Angela Merkel didn’t exactly win the German election last night, but she got what she wanted: a second term as chancellor, this time at the head of a coalition with the liberal Free Democrats. Merkel’s Christian Democrats actually did badly—their share of the vote dropped from the 35 per cent they held four years ago, to 34 per cent, the second-worst result in their history. But thanks to the geometry of German coalition politics and the spectacular success of the Free Democrats, who won 15 per cent of the vote—their best ever result—Merkel comes out of last night’s election stronger than she was before. It is a situation somewhat reminiscent of 2002, when the Greens saved Gerhard Schröder’s “red-green” government.
What this means in policy terms is by no means clear. Angela has been “set free” as the Economist hoped she would be, but it’s not clear that Germany’s budget deficit, which is expected to exceed six per cent of GDP next year, will allow her to cut taxes as it wants her to. Nevertheless, it is somewhat of a paradox that Germany may have its most Hayekian government at a time when everyone else has become more Keynesian. Much will depend on how much Merkel, who for the past four years has co-operated so well with the Social Democrats that the lines between the two parties became blurred, is able to control the Free Democrats’ more aggressively liberal instincts. She is such a pragmatist that, even after four years as chancellor, no one really knows what she stands for.
The big surprise last night—and in some ways the most important story in the long term—was just how bad the Social Democrats did. They won just 23 per cent of the vote—a drop of 11 points from 2005 (a loss of six million votes in four years) and their worst result since the war. “This is a bitter day for German social democracy,” the Social Democrat candidate, Frank-Walter Steinmeier, said at the Willy-Brandt-Haus, the party headquarters, in Berlin after the first exit polls came in at 6 p.m. last night. Having dropped below a quarter of the vote, the future of the 140 year-old Social Democrats as what the Germans call a Volkspartei is now in doubt. They had little choice at the time, but in retrospect it looks like the decision to become the junior partner in the grand coalition in 2005 was a disastrous error.
The Social Democrats are now likely shift to the left and in the next few years possibly even attempt a reconciliation with the Linke, the left-wing party created by Gregor Gysi and former Social Democrat leader, Oskar Lafontaine. The party emerged as a protest against Schröder’s economic reforms but has gone from strength to strength since 2005 and last night increased its share of the vote from nine per cent to 12 per cent—probably partly because it was the only party to demand an immediate withdrawal of German troops from Afghanistan (“Raus aus Afghanistan“, declared its posters). The collapse of the Social Democrats also now puts greater pressure on the Greens to look for alternative coalition partners (“The Social Democrats are not going to recover any time soon,” one Green member of parliament told me last night), although if the Christian Democrats now move to the right it will make it harder for even the most pragmatic Greens to contemplate the idea of a coalition with them.