How many world leaders can go 24 hours non-stop, debating policy minutiae with bitter rivals and truculent allies — and hammer out a deal more or less on their own terms? Certainly not many, and German Chancellor Angela Merkel is one of them. For the umpteenth time, she proved she was being written off too early by reaching a preliminary coalition deal with the Social Democratic Party (SPD).
This is already the longest post-Second World War period in which Germany has gone without a government — the election was in September — and the round of talks between Merkel’s Christian Democrats (CDU), their Bavarian allies from the Christian Social Union (CSU) and the SPD that began on Thursday morning and ended early on Friday has also made history as the longest ever. Merkel’s effort to give Germany a stable government (as opposed to a minority cabinet or a new election) has been a teeth-grinding slog that has left her visibly in worse shape — but then, younger politicians than the 63-year-old chancellor might not have lasted; and some didn’t. One memorable image from the CDU’s failed talks with the liberal Free Democrats (FDP) and the Greens last year was a washed out-looking FDP leader Christian Lindner, 39 years old, announcing after an early-morning breakup of the negotiations that it was “better not to govern than to govern falsely”. His party has been punished for this in the polls since, scoring lower than it did in the election.
At times during the post-election saga, Merkel, too, has looked exhausted and frustrated. She never gave up. Her path to Friday’s breakthrough has been linear and logical. First, she tried the combination of parties that looked the most promising according to the election results. When that failed because Lindner couldn’t accept some of the necessary compromises with the left-leaning Greens, Merkel disregarded SPD leader Martin Schulz’s vow not to resume the Merkel-led “grand coalition”, which led the country for the last four years and offered to talk rather than call a new election. An intervention by President Frank-Walter Steinmeier, formerly an SPD leader, and prodding from the party’s business-oriented caucuses ultimately convinced Schulz that helplessly handing the mandate back to the voters was a bad idea — and that in a new election, the SPD could underperform even its worst-ever result from September.
One might think, as Merkel kept searching doggedly for a compromise, that the SPD’s consent to negotiate another GroKo would give it an edge in the talks. On Friday morning, it became clear how hard Merkel bargained, even faced with a premature end to her political career: Most Germans doubted she would serve a full term in case of a new election. She bet that the SPD wanted the talks to break down even less than she did, and she won.
The SPD leadership, which needs to sell the agreement to the party conference on January 21, counts 60 points on which it achieved its goals in the talks, including a deal to stabilise pension contributions and payout levels, agreement that employees and employers will evenly split all health insurance payments (the balance is skewed toward the employee now), increased infrastructure investment and higher child benefits. But on headline issues, the CDU/CSU position has largely prevailed. The SPD, for example, demanded a tax increase for the top income bracket but didn’t get it. Nor have Merkel’s conservatives given way on the grand SPD plan to scrap private health insurance, which some 12 per cent of Germans buy, and unify the health care system along the lines of the current mandatory insurance: That’s not going to happen in the next four years.
The conservatives gave some ground on the matter of family unification for refugees. They initially wanted to continue keeping asylum applicants with only a partially protected status — more than 20 percent of 2017 applicants — from bringing over their families, but they agreed to let in up to 1,000 people a month, which is more generous but, even so, a harsh limit for the refugees to contend with. They also raised the asylum application ceiling formerly agreed by the CDU and the more anti-immigrant CSU to 220,000 a year from 200,000. This, however, is, on balance, a victory for the conservatives rather than for the pro-immigration SPD.
Most fundamentally for Merkel, the government will stick to her trademark policy, balancing the budget. It helped smooth the talks that the parties had a predicted 45 billion euro (Dh201.65 billion) a year surplus to play with — not quite enough to cover all of the SPD spending ambitions, but plenty, it turns out, for a palatable deal. Germany, whose exports are booming so much that there’s a shortage of pallets on which goods are transported, can afford a little more socialism.
Schulz said on Friday that the negotiators had also reached a “breakthrough for Europe” — a set of policies to match French President Emmanuel Macron’s enthusiasm for a closer European Union — but it wasn’t immediately clear what he meant. Germany may face high expectations as Europe’s strongest economy and one of its most stable democracies, but most of the time in the gruelling coalition talks was devoted to the minutest details of domestic policy. Merkel, despite her image as a responsible global leader, is pragmatic about putting Germany first without shouting it out as a slogan. She has a sufficient command of the small print to be effective at it, too.
Germans are tired of the coalition talks — they’re not as used to marathon negotiations as, say, the Dutch, who waited 209 days for a coalition last year. A recent poll shows a majority don’t even want another CDU-SPD coalition. Merkel’s apparent fatigue and seeming inability to work her usual compromise magic made her look vulnerable for a while. But, if Schulz sells last Friday’s deal to the party base, which is likely, Merkel will probably reign confidently until the end of her term. She’ll have plenty of time to pick and groom a successor — a task she has been unwilling to tackle in her 12 years in power, but one it’s no longer prudent for her to avoid.
Leonid Bershidsky is a Bloomberg View columnist.