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New Open Europe Flash Analysis: A resounding victory for Merkel means more of the same for the eurozone

22 Sep 2013
New Open Europe Flash Analysis: A resounding victory for Merkel means more of the same for the eurozone

22 September 2013

The first results from the widely anticipated German elections are in but with the final outcome still far from clear. Below Open Europe provides its response and lays out the potential coalition scenarios still in play.

Summary:
 Numerous coalition scenarios remain possible, from a CDU/CSU majority to a grand coalition. Whatever the final outcome this is a huge, and to some extent unexpected, victory for Merkel. This should finally put pay to hopes of a big policy shift after the elections with more step by step incremental reform expected. In terms of David Cameron’s push for reform of the EU and a change in the UK’s membership terms, Merkel has shown herself open to changes in the EU, however a grand coalition or even one involving the Greens could well be less open to Cameron's reform ideas.

Open Europe Director Mats Persson said,

“Whatever happens this is a massive public endorsement for Angela Merkel, who has established herself as the most powerful female politician ever. Part of her resounding victory must also be seen as a validation of her eurozone policy – expect more of the same.”

“Whether or not the anti-euro Afd makes it into parliament, its strong showing means it could become a force to be reckoned with in the European elections.”

“No matter the coalition outcome, there will have to be a lot of soul searching by the FDP and centre-left. In the end the leadership of these parties could well end up paying the price for their poor showing.”

Latest exit polls (seats in brackets)

ARD (19:55 CET): CDU/CSU 42% (298), SPD 25.5% (181), Greens 8.3% (59), Die Linke 8.4% (60), FDP 4.6% (-) and AfD 4.9% (-).

RTL/Forsa (19:58 CET): CDU/CSU 42.2% (307), SPD 25.7% (187), Greens 8.1% (59), Die Linke 8.6% (63), FDP 4.6% (-) and AfD 4.8% (-).

Potential coalition scenarios

1. Merkel gains her own majority
: Unbelievably this could happen. If both AfD and the FDP miss out, with other small parties garnering around 5% of the vote but not entering the Bundestag, Merkel’s party could gain its own majority with around 42%. Currently, from most exit polls, they look to be a couple of seats short of this but after having been barely considered during the campaign, this is now a very real scenario.

2. CDU/CSU and FDP coalition continues:
 Despite exit polls suggesting FDP has missed out, they are so close to the threshold that they could easily still make it in. If the FDP gets in and the AfD still misses out then the current governing coalition could be maintained.

3. Grand Coalition:
 If the FDP and AfD sneak in above the 5% threshold, as is possible, then a grand coalition would likely ensue, albeit with some very complex negotiations. This could also happen if both the FDP and AfD miss out but Merkel fails to garner enough votes for her own majority.

4. CDU/CSU and Greens coalition:
This is a longshot but the leaders of the Greens have already hinted that they would be willing to consider it. This would likely require the AfD to get into the Bundestag but the FDP to fall short. The Greens could offer backing to the CDU if talks over a Grand coalition fail or if the CDU feels it more beneficial to take on a smaller partner.

What happens next?

The final results are expected later tonight, with negotiations over any coalition expected in the comings days and weeks.

It's not clear how long it will take to form a government but in 2005, when the country last had a grand coalition, it took the parties 26 days to agree the various posts and 2 months for the coalition to be officially formed and ratified by the Bundestag. In 2009 the process was smoother and quicker, as might be expected, with the talks taking just around three weeks and formal approval coming after a month.

The length of negotiations depends on the whether there is a coalition or not and who is involved. Expect a Grand Coalition to take longer. That said, given the CDU/CSU’s significant power this time around it will have the ability to dictate terms no matter who its coalition partner is.

Would failing to enter the Bundestag be the end of AfD?

AfD’s failure to enter the Bundestag would probably not spell the end of the party – especially since they will likely come very close. Their leaders insisted from the start that it would be difficult for the party to get over the 5% threshold, especially given the short time frame for their campaign and their almost single issue focus.

The next target is the European elections which could well prove make or break for the party. Newer protest parties tend to do better in the European elections and the party could get an opportunity to establish a power base. If they fail at this hurdle it could be difficult for them to recover, although a series of German regional elections do also provide future opportunities.

For more information please contact the office on 0044 (0)207 197 2333, Mats Persson on (0)779 946 0691 or Raoul Ruparel on 0044 (0)757 696 5823.

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