Who’s Blinking First?

Despite appearances, and for all the stalemate it produced, yesterday’s German election has certainly confirmed that Germans are neither too afraid of change, nor too scared of instability. In fact, they chose both.

We don’t know who will blink first – so it seems like a good moment for some reflections. Yesterday’s election aftermath was truly impressive. Usually at least the demoscopes at Forschungsgruppe Wahlen are so reliable that there’s no news after 6pm, when they announce their exit poll result. But last night was different. Even the usually dull and predictable party-leaders’ post election debate – the so-called ‘elephants roundtable’ – was so much fun someone should sell it on DVD.

There was the continuously smug, press-bashing comeback-kid Schröder, arrogantly beaming to the extent that Arno Widmann wonders in the Berliner Zeitung if he was actually on drugs (English version courtesy of www.signandsight.com, they also have an English review of initial German press reactions). There was the blank stare on Angie Merkel’s suddenly even paler face when Schröder said he wouldn’t mind a grand coalition, just not with her. There was the overly angry F.D.P. chairman Guido Westerwelle, who had realized he would probably never become a minister, knowing that the odds of him still running the show in four years aren’t too good. What a contrast was the calm, almost stoic (inofficial) Green leader Joschka Fischer, probably the only one who got what he expected yesterday. There were Edmund Stoiber’s vain attempts to declare the political custom (normally a political imperative) of the biggest coalition forming group’s leader becoming Chancellor to be a constitutional reality.

It was a little like that moment in a club, when the bright light is turned on at the end of the night, and you can actually see what the people around look like. Exhausted, sweaty, trying to look as good as in the dark, but knowing it won’t work.

I attended most election headquarter parties after the 1994 and 1998 elections, when they still took place in Bonn. The tiny PDS (now Linkspartei.PDS) party in 1994 was the best; they offered great home-made noodle salad, while the F.D.P. served chicken wings in their car park. The Greens were too serious to celebrate, and too capitalist not to charge for the beer. At least the wine in the CDU’s “Adenauer-Stuben” was decent when the old man from Oggersheim was still Chancellor, while the pre-Schröder SPD never cared about catering anything non-red: never try eating blood-sausage by the spoon in the dark, expecting it to taste like mousse-au-chocolat. I wish it had been as exciting back then – I might have more interesting stories to tell than the recipes above.

Clearly, electoral systems aiming to proportionally represent the votes cast can, even with institutional safeguards like the German 5% threshold for Parliamentary representation, produce situations like the one Germany is experiencing right now. And, of course, it is far too early to predict if Oskar Lafontaine’s strategic move to unite the frustated West German loony left with the somewhat transformed, yet similarly frustrated, former East German ruling party will lastingly change the German party system. But their impressive showing at the polls, just as the Merkel’s/the CDU/CSU’s – largely self-inflicted – weakness shows on the one hand that German’s aren’t too afraid of experiments in general. Of course, it also shows that they are still apprehensive with respect to radical experiments with Germany’s institutional structure.

While the social discourse is advancing quickly, and this campaign has very likely led to an acceptance of the “Agenda 2010/Hartz IV” reforms as new status-quo, those who, like Andrea Seibel in today’s leading op-ed in the conservative Die Welt, are engaging in some kind of voter bashing and are still calling for a German Reagan or Thatcher, are not getting it: German voters have found a rather creative way of stating that, yes, they want change, and more change than was politically possible so far. But they do not want to risk social cohesion. Interestingly, about a year ago, Berkeley’s Beverly Crawford published her vision of Germany 2015, 9 years after Merkel took office, and she predicted that the biggest disappointment of a Merkel chancellorship would be Germany losing its social cohesion.

But just as so many, even within the parties proposing radical change, it seems that German voters are wary of transplanting something they have a hunch will not work properly in Germany. Thus, yesterday’s result is not a denial of reality of the need for economic reforms, it is a declaration of the people’s conviction that Ronald Coase was right when he claimed that institutions matter for economic results. Besides – appropriately – Germans have chosen their national election to make that point instead of a European constitutional referendum…

The political has indeed been returned to politics. And, interestingly, Gerhard Schröder may have succeeded in teaching his party the lesson that that governing is not something one simply throws away when it becomes unpleasant. If he gets through with this, and remains Chancellor, he might be an even smarter politician than he himself must believe. It would just be very sad for Angie.

We’ll find out soon.

29 thoughts on “Who’s Blinking First?

  1. We don’t know who will blink first

    Why do you think that anybody has an interest in blinking at all? Schröder is smelling the blood in the water and the CDU has nothing to lose in the next round.

  2. Thus, yesterday’s result is not a denial of reality of the need for economic reforms,

    So do people want a watered down reform? Or are there several possible kinds of reform? That what is called the Northern Model? Ore something else entirely? Protectionism? I see just questions, no answers.

  3. Tobias, Edward, Mrs. T., Oliver, and other commenters: I’m interesting in hearing more views and opinions about the Free Democrats.

    http://en.wikipedia.org/wiki/Free_Democratic_Party_of_Germany

    In the mainstream outside press, not terribly much has been written about them, yet it seems that their gain is perhaps the second-biggest news of the election, the first biggest news being the likelihood of gridlock.

    In both of the oddball non-grand-coalition scenarios put forward so far (“Jamaica” and “Traffic Light”), FDP and the Greens are the king-makers. I’m curious which is the more unlikely pairing – FDP and SDP, or FDP and Greens?

    It’s easy to call a party “liberal (in the classical sense)” or “pro-business” or “pro-free-market.” In fact, pro-business does not always mean pro-market. In the Czech Republic, for instance, I would classify Vaclav Klaus Civic Democrats (ODS) as pro-business, but hardly not pro-market given their penchant for cronyism. I might also say the same thing about George Bush.

    Any thoughts on how Westerwelle and Co. fall here?

  4. I disagree with the overall impressions in the post. Schröder has destroyed his government for nothing (as the economy might well improve until 2006, he would have had better chances then). What can his party learn from him therefore? You seem to believe, like Schröder himself, that he will remain Chancellor. Very little points in that direction. Dresden 1 will not change the ranking between CDU/CSU and SPD, FDP will not support Schröder, Left Party will not vote for him as Chancellor. Which of these three obstacles do you expect to be overturned?

  5. @ georg

    “Which of these three obstacles do you expect to be overturned?”

    I suspect it’s this one:

    “FDP will not support Schröder”

    “What can his party learn from him therefore?”

    Well on one view he just shunted his left-wing critics off to Linke, where they may remain for some years, and he is now about to (willingly I suspect) have his arm twisted by the FDP. So he could have gained a lot, and putting it all together like this he might buy some tolerance in the upper house. You see, otherwise he could always threaten them with a ‘grand coalition’, and, if they refuse, more elections.

    I’m warming to him. Not personally, but as a strategist. Of course all this does depend on the idea that really he is convinced of reform, and that his issue is how to carry his party. I think it was a recent article in the FT about him and Heinrich von Pierer that started me thinking about this.

    “Besides – appropriately – Germans have chosen their national election to make that point instead of a European constitutional referendum…”

    Yes, I like this one :).

  6. I confess I completely missed Mrs T’s previous post on this topic as I was pre-occupied when she wrote it last week. Thanks. Still interested in what others think, now that the results are in…

  7. Scott,

    whether Ampel or Jamaica, squeezing Greens and FDP into a single government will be hard. In Focus, Greens leader Reinhard Bütikofer said that his party is willing to talk to abybody about a coalition, but governing with the FDP would be highly unlikely unless the FDP ‘reinvent themslves.’ (Meanwhile, as the same article points out, Union leaders are suddenly dicovering that they have an awful lot in common with the Greens….)

    Though SPD are ideologically farther from FD than are the Greens, the liberals have fewer problems with the SPD and have in fact even governed in coalition with them.

  8. Despite the above, Guido Westerwelle (FDP) has been making goo-goo eyes at the Greens. After a fashion, anyway: he wonders aloud whether there’s any party out there that might like to be ‘helpful’ by enabling the Union and the FDP to govern.

    BTW, I wondered whether Ede Stoiber’s slagging off the easterners was calculated sand in Merkel’s gears, intended to leave Stoiber better placed to lead the Union. Maybe, but if so he would seem to have miscalcuated badly. His own party, the CSU, did very badly by its (admittedly unusual) standards, falling below the 50% mark in Bavaria for the first time in years. The Bavarian avatar of the Union is now the smallest party in the Bundestag, behind FDP, Green and Left; Stoiber’s goal was to be third-largest after SPD and the CDU. According to Spiegel, Stoiber might be in a bit of trouble.

  9. There are 8 (mathematically) possible coalitions.

    1. Black- red (Chancellor: Merkel). Ruled out by SPD.
    2. Red- black (Schröder). Ruled out by CDU/CSU.
    3. Traffic light (Schröder). Ruled out by FDP.
    4. Red- Green- Redder (Schröder). Ruled out by all.
    5. Red- Yellow- Redder (Schröder). Unthinkable.
    6. Jamaica (Merkel). Ruled out by the Greens.
    7. Black- Green- Redder (Merkel). Unthinkable.
    8. Black- Yellow- Redder (Merkel). Unthinkable.

    There are only 4 possible scenarios beside this.
    1. “Divided chancellorship ´´: Schröder and Merkel having two years each. Unthinkable.
    2. “The unknown third ´´: another chancellor, perhaps Wolfgang Clement, gets SPD and CDU/CSU together. Unthinkable.
    3. “Coup ´´: Some party leaders are ousted, making new coalitions possible. If Westerwelle goes, the traffic light became possible, but he got the best result for the FDP since decades.´ If Fischer decided to do “Jamaica ´´, the Greens would split. So, can Stoiber and Koch maybe oust Merkel or can Schröder be outdone by another SPD leader even now? Unthinkable.
    4. “Minority government ´´. Ruled out by all (so far).
    5. New elections. Seems not likely so far, but if you look closely, it might be the only way out of this mess.

    Confused? We all are.

  10. views and opinions about the Free Democrats.

    It fails to mention that it is the classical representation of the self employed and owners of small business. And that it has an old power base in the southwest.

  11. “opinions about the Free Democrats”
    They are the business party par excellence. They are also short on politicians with potential. Some of the comments Mrs. T. made probably do not apply to the FDP of today, but the fact remains that the FDP is the chameleon among German parties. After the war, it was home to lots of Nazis – there is an old joke to the effect that the question was whether to leave for Argentina or become an FDP member -; 20 years later, they changed the face of the republic by supporting Willy Brandt´s ostpolitik. A decade later, they did it again by ousting Helmut Schmidt.
    However, in 1998 it was Joschka Fischer´s turn to become kingmaker.
    The FDP is not likely to have much impact on things other than shopping hours, civil rights and immigration laws (issues which aren´t going to be genuine election winners and which they mostly can´t even claim prior art on anyway.)
    A Bavarian political science professor argued that the Left had won the election because of its broader offering, suggesting that the right should deploy a third party, too. That would have to be the CSU. The FDP has fortunately run out of parachutists now. This logic is deeply flawed, however: the left narrowly lost the election because of its disunity rather than winning it. The SPD is praying daily for the CSU to commit suicide by following such stupid “more is better”-advice.

    I´m absolutely certain that one of the three smaller parties will not survive as a viable concern until the end of the decade. I just don´t know which one – all of them are vulnerable.

    1) Lafontaine will disappear if the SPD decides to push only for those “hard” reforms that are necessary – i.e., raising the retirement age – and combines them with those “friendly” reforms it has committed itself to anyway – more childcare support, e.g. If Schröder doesn´t realize this, then he is a tactician and not a strategist.

    2) The Greens and the FDP are in competition for the kingmaker slot. Since this is basically a question of manouevering skills, I´m not sure who will succeed – Fischer or Westerwelle. I am not volunteering a guess here, because I have been wrong about people before. Westerwelle does remind
    me of the American Republicans´ preference for actors in politics, but he will never be able to play the “family values”-card. There isn´t any single issue in sight right now that he could establish a monopoly on (other than pro-business extremism). Thus the Greens should be at an advantage: they quietly rediscovered the market niche that the shrinking left wing of the FDP used to occupy.

    BTW, one of the things that weren´t noticed much was an interview given by the head of Germany´s equivalent to the EPA – a former Merkel protégé – who didn´t exactly wax enthusiastic about the energy policy proposals of the B/Y camp. B/Y won the election so narrowly because they really messed up on issues rather than in beauty contest-terms.

  12. 6. Jamaica (Merkel). Ruled out by the Greens.

    Not ruled out. Judged to be so hard that it is nearly impossible. Which is not quite the same thing. It means that it will be tried. Thus the pressure on both, Merkel and Schröder to yield on the grand coalition is removed.
    Of course Fischer is no fool. If he thinks that it is too hard, he’s probably right.

    4. “Minority government ´´. Ruled out by all (so far).

    Köhler would not go for it.

  13. rediscovered the market niche that the shrinking left wing of the FDP used to occupy

    The Green party sits there.

    If all you want is a niche, the liberals could survive. Gay rights, no draft, free university tutition, no to biometrics, financial privacy, legalise the weed, …
    It can be done, if they really wanted.

  14. If there are new elections, is it likely that they will produce a substantially different outcome?

  15. If there are new elections, is it likely that they will produce a substantially different outcome?

    Well, if you still believe the pollsters, the results are going to be much the same. But then I doubt we will see a repeat of Schröder vs. Merkel, and with different people, all bets are off.

  16. I for one cannot see any reason to believe that the “Jamaican coalition” would be any easier or more likely than the “traffic light coalition”. After all, the main argument against the traffic light option is that the Greens and the FDP disagree.

    Presumably they would still disagree with the FDP if the other party involved was the CDU. And the Greens would have to agree with two parties who they disagree with on principle, and do so enough to make it worth quitting Red-Green and their perceived achievements in government. If they were to join the CDFDUP, they would be constrained to adapt to the CDU, not the other way round.

    With the traffic light option, the Greens would be in the position of setting the bounds of what the FDP would have to agree with. And the FDP would be joining a government with the SPD – which they have done many times before.

  17. worth quitting Red-Green and their perceived achievements in government

    Why? There is nothing to quit left. It is that or an unknown future. Plus, if the left party is here to stay, there will be great difficulty in forming red green ever more.

    reason to believe that the “Jamaican coalition” would be any easier

    How about one party leader having called the other a gloating dimwit? Also note that the Green party had not committed to the SPD. Nor the other way round. That doesn’t mean it is likely. It just means that it isn’t impossible.

  18. “I for one cannot see any reason to believe that the “Jamaican coalition” would be any easier or more likely than the “traffic light coalition”.”

    I agree, I find Jamaica hard to see. Especially when Joschka Fischer is saying “Can you really see Angela Merkel and Edmund Stoiber [the leader of the CDU’s Bavarian sister party, the CSU] sitting round the table in dreadlocks? This is more our style. It’s impossible. I don’t see that.”

    I still give slight odds to the traffic light. I think it’s easier to see an SPD disencumbered of its left going in the direction of the FDP and EU Commission on economic reform than it is to see Merkel and Stoiber accepting ‘social liberalism’ on the kind of questions that matter to the Greens.

    I do think that the FDP and the greens have a big interest in avoiding new elections, and in avoiding a grand coalition. I don’t think either of these outcomes will improve their position.

  19. I still give slight odds to the traffic light. I think it’s easier to see an SPD disencumbered of its left

    It is anything but disencumbered. It is in mortal peril from the left. There is a permanent threat from the left now, as the SED is more and more a thing from the past.

  20. Oliver,

    >There is a permanent threat from the left now

    I suppose it remains to be seen if they will be able to get so many votes in the west again. I don’t think it’s possible to say that the party system has changed yet. The PDS is still largely an east German phenomenon.

    >Why do you think that anybody has an interest in >blinking at all? Schröder is smelling the blood >in the water and the CDU has nothing to lose in >the next round.

    Aside from the fact that the parties will not be interested in demonstrating that the German institutions are unable to deal with the current divisions, and that would put the country through an awful lot, listen to all the bollocks being written about “Weimar” already (there, I said it, too), I’m not sure the CDU has nothing to lose in the next round. Look what happened in the last two weeks. I’m not sure they’re willing to risk another election. Not they would fair much worse (the F.D.P. likely would though). Given some time, I’m not sure they will not convince Merkel that stepping down would serve the country (and the state premiers’ interest) best.

    I hear all the talk about Jamaica. Yet I have a hard time believing the CDU and the Greens could make this work. Still, I’d like this version from a civil rights point of view.

    >So do people want a watered down reform? Or are >there several possible kinds of reform? That what >is called the Northern Model? Ore something else >entirely? Protectionism? I see just questions, no >answers.

    While all this is largely a discussion about labels whose content no one really knows anything about, I think it has become apparent that voters are looking for more predictability in reforms. That would have been rather difficult with what would have happened under a Merkel/Westerwelle coalition. I see operational questions, but a fundamental answer.

  21. What an interesting discussion!

    Mrs T wrote: “(Meanwhile, as the same article points out, Union leaders are suddenly dicovering that they have an awful lot in common with the Greens….)”

    Yes, but the article was rather vague as to how this was the case.

    – Question: So both FDP and Greens say the other must “reinvent themselves” to share power. How would each have to budge, and what common ground would it be necessary to emphasize?

    Oliver:

    “How about one party leader having called the other a gloating dimwit?”

    Indeed! From what I’ve seen, Westerwelle’s rejection of the SocDems does seem more strident than most of the other (myriad) rejections seen thus far.

    I think the Google translation of the Spiegel article sums it best:

    ‘Schroeder showed with its “deplorable and embarrassing appearance” in the elephant round that he does not have the format for further chancellor shank.’

    Tell it like it is, Guido!

    Which leads me to another question:

    – Is Schroeder’s personality a hindrance to forming a coalition with the FDP (and other parties), or is it more SDP’s current policy/ideology?

    Where I come from, somebody that refers to themselves in the third person (i.e. “Gerhard Schroeder will be Germany’s next chancellor!” said Gerhard Schroeder – not an exact quote) would generally be seen as an arrogant jackass, the company of whom should be avoided at all costs. (Bob Dole excluded, for some reason; I think it’s all in the name.)

    The irony would be rich, since in popular terms, it was always Schroeder’s slick image that was portrayed as SDP’s biggest asset.

    – Finally, any opinions on which coalition (grand, traffic-light, Jamaica) would be the least gridlock-y?

  22. What earthly reason would the Greens have for joining a “Jamaica”? They’d have to ditch a)denuclearisation, b)renewable energy, c)Turkish EU membership, d)feminism, and e) opposition to the Iraq war – which leaves what exactly surviving from their platform? And abandon their remaining claim to be the heirs of the alternative left by leaping into bed with the CDU/CSU Grey Men. The cultural chasm between the Greens and the CSU is gigantic, far greater than that between the FDP and the SPD.

    Whatever Guido Westerwelle said on election night is of secondary importance – SPD/FDP/Green is no more ruled out than CDU/FDP/Green (Fischer ruled it out) or SPD/CDU (both Schröder and Merkel have done so in practice by demanding the chancellorship, and Merkel has done so in as many words). But everyone talks as if Joschka’s rule-out wasn’t a rule-out although everyone else’s is. Bizarrely, people seem to assume that the Greens will behave like the FDP and the FDP will behave like the Greens.

  23. I don’t think it’s possible to say that the party system has changed yet.

    Yes, come Rheinland-Pfalz in spring we will know. However, the SPD has to prevent that. The have to treat them like a grave danger now while still something may be done.

    the German institutions are unable to deal with the current divisions

    In a way they are and there’s no hiding that. From this result no good government will come. The public knows and is unhappy. There’s a choice between a bad government collapsing two years hence and a quick dissolution. Long lingering lesser pain or a sharp jab? It boils down to that. Proportional representation has this fundamental weakness.

    I’m not sure the CDU has nothing to lose in the next round. Look what happened in the last two weeks.

    The future is fundamentally uncertain. If they can get a grand coaltion, they’ll probably take it. But it does not look that way. What else is there to lose vs. a decent chance?
    Additionally, the CDU’s loss would be the SPD’s gain. Red/Green is dead, no matter what. But the SPD is only three seats behind. There is a chance that Schröder could make the CDU/CSU eat its own words about chancellorship in a grand coalition if it comes to new elections. Schröder didn’t want to rule with the Greens, an Ampel would be worse. A grand coaltion on his terms is his dream. If this Jamaica thing collapses, as is likely. He has the power to force a new go at it.

    the F.D.P. likely would though

    Why? They demonstrated spine for the first time in decades.

    I’m not sure they will not convince Merkel that stepping down would serve the country

    They will dump her in a second and gladly if they have anything to gain. But the SPD does not object to Merkel. They want Schröder. And the reason they have given would damage the fundamental union between CDU and CSU. After that they need to demand the chancellorship, no matter what.

    more predictability in reforms

    How? Predictability by announcing cuts has backfired.

  24. a)denuclearisation – few plants relevant to 2009 anyway

    b)renewable energy – partially – compensated by coal subsidies and commuters’ subsidies

    c)Turkish EU membership – it is a tough world

    d)feminism – the FDP is on their side

    e) opposition to the Iraq war – CDU wants to forget that embarrasment anyway

    The sheer feel of it is still wrong. But not enough to reject it out of hand.

    Why do you suppose that the president will further such three party ideas by giving negotiations any more time than he is required to? He strikes me as a man who likes it decisively. I guess he will set the procedure in motion as soon as constitutional.

  25. For readers with the German, among articulate German Green bloggers, Joachim Raschke makes the case for Jamaica here (English excerpts here), and Katja Husen makes the case against it here – see also the comments ;-).

    Alex, you’re dead wrong on this (and I think many people here confuse today’s yuppy-FDP with its Genscher’ian historical self). a) b) d) – as Oliver says. Plus, imagine how desperate the CDU is. c) As Raschke says, a “formula compromise” is possible, since the matter won’t be decided any time soon. And when exactly did Fischer rule Jamaica out after the election?

    Westerwelle has just accused the SPD of sexual harrassment of the FDP and requested an end to that business, and Fischer has announced that he will become a backbencher in the event the Greens go into opposition. Previously he said he won’t serve as a minister under Merkel. An admittedly daring synthesis: ditch Merkel, and welcome Fischer back as foreign minister of Jamaica.

  26. Oliver is right, the FDP are showing more spine than they have in a long time. It’s a pity they’ve chosen this particular instance to show it; a bit of spine would have been welcome in their past dealings with the Union, or even with themselves (vide: the homoeopathic parachutist). There will be much wailing and gnashing of Yellow teeth if there is a grand coalition and the FDP’s surprisingly strong showing turns out to be, as they say, für die Katze. But I don’t see how they can backpedal on the Ampel now without getting rid of Guido; and that would be very hard to do, as Guido can point to that same strong showing under his leadership.

    And no, Fischer hasn’t explicitly ruled Jamaica out. He has made clear, though, that he thinks it a very unlikely outcome, and unlikely to be workable even if it does come about.

    I think Georg is onto something here. (Hmmm… Jamaica under Wulff?) The difficulty with Jamaica will be less the Union than the FDP. Paradoxically, despite their poorer results the Greens have more leverage over the Union than do the FDP (since Guido essentially waived any leverage the FDP might have had). The Union would probably concede quite a lot to the Greens to be able to form a government. I’m not sure how much of that lot the FDP would wear.

    There’s one additional factor, though, that could make for unexpected developments. Both FDP and the Greens want to be in government. But I have the impression that, if it came to that, the Greens would be much readier than the FDP to resign themselves with equanimity to opposition. For the FDP to do as well as they’ve done and then see a grand coalition — that’s got to hurt.

  27. I’m not sure how much of that lot the FDP would wear.

    What would hurt the FDP that much more than the CDU? They wouldn’t have gotten the full free market manifest past the CDU anyway.

    It seems to me that there are three things the FDP really cares about.
    1. Lower rates in exchange for less tax exemptions
    2. Less regulations
    3. hire ‘n’ fire

    Of that #1 is possible with the Greens, #2 partially, maybe even a bit #3

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