Relax, Germany Is Not Facing a State Crisis

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1) A State Crisis? Not Really

There is no question that what Germany has experienced in the past several days is unprecedented. Since the founding of the Federal Republic in 1949, the country has always been led by coalition governments. But negotiations ahead of those coalitions have generally only lasted a couple of weeks. Never before has the country witnessed four parties spend weeks on preliminary discussions only to have one party back out following several sleepless nights of talks.

That is what happened last Sunday night. After more than four weeks of negotiations, the Free Democrats (FDP) threw in the towel, leaving Chancellor Merkel's Christian Democratic (CDU), its Bavarian partner the Christian Social Union (CSU) and the Greens to pick up the pieces. The four-party constellation – known as a "Jamaica coalition" because the colors associated with the parties involved are the same as those on the Jamaican flag – would have been a first at the federal level in German. It was, however, not to be.

But to call it a crisis of state, as some commentators both at home and abroad have done, is rather overblown. There are two options our constitution foresees in such a situation: a minority government or new elections. Neither option, of course, is particularly appealing. But just because the country has never encountered this situation before doesn't mean it is sinking into chaos. There is a clearly defined procedure that will carry us through the coming months – and its outcome is unclear. Nothing more and nothing less.

State institutions will continue to function regardless of whether or not the Free Democrats (FDP) can envision a coalition with the conservatives and the Greens. We have a caretaker government in office, which will take care of the day-to-day, and we are far away from a situation in which citizens begin taking to the streets. Those speaking of a crisis of state should glance eastward at Ukraine, where parts of the state are collapsing before our very eyes. Or perhaps to Poland or Hungary, where governments are surreptitiously dismantling democratic checks and balances.

What Germany is experiencing is a new political reality. Dramatizing the failure of coalition talks risks driving people further away from the political process than they already are. If everything is dramatic, yet nothing in our lives really changes, why should people still be interested in politics? Those speaking now of a crisis of state are only really helping the right-wing populists from the Alternative for Germany (AfD), a party designed to offer a political home to the frustrated.

2) Germany's Disparate Political Landscape

Even if the coalition negotiations didn't collapse until Sunday night, it has been glaringly obvious since the general election on Sept. 24, 2017 that Germany finds itself facing a new political reality. For years, it has been clear that the old majorities – created by pairing the Social Democrats (SPD) with the Greens, or the conservatives with the FDP – no longer work. The arrival of the AfD in the Bundestag, Germany's parliament, has solidified that development. And it doesn't look like the right-wing populists are going to disappear anytime soon. Multi-party coalitions like a Jamaica coalition could become the rule rather than the exception.

The only other option, after all, is a grand coalition, matching Merkel's conservatives with the SPD. It is the same form of government that held power in Austria for decades and which Germany has had for eight of the last 12 years – but it isn't the kind of thing anyone really wants. In hindsight, to be sure, Germany's government didn't perform poorly in the previous four years. Indeed, it managed to implement a handful of political projects. But in the long run, such an alliance between the country's two largest parties merely serves to strengthen the political fringes. That, too, is a lesson from recent years.

(Bad) Luck for Germany

This insight leads to two conclusions. First: Complaints that German political parties are all the same, that they are all situated slightly to the left of center on the political spectrum, could hardly be more mistaken. The four parties that tried in vain to find common ground for a governing coalition essentially represented the entire political spectrum – from the moderate right to the moderate left. They talked, they deliberated, they fought. And the differences between then were sometimes fundamental in nature. But finding compromises has become more difficult in our new political reality – and it requires the kind of courage that the FDP ultimately didn't possess.

Second: This new political landscape is perhaps one for which Angela Merkel isn't suited. "Everywhere in the world, political parties have once again begun valuing political objectives over pragmatism," says German sociologist Heinz Bude. That, though, is not something that Germany's caretaker chancellor is known for.

3. (Bad) Luck for Germany

The failure of the coalition talks could hardly have come at a better time for Germany. The economy has been doing well for years, unemployment continues to shrink and budget surpluses have been climbing. In this year alone, economists believe the German economy will grow by 2 percent. The goal of full employment is considered by many to be realistic and not some naïve fantasy.

In other words, the consequences of months of stasis in Berlin could be rather limited. The reactions shown by Germany's blue-chip stock index, the DAX, and by the euro exchange rate indicate that the prospect of new elections in Germany only briefly startled investors and the rest of the business world. The economy, it would appear, can live just fine with an extended period of political uncertainty. We got lucky.

The problem, though, is that Germany's sound economic situation likely played a significant role in the failure of the talks. There are assets available for distribution, with more than 30 billion euros unspoken for over the next four years, and each party wanted to reward its clientele. The best example is the FDP's obsession with the elimination of the "solidarity tax," a tariff used to help finance the reconstruction of eastern Germany. Is that really the most pressing problem facing the country? Plus, the measure would really only benefit those who earned salaries far higher than average.

A crisis, by contrast, binds people – and political parties – together. It would have been much easier to stitch together a Jamaica coalition in 2009 at the height of the financial crisis. Conversely, that means that when times are good, parties must look beyond their specific clienteles. If that realization doesn't permeate Germany's political leadership, the next coalition talks are going to fail as well.

Plus, it is undeniable that Germany needs an effective government sooner rather than later. Berlin must be able to offer a counter-narrative to rampant populism instead of becoming bogged down in petty party politics. And Europe, too, is chomping at the bit, unable to move ahead without Germany. Immediately following Germany's general election in September, French President Emmanuel Macron unfurled his vision for the EU's future. He is still waiting for an answer from Berlin.

Translated by Charles Hawley