8 September 2017

On 24 September, Germans will elect a new federal government. Current polls give Angela Merkel and her Christian Democrats (the CDU, and their sister party the CSU) 39% – a comfortable lead of 15% over her current coalition partner and prime electoral competitor, the Social Democrats (SPD) – yet too little to govern alone. While Merkel has ruled out the far-left (Die Linke) and far-right Alternative for Germany (AfD) as possible coalition partners, she has refused to declare which partner she would favour between the SPD, the Greens, and the Free Democrats (FDP). Under Germany’s electoral system, coalitions are all but inevitable.

Whomever she picks, her coalition partner(s) will inevitably influence her government, including its stance on Europe and Brexit negotiations. So far, the CDU has kept a strict line on Brexit. It has prioritised the integrity of the single market, the rights of EU citizens in the UK, and the continued unity of the remaining EU27. It is unlikely to abandon these goals. Once the terms of British departure are sufficiently clarified, however, the CDU will need to establish more concrete positions on how it sees the future relationship between Europe, Germany and the UK. It will need to agree these positions with its coalition partner. Between free trade-sceptical Greens, Euro-federalist SPD, and business-friendly FDP, the UK should carefully watch the election results and the coalition building process.

British-minded free democrats?

The best likely outcome the UK can hope for would be a coalition of the CDU/CSU and Free Democrats (FDP). There have already been eight such coalitions at federal level since 1949, and with recent polls putting their combined vote share at 46-49%, it is entirely an realistic possibility.

The FDP’s leader, Christian Lindner, has warned against punishing the UK during Brexit negotiations. Germany has “an interest in a strong and economically prosperous Great Britain,” he emphasised in June, adding that a weakened UK would also leave Europe worse off. Michael Theurer, currently an MEP but poised to move into the German parliament as the FDP’s economics chief, even proposed the creation of a special ‘Brexit Cabinet’ better to safeguard German economic interests with Britain during the Brexit negotiations. Describing his own party as “very British-minded” and “in favour of free trade and market economics” in an interview with The Sunday Telegraph, Theurer stressed the need for a strong Britain as a partner for both the EU and NATO.

Having the FDP in the German government would also mean a stronger voice in the Brexit negotiations for German business, the sector that has most to lose from a punitive Brexit deal. While the FDP would have to compromise as junior partner in such a coalition, its Brexit-proposals could find favour with the CDU’s own business-friendly wing (and particularly the Bavarian CSU). Moreover, as it is common for junior coalition partners to occupy the ministry of foreign affairs, this could put the FDP in an influential position.

Jamaica and the Greens

Despite their origins as a left-wing environmentalist party, the Greens (currently polling at 8%) have moved increasingly to the centre of Germany’s political landscape and have become a realistic coalition partner for the CDU/CSU. Since 2008, they have formed six governing coalitions with the CDU at Länder (state) level, two of which also involved the FDP. A possible coalition of the CDU/CSU, FDP and Greens, dubbed a Jamaica Coalition given their combined party colours, has repeatedly been floated in public debate. However, tensions between Merkel’s Bavarian ally the CSU and the Greens over migration would make such a coalition difficult.

The Greens could prove disadvantageous to the UK, particularly regarding the negotiation of a post-Brexit trade relationship. The Greens strongly oppose trade agreements including TTIP, CETA and JEEPA, as well as the Trade in Services Agreement (TiSA), due to concerns over social and environmental protections, and democratic accountability. Similar concerns are likely to be raised during trade negotiations between the EU and UK.

The Schulz factor

Although Merkel is now far ahead in the polls, Martin Schulz and his SPD are still in the running. Nonetheless, the possibility of ‘Merkel-Dämmerung’ – the downfall of the chancellor who has already led Germany for a dozen years – seems diminished. Back in the spring, Martin Schulz was being talked up. Yet he has failed to gain momentum. In the televised debates this week between the two principal candidates he failed to change the weather. On many issues, the two candidates agreed, and, on the migration/refugee question, Schulz’s main attack was that Merkel should have consulted more with European partners.

His party, the Social Democrats, are sceptical of joining another ‘grand coalition’ as the junior member, blaming coalition for the SPD’s stark decline in popularity over the last four years. (A problem familiar to British Liberal Democrats). Schulz himself is a seasoned Euro-federalist and former president of the European Parliament. He takes a hard position on Brexit, and will not want to be seen giving any ground to London. Under him, the SPD has taken on a visibly more pro-European attitude than the CDU, a position that is likely to manifest itself in future negotiations.

The possible outcome which would make Germany the most difficult negotiation partner for the UK is, fortunately, also the least likely: an entirely leftist coalition of the SPD, Greens and Die Linke, generally referred to as red-red-green or R2G. This is currently polling at 39-41%. This scenario would only be possible if the CDU fails to form a government, and the SPD and Greens overcome their hesitations against federal coalitions with far-left Die Linke. (There have been some such coalitions at state-level, but many voters, particularly in West Germany, remain neuralgic about bringing the far-left into power. The SPD would be wary about such a coalition, fearing long-term damage).

Much ado about nothing?

Will the German elections really make that much difference to Brexit negotiations? Many have pointed to Berlin’s core interest of keeping the EU politically and economically united. And it is true that, as long as the German government is centred on either the CDU or SPD, the country will identify its national interests in accordance with the European project.

Brexit is not a major electoral issue in Germany – and was not raised during the Merkel/Schulz debate. Yet Merkel will have known that making any concession towards the UK in the run up to the election would have left her vulnerable to an attack from Schulz. If Germany does decide to push the Commission and the other EU Member States to cut a deal, expect it after Merkel is returned as chancellor. Perhaps Merkel will push for a rapid transition to parallel negotiations, something she advocated back in July 2016. Germany has so far let the Commission do the running on the Brexit negotiations. After the distractions of electioneering and coalition formation are over, it will be time for the EU27’s prime economic powerhouse and political heavyweight to get back involved. The question of the future relationship between Britain and Europe is too important to leave to bureaucrats in Brussels. Germany’s role in shaping the agreement between the UK and EU will be crucial. While different coalition partners may tip the balance in favour or against the UK, ultimately it’s unlikely to shift the general direction of Brexit negotiations significantly, unless there’s a major upset.