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Urgent Stock Market Message

Germany’s Grand Coalition Is Collapsing

Politics / Germany Dec 06, 2017 - 08:24 AM GMT

By: John_Mauldin


BY GEORGE FRIEDMAN : Germany has the fourth-largest economy in the world and the largest in Europe.

This country has been the stable center of the European system for decades. Amid social and political tensions that have torn the European Union since 2008, Germany has been the solid rock on which Europe has rested.

(I wrote about the origins of European geopolitical issues in my exclusive e-book, The World Explained in Maps, which you can download here)

It is not an overstatement to say that if Germany destabilizes, the EU won’t survive. Germany has not yet destabilized, but it is wobbling.

The Political Ground in Germany Has Shifted

One sign is the inability of German parties to form a new government since elections in September.

A reason for this is that Germany’s political reality has shifted. Both the CDU and the SPD lost roughly 20% of their seats in parliament in the election. The Christian Social Union in Bavaria, the CDU’s long-time partner, lost about the same. And the two left-wing parties, the Greens and the Left Party, gained hardly any.

Meanwhile, the right-wing Alternative for Germany, or AfD, gained 93 seats to become the third-largest party in parliament, taking most of its votes from the CDU and the SPD.

In addition, the Free Democratic Party, a traditionally liberal party dedicated to free markets with a minority euroskeptic faction, became the fourth-largest party after failing to win any seats in the previous election.

This is not an earthquake, but the ground has shifted.

The CDU and the SPD can still form a grand coalition, but to date, they have been unable to do so. There are, as in all political matters, many reasons for this, but the deepest reason is that the CDU and the SPD have evolved into effectively the same party.

They have governed together, sharing the same Europhile ideology and holding similar views on the role of Germany and the manner in which German society should be run. The two major political parties have failed to provide the German public with different visions of the country’s future, and different views on the matters that concern Germans, like the EU, immigration and social programs.

The Emergence of New Marginal Parties

As a result, other parties have emerged.

These parties are too small to expect to govern, and so they don’t necessarily need to hold positions that have broad appeal. Instead, they have carved out niches with views designed to bring together fragments of German society.

None of these parties will rule, but together they constitute the only opposition to what are called the mainstream parties.

The problem is that the mainstream consists of many lesser streams, and the subtleties of even the governing coalition have been forgotten. This is one factor that has led to resentment toward this political hegemony.

The marginal parties attract not only fellow ideologues, but also those who are repelled by the decline in debate between the major parties. The SPD therefore is being very cautious in accepting a place in another coalition government.

Germany needs mainstream parties that debate and disagree, not a hegemonic center that generates revolts from the margins.

A Looming Political Earthquake

Politics is seldom interesting from a geopolitical perspective.

Watching the personal ambitions of various political figures rarely reveals the underlying social realities. But we live in a time when politics in the United States, the United Kingdom, Germany, and other countries reveal the deep social tensions that must be addressed.

The anger between factions is real, and bringing it to light is the only way to address it.

Germany is not Angela Merkel, although she has skillfully built a political center that claims to speak for the whole country. But Merkel has also created an opposition that is now challenging the center on a range of issues.

When a grand coalition ignores the dissenters or pretends that they are merely cranks, the ground under the coalition weakens. There is, in fact, a great debate in Germany over the country’s future on issues from the role of German culture to the welfare state.

A grand coalition brushes these matters aside, and the more it does that, the more the political system and social reality will diverge, until the earthquake inevitably arrives.

Grab George Friedman's Exclusive eBook, The World Explained in Maps

The World Explained in Maps reveals the panorama of geopolitical landscapes influencing today's governments and global financial systems. Don't miss this chance to prepare for the year ahead with the straight facts about every major country’s and region's current geopolitical climate. You won't find political rhetoric or media hype here.

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John Mauldin Archive

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