Merkel backers betting on new 'grand coalition' to end impasse
(Bloomberg) German Chancellor Angela Merkel’s party is betting on a revived alliance with the Social Democrats to dodge the risk of new elections, according to people familiar with discussions in Berlin.
While Merkel has publicly stated she’s open to another vote, her backers expect increasing public and political pressure on the SPD to abandon its aversion to a rerun of the "grand coalition," with the chancellor, said the people, who asked not to be identified because the discussions are private. That alliance of Germany’s two biggest parties underpinned two of Merkel’s three terms, including the last four years.
"A grand coalition would mean continuity and stability in Germany and would therefore be desirable," said Holger Schmieding, chief economist at Berenberg. "But the Social Democrats would demand a high price for such an alliance, and that wouldn’t necessarily be good for the German economy."
After coalition talks with the Free Democrats and the Greens collapsed on Sunday, another grand coalition would require overcoming resistance by SPD leaders as well as rank and file after the party emerged battered from previous pacts. The goal is to appeal to the need for German stability at a critical time for the country and the European Union amid nationalist pressures and challenges posed by Brexit.
The main argument for an SPD about-face is that a grand coalition would be the lesser of two evils. Refusing a role in government and holding out for new elections could lead to even weaker results after the Social Democrats slumped to their worst showing since World War II in the September ballot. The next day, Schulz said "I will never join a government with Angela Merkel."
"I do hope that they will reflect very intensely about whether they should step up and take responsibility," Merkel told ZDF television on Monday.
For both the SPD and Merkel’s Christian Democrat-led bloc, there may be more risk than reward in returning to the polls. Their combined support declined to 51% from the poor September results of 53.4%, according to an INSA/YouGov poll conducted Monday.
The push for a grand coalition appears to have an important ally in President Frank-Walter Steinmeier, a former Social Democratic challenger for the chancellery who became Germany’s non-partisan head of state in March. The former foreign minister has been thrust into a key role in forming a government and on Monday urged all political parties to reconsider their positions.
The call to civic duty includes his former SPD colleagues, most notably leader Martin Schulz, Merkel’s chief rival for chancellorship in the September vote. He reiterated his aversion to renewing an alliance with Merkel’s conservative bloc on Monday. But Schulz’s backing in the SPD is tenuous after running a flat campaign against Merkel.
Steinmeier started talks with Merkel on Monday and met with the Greens and the FDP on Tuesday. The Free Democrats won’t make any effort to revive negotiations with Merkel, an official briefed on the talks said after FDP head Christian Lindner met the president.
Lindner has said it’s up to the SPD to talk to Merkel about getting back together. On Wednesday, the president will see Horst Seehofer, leader of Merkel’s Bavarian sister party, before consulting with Schulz on Thursday, according to a presidential spokeswoman.
Schulz has staked his leadership on taking the SPD into opposition. While he has the support of the left wing of the party, including parliamentary caucus leader Andrea Nahles, he is under pressure from some in the conservative faction to reconsider.
While 78% of CDU-CSU supporters want Merkel to run in case the president calls an election, only 43 of SPD backers want to see Schulz as her challenger again, according to INSA polling for Bild newspaper.
"No one really wants a new election, but it is nevertheless an option that we won’t shy away from," Nahles said on Monday.