18 December 2013

SPD 'yes' vote paves way to Merkel III government

Partially translated from the German

As reported by Reuters, EUObserver and the Frankfurter Allgemeine Zeitung, Germany's Social Democrats voted overwhelmingly (75.96 per cent of party members) in favour of joining a "grand coalition" with Chancellor Angela Merkel's conservatives on Saturday, clearing the way for a new right-left government. Thanks to what analysts called a clever strategic move to ask grassroots members to vote on the coalition, the SPD forced Merkel to accept many of the SPD's leftist policies, even though the conservatives scored 41.5 per cent of the vote in September compared to 25.7 for the SPD.

This paved the way for the the coalition agreement to be signed on Monday, as reported by Reuters, and the new government to be sworn into office on Tuesday, as reported by Handelsblatt, many others. 

Cabinet

A list of all new ministers and whom they replaced can be found in the Süddeutsche Zeitung. Almost all positions are held by politicians with strong and long executive track-records in their respective fields. Most importantly, Wolfgang Schäuble stays in place as Minister of Finance, a move that 73 per cent of the German population welcomed, according to the Spiegel and ZDF Politbarometer. 

Sigmar Gabriel, Chairman of the SPD, will enter the government as Minister for Economy, Technology and Energy, and Vice-Chancellor. In the next four years, one of the top three issues will be the management of the energy turnaround. It can only be achieved via close coordination between the federal and state levels and requires intensive and at times hierarchical interaction with the numerous lobbies weighing in on policy. It also requires astute leadership, which Gabriel must now deliver, writes DB Research.

Frank-Walter Steinmeier (SPD) will run the Foreign Office again, as he did from 2005 to 2009. He comes with high expectations and brings with him an experienced team taken from Gudio Westerwelle, who was both nationally and internationally an indecisive figure, argues the ECFR Berlin Office. The greatest challenge for Steinmeier is the reorientation of Germany’s relationship with Moscow, which, against the backdrop of the crisis in the Ukraine, promises to be an urgent and problematic assignment.

Andrea Nahles, hitherto general secretary of the SPD, will become Minister for Labour and Social Affairs, reports DB Research and the WSJ. She will be responsible for shipping legislation on the minimum wage through parliament. While still in parliament, she was heavily involved in labour issues, and proved early on to be a sceptic on the "Hartz reforms" of the labour market. She will appoint Jörg Asmussen, now Member of Directorate of the ECB, as State Secretary - one of the big surprises in the new government. As reported by the Financial Times (subscription required), a former finance ministry bureaucrat, and deputy minister in 2008-11, Asmussen had been mooted in the media as a possible finance minister if the SPD had managed to grasp control of the ministry from Wolfgang Schäuble. Mr Asmussen is returning to Berlin after only two of his eight-year ECB mandate in a less prominent role because he wants to spend more time with his young family, according to CityAM. 

Merkel said she was looking forward to working with Asmussen again, and that Germany would propose a successor at the ECB. Among the top candidates are Bundesbank vice president Sabine Lautenschläger, BaFin head Elke König and the head of the Halle institute for economic research, Claudia Buch, writes Reuters, with the Handelsblatt reporting that Läutenschläger had the best chances. 

The most surprising appointment, however, was that of Merkel's ally Ursula von der Leyen, as Germany's new defence minister, reports EUObserver. The 55-year old mother of seven, who was previously labour minister, will be Germany's first ever woman defence chief and this move enhances her reputation as the chancellor’s most likely potential successor, writes the Financial Times (subscription required). [Further reporting on her possible status of CDU "crown princess" by the Independent.] Von der Leyen will replace Thomas de Maiziere, a close ally of Merkel who used to be her chief of staff and who will now return to the interior ministry.

On Tuesday, Merkel was re-elected by 462 votes in Germany's Bundestag, with 150 votes against (23 more than Green/Left opposition hold in the Bundestag, as some commentators noted) and nine abstentions, and was sworn in as chancellor soon afterwards. 

Among the first to congratulate Angela Merkel on her reelection was EU Parliament President Martin Schulz. In a statement issued on Tuesday he said: "In the name of the European Parliament, I wholeheartedly congratulate Angela Merkel on her re-election as Chancellor of Germany. I also congratulate all members of the new government on their appointment. Important tasks lie ahead for the new German government that will need to be tackled together courageously and determinedly with our European partners."

Similarly Commission President Barroso published a statement: "On my own behalf and on behalf of the entire European Commission, I am very pleased to offer my warmest congratulations on your re-election as German Federal Chancellor. Your re-election constitutes both an endorsement of your past efforts and a signal of confidence for the coming years. Germany and the European Union jointly face the challenge of pursuing the course of consolidation and reform that we have embarked upon. In recent years the European Union and its Member States have made impressive efforts to counter the crisis. The fruits of these efforts are already clearly visible and confirm that we are on the right track."

Future challenges

Energy transition, planned pension reform, the end of the military mission in Afghanistan and the introduction of tolls for private cars, backed by the CSU, are considered the new government's main challenges, write presseurop/Die Welt. Though Ms Merkel has solidified her position as German leader with the coalition accord, conservatives within her own party and many in the business community worry that the price for the alliance with the Social Democrats was too high. Opponents of the coalition programme say the new government's spending priorities and other measures, such as a plan to reduce the retirement age, set a negative example for the rest of Europe when Germany is demanding that other countries reduce public-debt loads, reports the WSJ.

Summary by Jana Uehlecke