26/08/2009 - Analysis
On 27th September 64 million Germans are being called to ballot to elect the representatives of the Bundestag, the Lower Chamber of Parliament. This election is special since it follows 4 years of government by the "grand coalition
" led by Chancellor Angela Merkel (CDU) and which rallies the Christian Democratic Union (CDU) and the Social Democratic Party (SPD).
All of the polls are forecasting victory for the Christian Democratic Union, led by Angela Merkel. She hopes that her party will achieve a clear victory in this election so that her hands will no longer be tied by the Social Democrats during the next legislature. If the results allow it she hopes to form a government coalition with the Liberal Democratic Party (FDP). The Social Democratic Party led by the present Foreign Minister, Frank-Walter Steinmeier in these elections is experiencing difficulties and has suffered serious leadership, electoral strategy and positioning problems. In Germany where the two party system seems to have had its day the result achieved by the "small
" parties will be decisive for the formation of the next government.
2009 is a "super electoral year
" for the Germans. This started on 18th January with elections in Hessen where the SPD was decimated by the CDU with 23.2% of the vote against 37.2% (-13 points in comparison with the previous election on 27th January 2008). On 23rd May German President Horst Köhler, supported by the CDU and FDP was re-elected for a second five year term in office as head of the Federal Republic of Germany. Finally on 7th June last the CDU/CSU pushed ahead of its Social Democratic rival by 10 points winning 30.7% of the vote in the European elections against 20.8% for the SPD, i.e. the worst result in its history. "Last Sunday was not a good day. It upset me as much as it did you. The elections were a fiasco but the game is still open, we shall keep it open and in the end we shall win,
" declared Frank-Walter Steinmeier after the European election.
Chancellor Angela Merkel, who won, was more prudent. "The European election was evidently not an electoral test for the general elections but its result indicates a trend. This result provides us with courage, strength and confidence,
" she stressed. Local elections were organized on the same day in Bavaria, Saxony and Rhineland Palatinate, elections in which the SPD also lost positions.
On 30th August i.e. one month before the general election, Saxony, Thuringen and Sarre will elect their regional Parliaments. The Left Party (Die Linke) leader Oskar Lafontaine is running in the latter region which he governed from 1985 to 1998 under the SPD banner. Just a few days before the election, Die Linke is positioned 3rd in the polls, with around 17% of voting intentions.
4 years after the September 2005 elections the SPD clearly appears to be the loser in the grand coalition. The CDU, the main favourite, has by no means won already. We should remember that in 2005 the CDU had an easy lead over the SPD one month before the election. On 18th September 2005 this lead had melted away like snow. The SPD's recovery owed much to the personality of former Chancellor Gerhard Schröder (1998-2005).
The German Political System
The general elections take place every 4 years according to a mixed system that combines the single majority vote and the proportional list vote. Every voter can cast 2 votes. The first of these (Erststimme) enables the voter to make a single choice and appoint a candidate as MP in the constituency where he lives (the country has 299 constituencies); the MPs elected in this manner win a direct mandate. The second vote (Zweitstimme) enables the voter to choose a political party represented on a list of candidates across the "Land
" (Germany has 16 Länder). The percentage of the second vote decides on the number of seats that are given proportionally to each party and the number of representatives they have in the Bundestag.
Only the parties who have won over 5% of the votes cast proportionally on a national level or with three direct mandates on a single vote can be represented in the Bundestag. If a political party wins more direct mandates in a Land than the number of seats granted to it according to the number of second votes it still retains the number of surplus mandates (Überhangmandate). This explains the fact that the number of members in the Bundestag varies according to the results in each general election. At present the number is 614. In the last legislature (2002-2005), it was 603.
The electoral system aims to guarantee the formation of a stable parliamentary majority and avoid the disintegration of the political arena as experienced by the country under the Weimar Republic (1919-1933) when the great number of political parties represented in Parliament made the formation of a government almost impossible. The system also makes it increasingly difficult to have a government comprising a single party. During the general elections the Germans generally vote for a party rather than for a particular person. This is important and obliges Chancellor Merkel to find the means to help her party benefit from her immense popularity.
In 1949, 11 political parties were represented in the Bundestag, in 1957 there were only 4 and only 3 (rallying the CDU and the CSU in one party) from 1961 to 1983 (SPD, CDU/CSU and the FDP). In 1983 the Greens managed to rise above the 5% threshold of votes cast and entered parliament; they were followed by the Party of Democratic Socialism (PDS), that originated in the Unified Socialist Party (SED) of former East Germany (the fall of the Berlin Wall was key in the entry of former Communist MPs into the Bundestag) and Die Linke in 2005.
6 political parties are represented in the Bundestag:
- the Christian Democratic Union (CDU) led by outgoing Chancellor Angela Merkel has 180 MPs ;
- the Christian Social Union (CSU), led since the end of 2008 by former Agriculture and Consumer Protection Minister, Horst Seehofer, has cooperated electorally with the CDU since 1953. According to their agreement the CDU has no candidates running in Bavaria and the CSU only runs in this particular Land. The CSU has 46 seats;
- the Social Democratic Party (SPD) has been led since 18th October 2008 by Franz Müntefering and has 222 MPs. Frank-Walter Steinmeier, outgoing Foreign Minister is the party's candidate for Chancellor.
- the Liberal Democratic Party (FDP), led by Guido Westerwelle, took part in all of the CDU led governments during the 1980's and 90's but also in the 1970's in government coalitions with the SPD. It has 61 MPs;
- the Left Party (Die Linke), born on 16th June 2007 of the merger of the Party of Democratic Socialism (PDS) that was originally the Unified Socialist Party (SED) in former East Germany and the Alternative for Work and Social Justice (WASG) created on 22nd January 2005 that rallies the former Communist elite and those disappointed by social democracy. Led by Lothar Bisky and Oskar Lafontaine it has 54 seats;
- the Greens, born of the merger in 1993 of the Alliance 1990, a movement for civil rights in the former East Germany and of the Ecologist Party – it has 51 seats.
The German Parliament also has an Upper Chamber, the Bundesrat, comprising members of the governments of the 16 Länder. Each Land has at least three votes; the Länder that have over 2 million inhabitants have 4 votes, those with over 6 million, 5 votes and finally those with over 7 million, 6 votes. The Bundesrat has 69 members.
A Round Up of the German Political Arena
The CDU dominates German political life. The party governs 13 of the 16 Länder i.e. twice that of its social democratic rival – a number which has not been achieved since 1945. The party owes much to the personality of Chancellor Angela Merkel, the country's most popular political personality after 4 years of government. In December last she was re-elected for 2 years as head of the party with 95% of the vote i.e. her best result since 2000 the year in which she took over the leadership of the party. An atypical person, Angela Merkel, who originates from former East Germany a country to which her father, a Protestant pastor, voluntarily returned to preach, has transformed the CDU. Under her leadership the party has modernized and grown more liberal with regard to certain issues of society, granting status to homosexual couples and by adopting a more positive attitude to immigration, now described as a source of wealth for Germany. By mixing liberalism and social justice the Chancellor hopes to attract a young, urban electorate and turn the party into the representative of the centre or rather the middle (Die Mitte) as the Germans say.
The CDU is however not free of in-fighting and has experienced division, notably with regard to issues that affect society. Certain party barons such as Christian Wulff, Minister President of North-Rhine-Westphalia have tried for example to influence the party's general election programme.
Advocating both greater freedom and more social justice Angela Merkel set out to conquer the young and urban dwellers before the economic crisis forced her to refocus on economic and financial affairs.
Some of the CDU electorate, notably the elderly and the more conservative, but also shopkeepers and even managers, accuse their party of undertaking an overly social policy. The party can find solace in the number of its members. Indeed for the first time in Germany's history the CDU leads over the SPD in terms of its members; 530,755 in comparison with 529,994 (2008 figures). The historical parties of the German political arena are both losing ground however, and the decline on the left is more noticeable than on the rival right.
The CDU is also undergoing a difficult period in its relations with the CSU. Both parties disagree on 2 major themes, the reform of the healthcare system and taxation. The CSU was quick to accuse the CDU, which is refusing to reduce taxes, of being responsible for the historical loss that it suffered in the last regional elections on 28th September 2008 in Bavaria. Holder of the absolute majority in this Land since 1962 the CSU recorded an historic defeat but still winning 43.4% of the vote – this was -17.3 points than in the regional election 2003. This decline came after those witnessed in the local elections on 2nd and 16th March 2008.
The CSU is a major reservoir of votes (around 20%) for the CDU. During the election on 18th September 2005 the CSU enabled the CSU to take the lead. Chancellor Angela Merkel, who is aware of the situation said, "To succeed Bavaria needs a strong CSU as the CDU needs a strong CSU too.
" "In no way is the CSU a regional federation of the CDU that Angela Merkel can simply cajole as head of her party,
" stressed Michael Glos, at the time Economy Minister (a position reserved for the CSU when the CDU governs), in January 2009.
The CSU's decline does modify the balance of power federally. "To defend the interests of Bavaria in Berlin a weakened CSU may be tempted to be more aggressive,
" analyses Manuela Glaab, political expert at the University of Munich. Led by Horst Seehofer since its electoral disaster the CSU is using the overstatement to recover its electorate which will contribute to the weakening of the position held by Angela Merkel's CDU.
In office for the last 11 years the SPD appears to be exhausted. "It is no longer a party of the masses, it is almost a sect,
" declared Manfred Gullner of the Forsa polling institute. The SPD, which had more than one million members in 1976, now has less than half that number. In Germany the subsidies granted by the State to the parties are calculated according to the number of members they have and their electoral results. The SPD lost many voters after the establishment of the 2010 Agenda from 2003 to 2005 under the government of Chancellor Gerhard Schröder; this policy was designed to reform the labour market and the social protection system. The goal pursued aimed to reduce social aid and increase pressure on the unemployed to encourage them to start work again rapidly. These reforms, undoubtedly necessary, gave the impression however of being unfair and authoritarian in the way they were applied.
The unions have drawn away from the SPD and the number of members who left the party has doubled to reach over 50,000 annual departures. From 2002 to 2004 the SPD lost 110,000 members and over one third of its members over the last ten years. On 31st July last the main union in German industry IG Metall announced that it would longer call to vote in favour of the SPD in the elections. "I know that there are historic links between the SPD and the unions. But we are in the 21st century. The time when the unions could recommend a vote for one or another party is over,
" said Berthold Huber, IG Metall leader and SPD member.
The SPD has neither real leader nor credible candidate for the Chancellorship. It seems to be lacking both strategy and programme. Re-elected as head of the party on 18th October 2008 (with 85% of the vote) in replacement of Kurt Beck who resigned in September, Franz Müntefering who left office as Vice-Chancellor and Minister in November 2007 to stay with his wife who was ill with cancer (she died in July 2008) is the party's fifth chairman in five years.
The SPD suffered the rise of the Greens in the 1980's – it was destabilized by Die Linke which took over areas such as social justice at the end of the 1990's. In addition to this the SPD has still not succeeded in defining a clear position in the face of Die Linke. Although any kind of cooperation between the two parties can be ruled out nationally the case is not so regionally (the SPD co-manages the Land of Berlin with Die Linke). In Hessen the lead candidate Andrea Ypsilanti (SPD) considered governing with the support of Die Linke for some time. She had to give up the idea due to insufficient support from her party although Kurt Beck, leader at the time, had agreed to this "red-red
" coalition. The latter suffered major criticism over his management of SPD/Die Linke relations. His rapprochement with Die Linke caused him to lose all credibility with the SPD and fostered a rekindling of internal division.
The dual rule (agreement possible as far as the Länder are concerned, no agreement on a federal level) supported by Frank-Walter Steinmeier undermines the SPD's credibility. "The SPD's participation in the government with the conservatives from the CDU/CSU has troubled opinion less than the change of direction announced at the end of February (2008) by former party chairman Kurt Beck. He questioned the principle of non-alliance in the West of the country with the Left Party. Suddenly the SPD's regional federations were allowed to negotiate an alliance with the Left Party and they think this is right as it has been the case for a long time in the former East Germany,
" analyses historian August Winckler. "The Left Party's programme is pure utopia. Nationally neither a coalition nor passive support are possible due to the isolationism supported by the party in terms of foreign policy and its totally unrealistic economic and social programme,
" declared Franz Müntefering who qualifies Die Linke's demands as "populist
" and "economically irrational
", considering that its programme "goes against our international duties
" and he repeats "that there will be no negotiation with the Left Party on a federal level.
Whilst the CDU is increasingly positioned as a party of the centre the SPD has swung to the left in the hope of differentiating itself from its main rival and in an attempt to recover some of Die Linke's electorate. However it is encountering a major problem: it has no room to manoeuvre and this makes it difficult to undertake any true change. Under these circumstances it is difficult to put forward any other policy than that offered by the CDU. Apart from the attraction of the Greens and Die Linke it seems that some of those disappointed by social democracy are ready to turn to the CDU and even the FDP.
The SPD lags behind the Greens in several cities such as Berlin, Cologne, Frankfurt and Bonn. "Above all it is the weakness of the social democrats that benefits the Greens. They are recovering the votes from those on the liberal left who are disappointed and disoriented by the SPD,
" stresses Nils Diederich, political analyst of the Free University of Berlin.
The Green electorate is mainly urban, much more qualified than the average and belongs to the wealthy middle classes.
The Greens have also refocused their policy over the last few years. By doing this they have developed their sphere of influence and yet have risked seeing their programme lose clarity and become the subject of criticism – it has even been rejected by some supporters. Since 17th April 2008 the CDU and the Greens have governed the land of Hamburg. The two parties disagree on several issues such a nuclear power, Turkey's membership of the EU and security.
Since November 2008 the Greens have been jointly led by Claudia Roth and Cem Ozdemir. The latter, who qualifies himself as being a German of Turkish origin, wants to see the party become the country's third political force after the CDU and the SPD. "You cannot go into battle saying to yourself: "we shall achieve nothing with no one.
" "This is why our goal is to make the Greens the third political force which would give us a chance of influencing events and the ability to put our ideas into action,
" he indicated. "It will be complicated to form a coalition in a five party system in which the two main elements are so weak,
" he points out recalling that the CDU-Green coalition already exists on a local level (Frankfurt) as well as regionally (Hamburg) and that "they work well
The Left Party (Die Linke) entered the Bundestag in September 2005. After that the party, which traditionally achieves results over 20% in the 6 Länder in the eastern part of Germany where it has many local representatives, succeeded in rising above the electoral threshold that enabled to have seats in several regional parliaments in the west: Berlin, Bremen, Lower Saxony, Hessen and Hamburg. Die Linke even won 4.3% of the vote in the regional election on 28th September 2008 in Bavaria. It governs Berlin with the SPD.
Die Linke are not benefiting any more from the international crisis than the SPD as demonstrated in the European elections on 7th June last when it was forecast by the polls to win over 11% of the vote just one month before the election – finally it only managed to achieve 7.5%. In addition to this the young electorate seems to be turning away from the party. It is fighting for a return to the Welfare State of the 1970's, the establishment of a wealth tax, the abolition of retirement at 67, the establishment of a minimum wage of 10€/hour and the abolition of university fees. "The rich should be taxed more,
" declares the party's leader, Oskar Lafontaine.
The FDP's successes are growing. The party is part of the government in 5 of the 16 most important Länder. In the 1990's, a triumphant time for liberalism, the FDP was at its lowest ebb. Now that the world is going through a major economic crisis the FDP has regained its credibility and is successful again: it won 11% of the vote in the European elections on 7th June last. During the most recent election in Hessen on 18th January 2009 it won 16.2% of the vote, its best score in 50 years.
Like the Greens the FDP attracts voters who are economically and culturally advantaged. It convinces those disappointed by the repositioning of the CDU, those exasperated by taxation and the most reticent with regard to social transfers. "The FDP's results are a sign of weakness on the part of the CDU that has been unable to show its competence with regard to economic issues. Angela Merkel is paying the price for her unstable approach,
" analyses political expert, Gero Neugebauer. After spending more than 10 years in the opposition the FDP is hoping to come back to power during the upcoming elections and form a coalition with the CDU. Its leader Guido Westerwelle has declared on many occasions that the CDU's electoral programme seemed a good basis on which to start work. The latter however for whom the election on 27th September next is the last chance to reach power is however ensuring that no doors are closed since any election can be the source of surprise.
The Electoral Campaign
The CDU is hoping to undertake a short campaign. For the first time it will not be preceded by a party congress – spending cuts obliged. On 28th June Angela Merkel presented the party's electoral programme entitled "We have the strength
". Unsurprisingly it is focused on the economy and taxation. "We are able to bring our country out of this crisis unprecedented in the history of the Federal Republic. We are even able to make it stronger than it was before these events,
" indicates Angela Merkel who re-iterates her attachment to the social market economy.
Against any rise in VAT during the next legislature, a measure she defended in 2005 ("In 2009 we are in a totally different situation and consequently we do not need to increase taxes and on the contrary we should be relieved of this burden,
" the Chancellor declared) Angela Merkel hopes to lighten the load that weighs on the middle classes. Her programme includes a decrease of 15 billion € in taxes on families, the middle classes and the poorest. It is also offering to raise the ceiling of the highest bracket from 52,552 to 60,000€. Angela Merkel, who accuses the FDP of promising the world with its tax reductions, is not totally against them. However she believes that a reduction in taxes would advantage the wealthiest that it would be saved more than spent and would not therefore help in boosting economic growth. In addition to this by not responding to demands to reduce taxes on the part of the CSU the Chancellor maintains the room she has to manoeuvre in the event of a decline in the economic situation. The programme also includes a rise in family allowances as from the third child. The Chancellor has not said how she might finance the tax reductions. The CDU programme also plans for the "development of pensions that guarantees fair and reliable development of wages,
" there is also a suggestion for pensions' savings and for real estate not to weigh so heavily in the calculation of compensation given to the long term unemployed.
On 14th June last the SPD adopted an electoral programme focused on taxation and social measures. It plans to reduce the basic rates of taxation on income and to increase fiscal pressure on the highest incomes. Hence the first tax bracket would rise from 10 to 14%, the highest would rise from 45 to 47% (concerning households which earn over 250,000€-125,000€ for a single person). It is supporting the establishment of a minimum wage (7.50€/hour) in all professional branches and wants to introduce a tax on transactions undertaken in the stock exchange the revenue of which would be dedicated to investments in sectors such as education and training. The party has set itself the goal of reducing the number of unqualified high school leavers by 10% per year. "We think that in the present situation a reduction in the role of the State and pressurizing the social protection system is not a responsible attitude,
" indicates Frank-Walter Steinmeier. In their programme the social democrats repeat their commitment to abandoning nuclear power and to closing all power stations by 2021. They say they support the building of new gas and coal power stations and the development of sustainable energy sources. However they have abandoned the idea of the semi-privatisation of the national rail company, Deutsche Bahn – during the upcoming legislature at least.
Having abandoned all electoral agreement with Die Linke nationally the SPD says it is open to cooperation with the Greens and the FDP, two parties it needs if it hopes to govern. "A programme to raise taxes? Not with me at any price. On this basis there can be no agreement with us,
" says Guido Westerwelle when interviewed about a possible government coalition rallying the FDP and the SDP. The FDP leader indicated that he would say with which parties he wanted to form a government just one week before the election.
On 18th October last the SPD congress appointed Frank-Walter Steinmeier as its candidate for the Chancellorship – 469 votes in favour, 15 against and 9 abstentions. No other person ran for the position. Originally from East Westphalia (North Rhine Westphalia) and from the rightwing of the SPD Frank-Walter Steinmeier, 53, has an atypical profile. Indeed this civil servant, the former right-hand man to Gerhard Schröder has never been elected nor occupied a high level post within the SPD (he became the party's deputy chairman in October 2007 only) or in government. "I took other paths,
" he says. His name is linked to the 2010 Agenda, a programme of socio-economic reform established by Gerhard Schröder, which he helped draw up. Frank-Walter Steinmeier hopes to be elected in Kirchmöser in Brandenburg on 27th September.
"Our time has come. No one other than us can provide better answers to today's challenges,
" declared the SPD leader, Franz Müntefering showing his confidence that the economic crisis could only benefit the left opposition. "We are at the dawn of a new era. The turbulence we are experiencing is comparable to that of the fall of the Berlin Wall in 1989. It was the rules of ultra-liberalism launched by Margaret Thatcher and Ronald Reagan that led to this big-bang,
" stressed Frank-Walter Steinmeier. He received a standing ovation at his party's congress when recalled Gerhard Schröder's opposition to the Iraq war in 2003. "At certain vital times, we have provided the right answers. This is still true today,
" he maintained.
At the beginning of August Frank-Walter Steinmeier published his Germany Plan. This plans for full employment by 2020 and the creation of four million jobs by that date (2 million in traditional industries – car, machine-tools and chemical – one million in alternative energies, 500,000 in the healthcare sector and personal domestic aid and 500,000 in the creative economy – culture and the internet). His political rivals on the left and the right have criticized these proposals. "It is a desperate attempt to position them in an economic area where the CDU is considered by many voters as being more competent,
" analyses political expert Peter Lösche. On 16th August last Frank-Walter Steinmeier was quick to accuse Chancellor Angela Merkel of intellectual dishonesty. "Again she has promised tax reductions that will not occur. The CDU does not say before the election what it intends to do afterwards. I consider honesty differently,
" he declared on the TV channel ARD. However as Rudolf Korte, political analyst says, "By standing as the moderator of the grand coalition Angela Merkel knows how to make it difficult to attack her.
"Although the left is weakened in these general elections it will not be held up by the policy put forward by the neo-liberal bloc,
" said Oskar Lafontaine during Die Linke congress on 22nd June last in Berlin. "Only a strong left can prevent the deterioration in the living standards of workers, pensioners and those who receive social aid,
" he added. To achieve this Die Linke adopted an electoral programme that plans for the establishment of a minimum wage of 10€/hour, an increase in social investments (for example a 50% rise in compensation received by long term unemployed, the grant of 100 billion € to the health, environment and education sectors as well as to infrastructures and 100 billion € to help companies develop social and environmental programmes etc ...), a reduction in taxes for the poorest and the introduction of new taxes for the wealthiest. In terms of foreign policy the party, which is against the Lisbon Treaty, is demanding the departure of German troops from Afghanistan, the end of all deployment of the German army across the world and the replacement of NATO by a collective security system that Russia can take part in.
The Grand Coalition's Results
Like many European countries Germany is experiencing its worst recession since the Second World War. In 2009 the GDP growth rate is due to decline by 6%, unemployment may rise above the 4 million mark (in July 2009 it lay at 8.3% of the working population) and the public deficit is due to rise beyond 6% of the GDP. The State is due to increase its debt by 86.1 billion €, a level not reached since 1945.
The government has worked hard over the last few years to bring unemployment down and to balance the country's public finances before witnessing the destruction of most of its effort by the world economic crisis. Angela Merkel hesitated for a long time before taking the first steps to fight against the most severe effects of the crisis; the Chancellor was loathed to put in peril the work undertaken by the grand coalition and social players and also the return to financial equilibrium by launching into ill-considered spending. In the autumn of 2008 the government established a recovery plan for German banks to a total of 480 billion € by allowing the State to take shares in the financial establishments. The State now holds 25% of the Commerzbank, the country's second most important financial establishment.
On several occasions and notably during the G20 summit in London Chancellor Angela Merkel maintained that she wanted a support plan for growth and the defence of employment established EU wide. For his part Frank-Walter Steinmeier said he supported an increase in public investment and the establishment of a European loans programme for SME's. He also called for greater cooperation within the Eurogroup and for the enhancement of dialogue with the European Central Bank. "No State or any economy can overcome the financial crisis and its effects on its own,
" he repeats.
Angela Merkel is against any type of European recovery plan since she is afraid of witnessing the emergence of the "economic government
" of the Union. In effect harmonization of the fight against the economic crisis or that of the national recovery plans would necessarily lead to an increase in community spending, 20% to 25% of which is Germany's responsibility, and which it categorically refuses to pay on behalf of less disciplined countries. In December 2008 Angela Merkel gained approval for a 31 billion € plan over two years. Since many of these loans had already been planned for the real sum devoted to the fight against the economic crisis totals around 5 billion €. "The Germans can count on a government that will behave responsibly and if need be take the necessary emergency measures. Budgetary balance can always be delayed but it is always our goal,
" declared the Chancellor in December 2008.
In January 2009 Angela Merkel achieved the adoption of a second recovery plan to a total of 32 billion € and the acceptance of tax rebate measures. On 6th May the government approved the draft law guaranteeing the upkeep of pensioners' buying power even if wages were lowered (the two go together). At the end of May the Bundestag approved the inclusion in the Fundamental Law of a mechanism designed to slow the State's debt. The latter will witness a reduction in its room to manœuvre as from 2016, when a deficit over 0.35% of the GDP will no longer be allowed. In addition to this as from 2020 the Länder will no longer be allowed to take out new loans except if there is a major economic recession or a natural disaster.
The Chancellor recently released 4.5 billion € in public aid to save Opel, a subsidiary of General Motors which has found itself in serious financial trouble over the last few months. The company is due to be taken over by the Canadian Magna, i.e. by the Belgian investment fund RHJ International. Angela Merkel refused aid from the Arcandor group believing that the problems it was encountering were due to poor management and that this had started well before the economic crisis. The Chancellor believes that saving Opel has to be an exception. Frank-Walter Steinmeier repeats that the government must be prepared to save jobs.
The latest figures released by the Federal Statistics Office on 13th August last reveal a 0.3% growth in the German GDP between April and June 2009 after 4 consecutive quarters of decline and a 7% increase in exports in June, a figure that has not been achieved since September 2006. "For the time being the labour market has demonstrated solidity notably thanks to the employment of the new measure of partial unemployment. But the recovery of growth is likely to be timid and industrial production is still low. Many companies will not be able to survive without laying off some employees,
" indicates Christian Dreger of the Economic Research Institute in Berlin (DIW).
Angela Merkel's government has also reformed access to retirement by deciding that the legal age to take retirement established at present at 65, will rise progressively by one month per year as from 2012 and by two months per year as from 2024. The retirement age will be 67 in 2029. It also finalised the reform of federalism and the redistribution of competences between the federal State and the Länder. Federalism that for a long time was considered vital to Germany's economic success has over time become synonymous to paralysis; there has been an increase in power on the part of the Bundesrat which too often allowed it to prevent the government's work. Hence the share of federal laws demanding the agreement of the majority of the Upper Chamber of Parliament – equal to 10% 50 years ago has risen to 60%. From now on this percentage will not be more than 40% and the Bundesrat's agreement will only be required with regard to draft laws that demand the financial participation of the Länder. The reform of federalism includes in exchange the enhancement of the regions' powers with regard to education and training. Another change will be that the Länder will be responsible for regulating the application of prison sentences and they will have the power to establish the level of civil servants' remuneration.
Another sector in which the government has innovated is family policy. Ursula von der Leyen (CDU), Minister for the Family, the Elderly, Women and Youth, the second most popular woman in the country after the Chancellor, has done a great deal to encourage the German birth rate, the weakest in the entire EU (according to a Eurostat survey in August 2009 the fertility rate of German women had declined and at present lay at 8.2 children for 1,000 women). For a long time women were restricted to what is called the 3K's system in Germany (Kinder, Küche, Kirche, children, kitchen, church) which did not allow them to associate both career and motherhood.
Ursula von der Leyen, a doctor and mother of 7 children established parental leave of 14 months in January 2007 thereby enabling one parent to stay at home to look after a child and receive payment of up to 67% net of their previous salary (minimum 300 € and maximum 1,800 €). If the second parent takes over after one year the parental leave can be extended by 2 months. 3 billion € were also released to open 500,000 nursery places by 2013. Finally primary schools are now open all day in Germany.
The traditional formation of a coalition rallying "a big party
" and a "small party
" has seen its day. "The traditional model that we have known for half a century with a big party supported by a smaller one to create a majority may disappear. It is not totally impossible that it will become increasingly unlikely,
" says Oskar Niedermayer of the Free University of Berlin. The country has five political parties that well established nationally, a formula which creates a problem and even condemns in both the long and short term the two-party system and that of political alternation which Germany has known over the last 60 years.
3 different government coalitions seem likely. The first, a traditional one would bring the CDU and the FDP together. The second would rally three partners: the CDU (or the SPD) with the FDP and the Greens. Ideologically this is far from obvious. Finally the third which no one want but may be the only solution (consider Austria in the last election on 28th September 2008) would be the re-election of the present grand coalition.
Just one month before the general elections on 27th September all the polls forecast victory for the CDU. This together with the CSU is credited with around 37% of the vote, the SPD with 22%, the FDP 14%, the Greens 12% and Die Linke 10%. An Emnid survey indicates that 83% of the Germans believe in the re-election of Angela Merkel as Chancellor, only 9% think that it will be Frank-Walter Steinmeier. "We have not seen such a popularity level for a Chancellor in decades,
" stresses Klaus-Peter Schöppner of Emnid. "And we have never seen an SPD at such a low ebb nor have we recorded such a low rate of confidence amongst its members,
" he adds. At a month before the election the Germans are extremely reticent about choosing a new Chancellor.