German Elections Put EU Solidarity at Stake

On Sunday, February 20, the first of 2011’s seven state parliament elections in Germany took place in Hamburg, an independent city-state and Chancellor Merkel’s hometown. The CDU, Merkel’s party, suffered a crushing defeat, winning just 21.9% of the vote against the 42.6% the party captured in 2008.

The Green Party forced the early election by walking out of a coalition with the CDU in November. They took 11.2% of the vote vs. 9.6% in ’08.

The defeat means Merkel’s CDU will lose three seats in the Bundesrat, the upper house of parliament that represents the Germany states (similar to the U.S. Senate), and weakens her administration’s control over federal legislation.

Then on Sunday, March 20, elections took place in the state of Saxon-Anhalt, a province located in the formerly communist East Germany. The CDU fared much better there, slipping only 3.7% to 32.5% from the previous election. Its coalition partner at the federal level, the FDP, failed to reach the 5% threshold to enter parliament and remains unrepresented.

The big winner was The Green Party taking 7.1% of the vote, more than double its 3.5% in the previous election of 2006. As the name suggests, this is a party built on environmental activism and staunch collectivist/reformist ideals, such as that the capitalist system will be reformed to achieve socialist ideals and save the planet. To give you an idea, imagine Greenpeace as a viable American political party headed by Nancy Pelosi and controlling sufficient seats in the Senate to force its agenda into legislation.

It was debatable, however, if these two outcomes were a windsock signaling a shift in national voter sentiment that would carry into the five remaining elections. That question was answered yesterday when balloting delivered a 9.0 quake to the German political landscape.

Baden-Württemberg is Germany’s third largest state, home to 12% of the population, and had been a reliably conservative state ruled by the CDU since 1953. That ended yesterday when the CDU was hammered at the polls. Although it held on to 39% of the vote, it will not be enough to maintain its ruling coalition.

There are five major political parties in Germany – CDU, SPD, FDP, Greens and The Left – and four of them saw their share of voter support fall and it all flowed to The Greens, making them the big winners taking 24.2% of the vote. The state will likely be ruled by an SPD/Greens coalition.

The state of Rhineland-Pfalz also held elections yesterday with similar results. The SPD lost its absolute majority but remained the strongest party with 35.7% of the vote. Shadowing Baden-Württemberg, The Greens scored a huge win, tripling their support over 2006 elections and capturing 15.4% of the vote. The SPD must form a coalition with The Green Party to achieve a ruling majority, once again raising the power and influence of The Greens.

The country underwent a political course correction over the weekend, with a new heading decidedly more to the left.

As I have periodically reported, a political shift from center-right to center-left is underway in Germany. The swing in voter attitude, and its impact on the Merkel government, was already visible prior to yesterday’s election. Earlier this month, Germany refused to endorse or participate in any military sanctions against Libya, abstaining from a UN vote to authorize and enforce a no-fly zone over the country. Meddling in the affairs of foreign nations with military operations is extremely unpopular with the voters, and Merkel knows it.

Equally unpopular was Merkel’s eventual, and grudging, agreement to participate in the bailout of several financially struggling EU nations. The voters delivered the proverbial two-by-four upside the government’s head yesterday, and Merkel painfully and undeniably got the message. How this will affect the federal government’s willingness to yield to the wishes of Brussels is the big question.

Another election in Bremen approaches in May, and two will follow in September in Berlin and Mecklenburg-West Pomerania. If state elections continue to erode support for the CDU and its control of the Bundesrat wanes, we could see Germany take a more insular stance regarding the European Stability Mechanism (ESM), formerly known as the European Financial Stability Facility.

Any pullback or refusal of support for the ESM by Germany would spell trouble for the political stability of the EU, the legitimacy of the euro, and the governments of bankrupt EU members.

Germany continued to assert its influence at the latest EU meeting in Brussels on March 25. Chancellor Merkel “convinced” her European counterparts to structure a new €500bn eurozone bailout fund so that member contributions could be spread out over five years rather than three.

While the bureaucrats in Brussels were engaged in late-night debates about how to cover up the bankruptcy of the Europe-as-one-community project, the voters in Germany were asking a different question: Why should I work until I’m 67 to ensure that a government employee in Spain can retire at 55?

If the momentum of the center-left coalition in Germany continues, the EU might soon confront a Germany that refuses to guarantee loans backed by the ESM to other EU members, or Germany could pull out of the stability mechanism altogether.

The fate of the EU is centered in Germany. Can the center hold?

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