation of party system, with an unprecedented number of seven distinct parties now in the Bundestag. As one commentator observed: “Fighting extremism in Germany may demand less political centrism.” (Another one has joked: There are two right answers to the question: Are there still true social democrats in Germany? One answer is: No – all socialist projects have been abandoned by SPD. The other is: Yes – there are even two of them, namely both members of the grand coalition whose social and economic policies have become virtually indistinguishable.)

Yet that may soon change under the impact of the new rightist forces in parliament. A typical response of threatened conservative leaders (Cameron/May in Britain, Rutte in the Netherlands, Kurz in Austria, Seehofer in Bavaria, among others) is to follow the strategy: If you can’t beat them at the polls, adopt (a light version of) their appeal and assure their voters of your “understanding”.

Another problem grand coalition strategists must face is this: Centrist parties cannot fight their partners because they are themselves to be blamed for failures they committed while governing in coalition with them. (Which is why candidate Schulz was “imported” from outside German politics, i.e. from the European Parliament, in spite of his manifest deficiencies.)

Thus, important controversies were covered up by consensual silence: The EU debt crisis, migration and integration, the future of the EU, poverty/inequality, climate, Leitkultur (mainstream culture), international and Atlantic relations, German arms trade, Russia/Ukraine, Poland, investment gap vs. austerity and “black zero” (balanced budget) etc. figured at best marginally or not at all in the campaign. Instead, parties focused on quite arguably secondary issues such the use of diesel. Yet, after all: Who can be opposed to cleaner air, or, for that matter, to sanctioning the fraudulent machinations of top managers of the car industry? Outside observers agreed: “Germany’s sleepy campaign has left most of these issues unattended”. As the NYT wondered: The “paradox is that the most important political topic is not being discussed by the most important political parties in public.”

This applies to issues of inequality and poverty, too. Schulz has proclaimed that it is “time for social justice”, without providing the bare outline of relevant and credible policies enhancing “justice” – and this in a country where simply not all “live well” (as the CDU slogan claimed) but where the lowest 40 per cent of earners have seen no real pay increases in two decades, where every sixth child lives in near-poverty and where no less than 1.5m are being served by food banks.

Still exceptional

Germany’s intransigence on economic cooperation and “leadership” (the opposite, nota bene, of domination) in Europe has structural causes in the German political economy: once described as “overindustrialized“, it still has an outsized manufacturing sector that employs 19% of the workforce (as opposed to 10% in the US and 9% in the UK). Maintaining a high level of manufacturing employment requires Germany to secure a trade surplus (of currently 8% GDP, twice the volume of China!). This can be done only if the Economic and Monetary Union (EMU) regime remains stable, as the external value of the Euro is depressed by all the others that export less or import more than DE. Absent the Euro, from the presence of which Germany profits more than anyone else, German exports would become mostly non-competitive, as a new Deutschmark would dramatically appreciate, putting exports and export-dependent jobs into jeopardy. Without the Euro, the German economy would price itself out of markets for many manufactured goods. In order to keep export industries alive and prevent companies moving to low wage locations, Germany depends on wage restraint and other measures that ensure favorable unit costs of labor and productivity gains through process innovation. Other members of the Eurozone cannot improve their competitive position through the devaluation of their currency anymore; the EMU regime deprives them of their monetary sovereignty, thus leaving them with the only option of adjustment by “internal” devaluation.

It used to be a blessing in Germany (and similarly in France) that the right is divided into sectarian groups vehemently fighting each other. An instance of this divisiveness is the unprecedented refusal, declared one day after the election, of AfD chairwoman Frauke Petry to join her party’s parliamentary caucus (a party she co-founded and is now ready to leave). Much will depend on whether AfD can overcome that kind of internal struggle, which I think is unlikely.

With the SPD (and probably the Greens) out of power, the German government is no longer prevented from shifting rightwards (under CSU pressure) to even more explicitly dominant, Eurosceptic and migration-averse policies.

Based on a talk given by the author at the Hertie School of Governance, Berlin, on September 28