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Analysis
In Germany, fragmentation rules

In Germany, fragmentation rules

Everything in Europe now gets tougher

by David Marsh in London

Mon 25 Sep 2017

From now on, for Angela Merkel – and for Europe – everything gets tougher. In an initial TV post mortem after last night's landmark German election, the German chancellor emphasised the country's widespread challenges, ranging from integrating Islamic refugees and reorganising the diesel industry to reacting to the global policies of the US and China. 

However, the newly intensified fragmentation of German politics, and Merkel's clear difficulties in assembling a cohesive coalition, will greatly complicate the Federal Republic's tasks. She will need more than her slogan last night – 'strength through serenity' – to pull through.

Merkel's victory, presaging a fourth legislative period in power, masks a string of setbacks that will preoccupy her and Germany for months if not years. Demonstrated by the history of her conservative predecessors Konrad Adenauer and Helmut Kohl, who ended their long political careers gravely weakened in 1963 and 1998, fourth terms are habitually deadly for German chancellors.

Well before the final count, Merkel's opponents last night were kindling speculation that she will not complete her fourth period in power, scheduled to run to 2021. 

The Bundestag entry of the anti-immigrant, anti-euro Alternative for Germany (AfD) demolishes an apparent consensus over European policies. The AfD, established in 2013, has become the new third force in German politics. The AfD's surge to a better than expected 13% of the votes – giving it more than 90 seats in the Bundestag – places it behind only Merkel's conservative grouping, the Christian Democratic Union and Christian Social Union, and the Social Democrats (SPD). These have been since 2013 the two constituents of an economically successful but politically lacklustre 'grand coalition' in Berlin.

Germany's two leading parties, which up to German reunification in 1990 habitually accounted for 75%-90% of votes, yesterday scored a combined 54% – the lowest ever. This contrasts with the UK, which has also been affected by fragmentation in recent decades but where the Conservative and Labour parties together polled 82% in the June general election.

The AfD's success marks the first time since the 1950s that a radical right-wing party has achieved a mainstream parliamentary presence in Germany. This will bring a rougher and more nationalistic tone to the parliamentary and media debate over the future of the euro – just at the time when French President Emmanuel Macron is urging Germany to make energetic (and potentially expensive) steps towards enhancing political and economic integration. 

The score of 33% for Merkel's CDU/CSU – down from 41.5% four years ago – demonstrates a significant fall in the chancellor's political credibility. Last night's score represented the conservative grouping's worst federal performance since the first post-war election in 1949. 

Much of Merkel's reduced support is due to personal animosity, particularly in less well-off formerly communist-run eastern Germany, generated by Merkel's high-risk espousal two years ago of a 'welcome culture' for foreigners fleeing trouble spots in the Middle East and Africa. This led to an influx of 1m migrants from conflict regions in 2015. 

Controversy over immigrants has become a powerful rallying point for protest votes from many Germans who feel – like their counterparts in the US, France, the UK and many other countries – cut off from business and political elites such as those epitomised by the Berlin coalition.

Martin Schulz, the SPD leader, who had led an increasingly hopeless bid to unseat the long-lived chancellor, faced an even bigger electoral disappointment, with his party declining to 21% (from 26% in 2013), its lowest in any post-war federal election. 

Schulz declared last night, to the relief of many in his party, that the SPD will go into opposition, almost certainly under new leadership. Merkel's main option, as widely foreseen in recent months, will be to explore a coalition with the liberal Free Democrats, back in parliament after a four year absence, with 11% of the vote, and the Green ecology party, which scored 9%. These parties and the CDU/CSU share some common policies in environmental and industrial fields but differ widely over Europe and economics – a harbinger of fractious coalition building in the months before Christmas. 

In a signal of more acrimonious debate over the euro, Alice Weidel, one of the AfD's two leading candidates, said her party would initiate a parliamentary investigation into 'all the breaches of the law' committed by Merkel – almost certainly indicating an altercation over policies shoring up debtor states in the euro area. 

David Marsh is Managing Director of OMFIF.

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