international

Germany votes

6.45pm: Click to watch Angela Merkel's victory speech (translated into English).

5.45pm: Dan Hamilton has just emailed in the exit poll:

                       2009                2005        
CDU/CSU           33.5%              (35.2%)      
SPD                    23.5%              (34.2%)      
FDP                    14.5%              (9.8%)      
Greens                10.0%             (8.1%)      
Left Party             13.0%             (8.7%)      
Others                  5.5%              (4.0%)       
 
I think it’s likely to be enough for the right.
 
Germany has a threshold of 5% (or winning three constituency seats) so there should be enough parties under that to ensure that the CDU and FDP get (just) over 50% in terms of parliamentary representation. By my calculations, the full exit results the Merkel coalition on 48% and the lefties on 46.5%.
 
Germany’s exit polls have historically been very accurate – Forschungsgruppe have been out by an (enviable) margin of 0.25% in the last three elections.

3.30pm: The BBC website has some (caricatured) photographs of Germany voting.

Noon: A jet-lagged Merkel held an eve-of-poll rally in East Berlin last night after returning from Pittsburgh.  Concerns had been raised that her absence from the campaign for 72 hours had contributed to the CDU's slippage in the polls. Telegraph report.

10.30am: UKPollingReport reminds us that German polls "performed very poorly" last time - overstating the CDU lead by 6% to 8%. 

This thread will be updated during the course of the day.

Chameleon Merkel needs Guido's backbone

Both the Financial Times and The Economist hope that Angela Merkel will be able to break free of her 'grand coalition' with the left-leaning SPD after tomorrow's German elections. Latest opinion polls point to a race that is still too close to call.  The CDU, when joined with the economically and socially liberal FDP, are one or two points within target of gaining a majority.

There are two principal reasons why the grand coalition should be replaced by a CDU-CSU-FDP coalition:

The grand coalition is bad for democracy
The Financial Times: "All German governments are coalitions, ruling by consensus. But it would be bad for the country, and bad for the principal parties, if the CDU and SPD were forced once again into a “grand” coalition. It limits their room for manoeuvre. More importantly, it discourages democratic debate, and encourages the splintering of support towards more extreme minority parties."

The Economist made exactly the same conclusion one week earlier: "Yoking together Germany’s two Volksparteien in one government tends to stifle the coherent, mainstream opposition that is essential to the cut-and-thrust of policymaking in any democracy. Deprived of choice, disgruntled voters tend to drift towards extremism or apathy, thereby weakening the big parties even more. Indeed, there is a growing risk that, with five parties always likely to win seats in the German parliament, it may become all but impossible to have anything other than a grand coalition. What ought to be an emergency arrangement might turn into a permanent one. That would not be good for democracy."

An alliance with the FDP would build a more dynamic German economy
The Economist believes that the FDP would be much better coalition partners for Frau Merkel: "The FDP is not only the most pro-business of the parties but also the most pro-American. It has also been the boldest in suggesting tax and welfare reforms. For all these reasons, if this newspaper had a vote in Germany’s election, it would cast it for the FDP, in the hope that it joins a coalition with Ms Merkel’s CDU."

Like Germany as a whole, Mrs Merkel has drifted leftwards since the last election. During the 2005 election a promise of radical tax reform saw an election-winning lead evaporate. "Next to Merkel, even a chameleon would blush," wrote Oliver Marc Hartwich. His evidence?  This extraordinary quote from the German Chancellor: "Sometimes I'm a liberal, sometimes I'm a Christian socialist, sometimes I'm a conservative."  She can be a campaigner for neoliberal reforms one day and a defender of the welfare state the next. She can campaign against climate change and then fight for the country’s car industry against new EU fuel efficiency rules. She can criticize the Pope in public and then speak about her deep Christian roots. Angela Merkel is everything to everyone - it only depends who she is talking to.

The Economist is correct to say that the FDP is by far the most economically liberal party but it is also true that the FDP has been moderating its position somewhat in recent times. The FDP leader Guido Westervelle (pictured) is most likely to become Foreign Minister. That is good for the Atlantic alliance but his energy is really needed in economic policy. German unemployment is predicted to hit 11% next year and the budget deficit will exceed $200bn.

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Posted below is a video from Channel 4 on Chancellor Merkel's campaigning style:

 

No clear winner in German election debate as Merkel faces Left-wing fire for her positions on Afghanistan and nuclear power

The leaders of Germany's main parties debated last night but no clear winner emerged according to instant opinion polls. Watch BBC report. A draw might, however, be something of a setback for Mrs Merkel. Her CDU party's great advantage has been her strong lead in all opinion polls as first choice for German Chancellor.

The two principal candidates for Chancellor, Mrs Merkel of the CDU and Frank Walter Steinmeier of the Social Democrats, often agreed during the debate. As coalition partners in the current German government they take very similar positions on the hot issue of the sale of car manufacturer, Opel; European integration; and the war in Afghanistan. The Wall Street Journal agrees that Germany will leave Afghanistan within about five years if Mrs Merkel is re-elected.  Her support for the war is described as "equivocal" and the anti-war Linke party has seen its support rise during the election campaign.  Afghanistan emerged as an election campaign issue after as many as 70 Afghans were accidentally killed by German forces in an airstrike.

Another hot issue in an otherwise lacklustre campaign is the issue of nuclear power. One of the big decisions taken by the former SPD-Green coalition led by Gerhard Schroeder was a ban on new nuclear power stations.  Mrs Merkel wants to extend the life of existing nuclear power stations by fifteen years and her likely coalition partners, the FDP, want to build new ones. This is an unpopular position, however. The Economist notes a poll showing that just 17% of Germans want their country to "stay in the nuclear business".

Current opinion polls show that Mrs Merkel should be able to form a majority coalition with the FDP but she is has little margin for slippage.

Merkel will use setbacks in regional elections to warn Germans against extreme and chaotic Left-wing coalition

Germany's CDU has become familar with losing election-winning leads in opinion polls.  At the last election it saw a large opinion poll lead eroded by concerns at the flat tax agenda of an adviser to Angela Merkel.  The election before that saw Gerhard Schroeder return from the political dead because of his energetic campaign against the Iraq war.  Could history repeat itself again?  Polls have until now suggested that Chancellor Merkel was on course for a victory at next month's federal elections (27th September) and the opportunity to govern with her natural allies - the liberal FDP.  But the CDU has suffered big setbacks today in regional German elections. 

The CDU has lost its majorities in the two states that voted today.  In Thuringia support for the CDU fell by 12% to 32%.  Support dropped by 13% to a little under 35% in Saarland.  Majority coalitions are now possible in both 'Laender' if the SPD, Greens and Linke parties join forces.  The FT sees the results as the latest manifestation of the splintering of the German electorate.

The very idea of the Left joining forces could be a propaganda opportunity for Merkel.  The CDU will present any SPD dalliance with the Linke party of Oskar Lafontaine (Sun readers may remember the 'Is this the most dangerous man in Europe?' front page that targeted his Europhile agenda) as a preview of what might happen at a federal level.  Most centrists Germans strongly oppose the inclusion of the SPD in any coalition.

Over the next few days Chancellor Merkel will look anxiously at national polls which up until now have been showing CDU leads of approximately 15% over her current coalition partners, the left-of-centre SPD.

Popular Merkel rules out tax rises to close Germany's budget deficit

Current opinion polls point to Angela Merkel not only remaining Chancellor when Germany votes on 27th September but she should also be free to govern without the left-wing Social Democrats.  Since 2005 she has had to govern in an awkward grand coalition with the SPD.  In that election her party won 35.2% and the SPD won 34.2%.  Merkel's natural coalition partners, the FDP, won 9.8% and the Greens won 8.1%.  The latest opinion polling has the CDU-CSU-FDP bloc with a combined 51% while the SDP-Green bloc has just 34%.  The SPD are reluctant to govern with the far-Left Linke party, led by Oskar Lafontaine and Lothar Bisky.  The Linke party has 8% to 9% of votes in most opinion polls.

Merkel's standing was boosted last week when data suggested Germany was beginning to come out of recession.  She will be taking nothing for granted, however.  She lost a large opinion poll lead in 2005 when an adviser's plan for a flat tax frightened German voters.  In 2001 the CDU/CSU expected to win but the SPD stayed in power after Gerhard Schroeder campaigned vigorously against the Iraq war and for help for many parts of Germany that had been afflicted by severe flooding.

This week's Economist reports that Chancellor Merkel has ruled out tax rises to close Germany's budget deficit.  Although much smaller than Britain's deficit, the German deficit will be 6% next year (up from 4.7% this year and balance last year).

Even more interesting is the proposal of her likely new coalition partners - the economically liberal FDP.  The FDP wants to eliminate all but three of Germany's personal tax rates.  The cost of tax simplification is estimated at €35bn but the FDP is willing to make the supply-side argument that tax simplification will, in part, boost revenues by discouraging the nation's €350bn black economy.

Over the last four years the SDP has blocked the CDU/CSU's modest instincts to liberalise employment law but Merkel is likely to be encouraged to be bolder by the FDP which favours much greater labour market flexibility.  

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More polling recording by Angus Reid Global Monitor:

 

CDU poster features busty Angela Merkel

The poster for CDU candidate Vera Lengsfeld has the slogan: "We have more to offer"!

A couple of weeks ago we featured the extraordinary posters of the Czech Civic Democrats.

Merkel agrees to €50 billion stimulus package

Under pressure from the CSU section of her centre right party - Angela Merkel has agreed to include tax cuts in a €50bn stimulus package for Germany.  The Times has more:

"The idea seems to be to announce a package just before Barack Obama’s presidential inauguration on January 20. The combination of US and German initiatives could help to restore international business confidence. The Christian Social Union, the Bavarian sister party of Ms Merkel’s Christian Democrats, has been insisting that tax cuts form part of the recovery plan. The Chancellor had been set against this – part of her contempt for the British measures is the conviction that VAT cuts do not encourage consumer spending – but buckled during talks on Sunday night."

German CDU joins attack on Gordon Brown's unfunded fiscal stimulus (as Angela Merkel becomes 'Frau Nein')

The British Conservative Party was delighted yesterday when Germany's left-leaning finance minister, Peer Steinbruck, used an interview with Newsweek to describe Gordon Brown's large fiscal stimulus as "crass Keynesianism" and "breathtaking".  In today's Independent, Shadow Chancellor George Osborne writes:

"How ironic. In the very same week that Gordon Brown stood up in Parliament and claimed that he was saving the world, the world answered back. In a matter of just a few days, the German Finance Minister described Mr Brown's reckless borrowing as "crass" and "depressing", international currency markets sent the pound to a new low against the euro, and it has become clear that the British bank recapitalisation plan is the most expensive in Europe."

Senior Labour figures attempted to suggest that Herr Steinbruck's intervention was all about internal German politics but his view has been backed overnight by the CDU half of Berlin's Grand Coalition.  Steffen Kampeter, who speaks on economic policy for Chancellor Angela Merkel's CDU party, described moves to raise debt as "a failure of Labour policy".  The BBC reports Herr Kampeter as saying:

"Peer Steinbruck's comments have nothing whatsoever to do with internal German politics, as Prime Minister Brown has suggested. The tremendous amount of debt being offered by Britain shows a complete failure of Labour policy. In questioning the British government's approach, Peer Steinbruck is exactly expressing the views of the German Grand Coalition. After years of lecturing us on how we need to share in the gains of uncontrolled financial markets, the Labour politicians can't now expect us to share in its losses. The tremendous amount of debt being offered by Britain shows a complete failure of Labour policy."

Angela Merkel is supportive of a fiscal stimulus across the EU but insists, like Britain's Conservatives, that it be fully-funded.  Rosemary Righter in The Times points to German history to explain the caution:

"Germans are profoundly averse to debt and, since the collapse of the currency in the Weimar Republic in the 1920s, they have remained terrified of inflation. Nor do they trust pump-priming; they tried that after the 1973 oil shock, they point out, and all it did was drive up public debt. Their reaction to emergency spending by government is to save against the day when the bills come due. More debt today, they reckon, means higher taxes tomorrow. A Chancellor who keeps her powder dry is just their cup of chocolate."

The Guardian has labelled Angela Merkel 'Frau Nein' after she adopted 'go-it-alone' positions on a range of issues.  In addition to her attitude to borrowing she "opposes any common EU policy that could be seen as confrontational towards Russia"; "has led resistance to the European commission's carbon trading proposals"; and "has frustrated Washington, London and Paris by resisting the imposition of meaningful economic sanctions on Iran over its nuclear programme".

UK Tories deepen relations with centre right parties in Europe

David Cameron met Angela Merkel yesterday (library photograph) in the latest example of the increasing cooperation between UK Tories and continental, centre right parties.

The FT reports that the UK Tory leader and German Chancellor agreed to resist protectionism as a response to international economic turmoil.  The newspaper also suggests that despite differences on the EPP and Lisbon, Mrs Merkel has unfrozen relations with Mr Cameron since it has become increasingly likely that he'll be Britain's next Prime Minister:

"Ms Merkel’s allies say she remains suspicious of Mr Cameron’s intentions in Europe and fear that he could lead Britain into isolation, but she is said to admire his “green conservative” outlook and is intrigued by the way he has revived his party."

Beneath the high profile meetings between the party leaders are a number of formal joint working groups (formally established last September) with Tory MPs sat on policy committees with representatives of the German CDU and French UMP.

CDU's Rüttgers pursues "the politics of balance"

Is Germany's CDU edging leftwards?  It's not the first time this question has been asked and it was asked again recently by The Economist.  The Economist was reflecting upon 'The Rüttgers effect' - the effect of the CDU premier of Germany's most populated state, North Rhine-Westphalia.

Rüttgers, who styles himself as "the workers' leader" has advocated (and helped secure) more entitlements for the unemployed and pensioners at the national level.  But he has also cut his state's large budget deficit, ended subsidies for declining industries and introduced university tuition fees.

The Economist concludes:

"Mr Rüttgers insists that reform is only possible “if people don't feel it means less for them.” He sees no tension between social goals and economic efficiency. Companies that rationalise too much reduce productivity. Better education translates into higher GDP. What looks like contradiction is “the politics of balance”. From Monday to Saturday, North Rhine-Westphalia's rules on shop-opening hours are the “most liberal in Germany”. Sunday, he says, is for the family."