By Rohit Bhatachaarya

On Tuesday, German Chancellor Angela Merkel remarked that she was prepared to accede to some “painful compromises” as the representatives from her conservative bloc, consisting of her own Christian Democrats (CDU) and its Bavarian sister party, the Christian Social Union, hurriedly negotiated with the centre-left Social Democrats (SPD) to reach a deal to form a coalition government after months of political uncertainty in Germany.

The compromises

“Each of us will have to make painful compromises and I am ready for that,” Merkel told the reporters. Even Martin Schulz, the leader of the SPD, remarked on Tuesday morning that he had “good reason” to believe that the negotiations this time around would finally lead to a fruitful outcome between the two parties.

Both sides had earmarked Tuesday as the “decision day” but were still playing hardball late into the evening regarding a consensus on the reformation of the healthcare system and the employment sector. The SPD promised to “negotiate until the other side squeals” in coalition discussions with Chancellor Angela Merkel’s conservatives. Finally, the SPD relented and agreed to compromise on numerous policy issues on Wednesday.

In the coalition discussions, the SPD was seeking an improvement on agreements clinched during the initial negotiations with the conservatives in January. Four policy subjects were of prime contention—migration, health insurance, employment policy and Europe.

The economy

Merkel’s inability to forge a government together with the SPD even four months after the election has raised the alarm bells among investors. Merkel herself alluded to these politically and economically turbulent times for Germany by referring to the downward spiral of the stock markets in the hours leading up to the finalisation of the coalition agreement. She said that as popular parties, it was the responsibility of the two blocs to form a government that brought welfare and stability to the people.

The two parties have thus far agreed to invest in the construction of new social and private homes by 2021, along with the promotion of high-speed broadband expansion. However, the two major bones of contention are labour rules and healthcare.

The SPD wishes to substitute Germany’s dual public-private healthcare system with a singular universal health insurance scheme. It also wants to abolish short-term employment contracts levied by employers which can be revoked without any justifications. Although the conservatives are in opposition to both these demands, the SPD, which is keen to showcase signs of progress to its supporters, has pledged to its members that it shall strive for reform in these two problem areas on the basis of a blueprint that was formulated along with the conservatives in January.

Insiders embroiled in the negotiations stated that previously discussed proposals, which included the eventual progressive abolishment of Germany’s air transport tax system and an allowance given to companies enabling them to write down digital investments, would find no place in the eventual coalition agreement.

Migration

According to its election manifesto, the SPD wants an open, inclusive and positive policy on refugees. It believes that if a refugee is provided with an asylum in Germany, then they must be provided with proper assistance as well.

The coalition blueprint has capped the number of people who shall be allowed to join their families now living as refugees in Germany at 1000 per month. However, the conservative bloc and the SPD differ on the meaning of “hardship cases,” which refer to those exceptional instances, which shall qualify a person to join their existing family in Germany. The hardship rule remains to be ascertained by the coalition lawmakers.

The Europe scenario

Germany and its allies are even more perturbed by the political turmoil in the country due to the timing of the situation, which clashes with a scenario wherein Europe is facing multiple challenges, ranging from Brexit to the need for a eurozone reform.

The SPD sloganeered last year for “a better and fairer Europe.” Shulz praised an agreement that his party had sealed with the conservatives on Monday which according to him, consisted of the allocation of the investment for the eurozone and an end to forced austerity.

However, Shulz did not specifically mention any plans to lobby for more powers and duties for the European Stability Mechanism, which was previously conceptualised in a coalition blueprint on January 12.

Some conservatives fear that going ahead with the European integration would turn out to be highly expensive for German taxpayers. Such concerns have received further fuel to the fire by former European Central Bank’s chief economist Otmar Issing, who criticised the January coalition blueprint as “a farewell to the idea of an EU aimed at stability.”

The matter of Israel

Both sides also took this opportunity to take an uncharacteristic swipe at Israel over its illegal construction of settlements in Occupied Palestinian Territory (OPT) and the Gaza Strip, as per a draft of the agreement seen by Reuters. However, the draft nevertheless reiterated Israel’s right to exist as an irrefutable prerogative and reaffirmed this stance as a fundamental pillar of German politics.

Multiple German governments have attempted to build strong ties with Israel as a foreign policy priority since the Second World War, which witnessed the genocide of more than six million Jews in Nazi Germany. However, relations between the two countries have been strained in recent years due to Germany’s doubts over Israeli Prime Minister Benjamin Netanyahu’s commitment to the fruition of a two-state solution with Palestine.

Internal politics

Germany has been governed by an interim caretaker government ever since the election held on September 24 last year yielded no clear outcome. Even if the two parties arrive at a consensus over a coalition agreement, the final say will rest with around 464,000 members of the SPD.

The SPD, which had initially promised to rebuild in opposition, has recently witnessed a substantial influx of new members who are hoping to receive a chance to have their voice heard with respect to any coalition agreement. According to the SPD General Secretary Lars Klingbeil, 24,000 new members have joined the organisation since the beginning of the new year.

The SPD’s youth wing strongly opposes the prospect of yet another “grand coalition.” In furtherance of its agenda, it has vociferously campaigned and encouraged German citizens to join the SPD and stop the party from entering into another coalition with Merkel. February 6 was set as the cut-off date for people to join the party if they wanted to vote.

However, another potential setback awaits the two parties. According to a report released by a domestic newspaper named the Rheinische Post, the Federal Constitutional Court in Germany is currently hearing five complaints which have challenged the legitimacy of the ballot of the SPD members, two of which have already been rejected, as clarified by a spokesperson for the court.

In 2013, the court had revoked an injunction that was meant to prevent a similar ballot on the grounds that it was unconstitutional to give SPD members a greater say than other voters. With the present claimants arguing that the SPD’s membership vote is violative of basic German law, it is unclear as to when a final judgement on the case shall be delivered by the judicial authority.

An Insa poll on Monday revealed that support for the SPD had dropped to 17 percent which was below its election result of 20.5 percent. The conservatives also slipped to 30.5 percent, meaning that no single party would attain a majority if an election were to be held now.

Germany could face the prospect of a new election or an unprecedented minority government if the SPD members, who must approve any final coalition deal, vote it down. The onus is now on the SPD to positively pitch and project the coalition deal agreed with Merkel’s conservatives on Wednesday to its party members who retain the power to vote on the agreement through a postal ballot in the upcoming weeks. A ‘no’ vote would effectively cause a complete political crisis in Germany, which would challenge the constitutional mechanisms of the federal republic like never before since its establishment in 1949.

Featured Image Source: Wikimedia Commons

Stay updated with all the insights.

Navigate news, 1 email day.

Subscribe to Qrius