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The Merkel Era Is Ending—What It Means for the German Government

Summary:
Chancellor Angela Merkel’s abrupt announcement that she would not seek reelection as leader of the Christian Democratic Union (CDU) constitutes the beginning of the end of the Merkel era. What does this mean for the German government?  Contrary to what one might expect, it is more likely to stabilize than to destabilize the current governing coalition in Berlin. At the same time, it will reduce Merkel’s ability to lead on euro area issues that do not command wide consensus within her party. On Germany’s broader foreign policy direction, finally, the announcement has no impact. Another heavy CDU defeat in regional elections in Hessen prompted Merkel to lay out a multifaceted plan for herself, her party, and her government. She will not be a candidate in the next CDU leadership election in

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Chancellor Angela Merkel’s abrupt announcement that she would not seek reelection as leader of the Christian Democratic Union (CDU) constitutes the beginning of the end of the Merkel era. What does this mean for the German government?  Contrary to what one might expect, it is more likely to stabilize than to destabilize the current governing coalition in Berlin. At the same time, it will reduce Merkel’s ability to lead on euro area issues that do not command wide consensus within her party. On Germany’s broader foreign policy direction, finally, the announcement has no impact.

Another heavy CDU defeat in regional elections in Hessen prompted Merkel to lay out a multifaceted plan for herself, her party, and her government. She will not be a candidate in the next CDU leadership election in December. At the same time, she firmly intends to remain chancellor until the next regular parliamentary election in 2021, but not beyond. She will not be a candidate (even for the Bundestag) in 2021 or indeed in the event of early elections—i.e., if the current government collapses prematurely. And she is not interested in any other political office, including any EU-level office.

In outlining her preferred (prolonged) end to a long political career, Merkel signaled her intention to fight for her political legacy in Germany and Europe alike, for which she needs to complete her fourth term successfully. She can do so only within the current coalition. The sole alternative—involving Merkel’s CDU, the Green Party, and the probusiness Free Democratic Party (FDP)—is certain to be rejected by the Greens, who stand to benefit from early elections. And Merkel has repeatedly said that she would not want to lead a minority government.

Preserving the coalition is also in the interest of the two coalition parties. Both stand to lose from early elections. Merkel’s decision to step down from the party leadership gives her party a window of opportunity to reorient itself politically—if its members chose—and rebuild support base. This window would be cut short if she cannot keep the current coalition going. 

For these reasons, the chances of the coalition surviving until 2021 are arguably higher than before Merkel’s announcements. At the same time, relinquishing control of the CDU’s party apparatus will make it more difficult for her to push the envelope on government policy outside her party’s consensus. This will particularly constrain her ability to forge new deals on euro area reform. Most CDU parliamentarians fiercely oppose any attempt to transfer fiscal control from the national to the European level. Apart from progress on banking union, meaningful institutional reform of the euro area is now unlikely until after the next German and French elections in 2021/2022.  But other EU reforms, particularly greater EU integration in defense and security policy, will continue to enjoy much broader support within the CDU and its current coalition partner, the Social Democrats (SPD).

Merkel’s plan to carry on until 2021 could be threatened from two sides. One is that the SPD might pull out after all. While party chair Andrea Nahles is “wildly determined” to remain in the coalition, her intention is conditional on implementation of her demands on key points of the coalition agreement within the next 12 months. And if the SPD performs badly in the European Parliament elections in May 2019, remaining in the grand coalition may become an even bigger existential threat than early elections.

The second threat to Merkel might be the election of an unfriendly party leader in December. By signaling her willingness to step away from politics in the event of an early election in Germany, Merkel has made it clear that she does not want to remain chancellor at any price. Were the CDU to appoint a new party leader with whom Merkel could not work, she could step down early and trigger new elections in the process. Her party might therefore cross her wishes for her successor at its peril.

The three currently declared CDU candidates are Annegret Kramp-Karrenbauer, the CDU’s secretary-general and Merkel’s preferred choice; Jens Spahn, a conservative political wunderkind who stands for ideological as well as generational change; and Friedrich Merz, another conservative and one of Merkel’s old rivals, who was chairman of the CDU/CSU parliamentary group in the early 2000s but left politics in 2009 after she sidelined him. Merkel will likely use her remaining political capital to push the election of Kramp-Karrenbauer or another centrist CDU party leader.

She may well succeed in getting her way. If she does not, the present coalition may be threatened. But even a breakup of the coalition is unlikely to change the fundamental foreign policy direction of the German government. While skeptical of the euro and critical of Merkel’s support for repeated bailouts of Greece, Merz has recently reintroduced himself to the German public as a coauthor, with a number of SPD heavyweights and progressive philosopher Jűrgen Habermas, of a pro-European op-ed calling for more European solidarity from Germany. As Merz, who has been working as a corporate lawyer (and is chairman of BlackRock in Germany), is identified with the probusiness wing of the CDU, his positioning of himself in favor of “(far) more Europe” is important. It signals that even more rightwing CDU leadership candidates will launch their challenges on a pro-European integrationist platform. This bodes well for the future European direction of the CDU and of any coalition in which it might participate.

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