Goodbye Merkel, welcome German, EU political uncertainty

My earlier column on the importance of the Hesse elections in Germany, more so than Bavaria, has become a reality following the poor results of the Hesse elections for Mrs Merkel’s CDU and allied SPD parties.

The gainers were the Green Party and the anti immigrant AFD, who are now represented in Hesse for the first time. In the days after the Hesse state election setbacks and Chancellor Angela Merkel’s bombshell announcement she is stepping down as Christian Democratic Party leader, three questions now loom large: how long will Merkel remain chancellor; who will replace her as CDU party chairman; and how long before the reeling Social Democrats SPD bolt from the Grand Coalition?

While Angela Merkel has been prematurely politically written off, this time the reality has hit home and the German iron lady of politics has announced, in a rather long goodbye message, that she is stepping down as CDU Chair and retiring as Chancellor in 2021. This will be severe test for a troubled continent and for German politics and leadership in the EU with far reaching consequences.

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Who will replace her? Many expect her favored heir apparent Annegret Kramp-Karrenbauer or AKK, to win the CDU party vote in Hamburg, if either of two other rivals win the CDU backing, Jens Spahn, the right-wing health minister, or Friedrich Merz, the former finance minister who may in fact be something of a stalking horse for Bundestag President Wolfgang Schaeuble.

A compromise candidate, North Rhine Westphalia Prime Minister Armin Laschet, might keep the Merkel-led government intact, but only at the price of further fragility. And in any case, Merkel's fate ultimately lies not with the CDU, but with the reeling Social Democrats.

The SPD fared even worse than the CDU in both Bavaria and Hesse, and they would be highly unlikely to stay in a Grand Coalition with either Merz or Spahn as CDU party chairman.

Indeed, the leadership of the deeply divided SPD is resigned to picking their moment to pull out of the Grand Coalition at the first opportunity to rebuild the party’s core policies well before the next federal elections.

Internal opposition

What’s more, there is a sense in senior CDU ranks that Merkel may have brought her decision forward to leave politics in order to flush out her internal party opposition once and for all, and perhaps while she still has a firm grip on the party power levers, to give a quick upper hand to her favoured party leader candidate, Annegret Kramp-Karrenbauer.

The CDU Secretary General and former Prime Minister of Saarland, quickly announced her intention to run for the party leadership, has solid support across the CDU.

She was recently put in charge of crafting the party's next manifesto, and is already reaching out to those CDU deputies who defied Merkel a few weeks ago in voting down CDU fraction leader Volker Kauder for Ralph Brinkhaus by appealing to their sense of wanting a change, but in a more positive constructive way than openly undermining the Chancellor.

The SPD leadership under Andrea Nahles has for now beaten back the dissidents within the party ranks pushing for an immediate withdrawal from the Merkel government and who had bitterly opposed entry into the Grand Coalition last spring in the first place.

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But it is clear the SPD leadership knows they need to get out of the governing coalition well before 2021, especially with the rapid rise of the Greens to supplant the SPD in the left of centre opposition.

That existential need to save its core political identity is likely to mean a move to bolt from Merkel some time next year, assuming Merkel first manages to quell the revolt within her CDU ranks in the coming weeks.

So it is only a matter of time, perhaps sooner rather than later, that the SPD will be looking for the first opportunity to pull out of the Grand Coalition, especially while it can cloud its own strategic mistakes under the cover of CDU and CSU internal squabbles.

The politics of Germany, so stable for so long, are now full of uncertainties that will resonate far beyond Berlin. Announcing her retirement from politics from now might be a noble gesture and bowing to popular electoral will, but it will leave a political void and make Mrs Merkel a lame duck Chancellor until she goes.

Mrs Merkel remains popular in Germany and amongst pan European politicians who are seeing an emergence of nationalist and populist leaderships putting the grand European plan under stress.

However, the planned December’s election of a new CDU chair will be widely seen as producing a CDU chancellor-candidate in waiting who will want to make a mark of their own and this is where the uncertainty in both Germany and the wider EU will be felt, with a weakened centre in German politics. Who gained in Hesse?

Green surge

As noted in the earlier article, there was a Green surge on the left – the Greens have been the CDU’s junior coalition partner in Hesse since 2013 – and an anti-immigrant AFD surge on the right, while the smaller liberal FDP and the left-wing Linke party both posted modest gains too.

The upshot is that the Hesse results heightened further fragmentation of Germany’s old two-party system, with the coalition SPD faring the worst and continuing to suffer for its role as Mrs Merkel’s grudging coalition partner. As a result, Europe’s historically most important centre-left party the SPD is now in retreat and facing the same uncertainties as sister parties in France, Greece and the Netherlands.

Mrs Merkel will be sorely missed as she has dominated German politics for so long that her departure is bound to be traumatic. Her country’s economic strength has protected many Germans from the stresses that other nations have suffered and she has been a beacon of hope for dispossessed and disenfranchised migrants from around the world.

But it is precisely the open door migration crisis of 2015 that has had the most consequences to her electoral reverses, and despite warnings from allies to shift gears, she stood by her humanitarian instincts. The warning was on the wall for Mrs Merkel as some watched with dismay her skirmishes with her various CSU coalition partners and sensed that her authority was ebbing.

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And whatever the outcome of the internal party manoeuvring within the CDU and the SPD over the next few weeks, many expect a fragile Grand Coalition in Berlin to translate into a continuing policy paralysis, precluding any further steps towards “ever closer union” on the European project, and stripping much if any of the remaining vestiges of friendly cover that may exist for Italy within the European Commission and Council.

The power vacuum after Merkel is the most worrying as some important decisions need to be made by year end in the EU, as some had hoped that a summit in December would be the moment to make progress on a common European asylum policy and changes to the Eurozone before European elections in 2019.

Not having a firm pair of guiding hands from Germany will make these tasks more difficult to achieve. But the recent signs in European politics have been pointing towards this political uncertainty with a wider pattern across Europe resulting in declining trust in traditional parties, surging support for the radical left and right, and political fragmentation.

Multilateral cooperation

All these factors make it even harder for the EU’s 28 governments to make decisions, especially in meeting Mrs Merkel’s key promises on multilateral cooperation on the basis of democracy, respect for the law and human dignity.

In the international arena, Mrs Merkel has kept anti-Americanism at bay in Germany and she has kept Europeans united over sanctions on Russia, and these might now be in doubt after she leaves, with the new Italian populist party advocating better Russian ties.

In other areas, the Chancellors exit might not be an important factor and is unlikely to have an impact on Brexit according to many observer’s , noting that the EU commission and President are in the driving seat on the Brexit negotiations with the UK.

ALSO READ: Back to Brexit square one: No deal is better than a bad deal

The key battlefield in German politics is whether the grand coalition will continue and whether the allied parties will put aside their bitter differences following the Hesse results and learn from their mistakes and focus on what the German population wants of them.

It will be hard, especially for those parties like the SPD and CDU that have assumed that they will remain indefinitely in power and brushed aside as upstarts the rise of the Greens and the far right parties.

The final question is what will Mrs Merkel do after she retires? Will she opt to become President of the EU Commission or President of the European Council so that she can still influence European policy as a grand old statesperson, or will her pride stop her from taking these jobs and having to go and ask her successors in Germany for favours to implement policies?

No one can predict what this lady will do, having risen from a humble background in Germany and making her sympathetic to issues that others preferred to ignore.
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Dr. Mohamed Ramady is an energy economist and geo political expert on the GCC and former Professor at King Fahd University of Petroleum and Minerals, Dhahran , Saudi Arabia and co author of ‘ OPEC in a Post Shale world – where to next?’. His latest book is on ‘Saudi Aramco 2030: Post IPO challenges’.