SPD takes a step toward another self-destructive coalition with Merkel's CDU

Both the German election campaign and a lot of the commentary I've seen on it ignored a pretty basic economic reality. Paul Krugman explains it pretty straightforwardly: "... if we imagine a euro breakup, I think everyone would agree that the new mark would soar in value, making German manufacturing much less competitive. The German public imagines that it is being cruelly exploited for the benefit of lazy southerners; arguably, what's really happening is more like China's purchases of dollars, which are intended not to subsidize America but to boost industry." The whole euro crisis is impossible to understand without taking that into full account: the euro is a cheaper currency for Germany than a separate German currency would be. As Krugman puts it, "the euro can be seen as a de facto foreign exchange intervention to keep the de facto Deutsche mark weak." Most commentary on the German election makes it sounds like Merkel's government has been quietly but successfully muddling along in the euro crisis. Riding the tiger would be a better metaphor.

Meanwhile, Merkel's government-building chugs along, with the SPD playing the cooperative and "responsible" party, agreeing to start talks with Merkel's CDU to again become a junior partner in a Grand Coalition headed by her. Do I need to say they've spent the days since the election not doing jack to develop the possibility of a red-red-green opposition that would reject Merkel as Chancellor and instead form a left government of the SPD/Left/Greens? I guess in German-style political terminology, that would be a center-left (Greens)/not-quite-so-center-left (SPD)/left (Left Party) coalition.

The lazy conventional wisdom may be right in expecting that a Grand Coalition government will emerge. Assuming otherwise would assume a degree of fight and political-strategic sense on the part of the SPD that the Party has not been showing in, oh, the last decade or so. Various polls, some with more questionable methodology than others, show a majority of Germans favor a Grand Coalition. (Regierungsbildung: SPD-Führung will mit Union sondieren Spiegel Online 27.09.2013)

It's been hard to go wrong lately betting on the fecklessness of the SPD leaders. These two cartoons from Klaus Stuttmann tell the story of the current situation with few words:

Merkel courts her two potential coalition partners, the SPD and the Greens, saying, "Come on out now! Think about your civic responsibility!!"

SPD leadership discussion: "And what will we get after four years of a Grand Coalition?" "Mommy's complete trust ...!"

"Mutti" ("Mommy") is the nickname Merkel's admirers in the press have been using some much the last few weeks. It's supposed to capture Merkel's supposedly benign, comforting presence as Chancellor.

But Stuttmann's cartoons capture the SPD's real dilemma. Individual leaders may profit, figuratively and literally, from becoming Ministers in a new Merkel Cabinet. But the Social Democratic Party can only expect to lose votes as a junior member in another Grand Coalition with Merkel. It's not an abstract speculation. That's exactly what did happen to the SPD when they were the junior partner in a Grand Coalition headed by Merkel from 2005-9.

And it's important to keep those public opinion polls in perspective. Of course, lots of the 47% who voted for Merkel and her current coalition partner the FDP would prefer that the SPD join a Grand Coalition headed by Merkel. It will strengthen the side the voted for and weaken the side they voted against.

On the other hand, in the actual election results from last Sunday, the left parties (SPD, Left, Greens) have a majority of seats in the Bunestag. Merkel's conservative CDU has a minority of seats in the Bundestag, despite their electoral plurality. None of the left parties ran on any kind of explicit goal of making a coalition with Merkel, though SPD Chancellor candidate Peer Steinbrück almost certainly had that in mind. Did the electorate that voted in a left/center-left majority in the Bundestag vote that way because they wanted four more years of Angela Merkel? Not very likely.

One indication of this is in the Spiegel article linked above. Political parties in Germany have a formal membership system. Spiegel cites a Stern poll showing that 65% of the SPD members oppose the SPD entering a Grand Coalition. That's consistent with the protest from a number of state and local level SPD parties who have also objected, those elected leaders presumably having some sense of what their base voters want.

Rudolf Dreßler, a former SPD Member of Parliament and former German Ambassador to Israel who is now with the anti-neoliberal Institut Solidarische Moderne, gives what seems to me a stone realistic evaluation of the position in which the SPD would put itself as a junior member of a Grand Coalition now ("Die SPD könnte in einer Großen Koalition nur verlieren" Deutschlandfunk 24.09.2013):

Die SPD wäre mit einem 16-Prozentpunkte-Abstand der kleine Juniorpartner. Von Augenhöhe gegenüber der CDU kann man realistisch nicht mehr sprechen. Und das Zweite ist: Die erste und somit größte Oppositionspartei wäre dann die Partei Die Linke. Diese würde die SPD sozialpolitisch jagen, und meine Prognose ist, sie würde die SPD mit Erfolg jagen. Anders ausgedrückt: Die SPD könnte in einer Großen Koalition nur verlieren.

[The SPD would be the small junior partner with a 16% point gap {between its popular vote and that of Merkel's CDU}. One can no longer speak of it being eye-to-eye with the CDU. And the second thing is: The first and thereby biggest opposition party would then be the Party of the Left {the Left Party}. It would hound the SPD in social-political matters, and my prognosis is that they would hound the SPD successfully. To put it another way: The SPD in a Grand Coalition can only lose.]

It's hard to see how that shakes out any other way.

Tags: angela merkel, austerity economics, eu, euro, european union, spd