Published by Global Banking and Finance Review
Posted on January 31, 2025
By Sarah Marsh and Andreas Rinke
BERLIN (Reuters) - The breaking of a taboo among mainstream German parties on cooperation with the far right looks set to complicate efforts to form a coalition government after an election next month, and could deepen political instability in Europe's biggest economy.
The move that broke the taboo in a country scarred by its Nazi past was election frontrunner Friedrich Merz's decision to push a resolution calling for a crackdown on irregular migration through parliament on Wednesday with the help of the far-right Alternative for Germany (AfD).
By doing so, Merz outraged Chancellor Olaf Scholz's Social Democrats (SPD) and the Greens, denting trust among the parties his conservative CSU/CDU bloc is likely to need to join a coalition if it wins the Feb. 23 election.
Coalition talks in Germany are almost always protracted and are likely now to be more protracted than usual and could be very fraught, said Alexander Clarkson, a lecturer for German studies at King's College London.
"They're going to want everything locked down," said Clarkson.
Lengthy negotiations or the forging of an unwieldy coalition could hamper decision-making in Germany as it seeks to rescue its economy from a structural crisis dragging on broader European growth.
The European Union is also relying on Germany, traditionally its economic locomotive, as a strong partner in negotiations with the U.S. government under President Donald Trump, who has threatened to impose tariffs on the bloc.
There is also a possibility that the AfD, which lies second behind the CSU/CDU bloc in opinion polls, could benefit from any prolonged political instability, some political analysts say.
"Any coalition after this election is an unlikely be a very harmonious affair," said Philipp Koeker, political scientist at the University of Hanover. "Yet unless the next coalition delivers, especially in terms of cost of living, a possible AfD win in 2029 -or earlier - could be on the cards."
COALITION ARITHMETICS
The election was called after Scholz's three-way coalition with the Greens and the Free Democrats collapsed in November. He now leads a minority government with just his Social Democrats and the Greens.
The decline of the big-tent parties and emergence of the AfD in the past 12 years has complicated coalition arithmetics. The more parties enter parliament, and the stronger the AfD, the harder it becomes for two parties to form a majority.
The AfD is polling as high as 22%, more than twice as much as in 2021, but all mainstream parties are widely expected to stick to their pledges not to form a coalition with the AfD, which is monitored by security services.
The conservatives are polling around 30%, and are likely to have to tap Scholz's centre-left SPD or the Greens who are polling around 15% and 14% respectively to form a coalition.
But Wednesday's vote in parliament has prompted fierce criticism of Merz.
"I can't trust him anymore," Scholz said after the vote.
Leading SPD and Greens members openly called Merz unfit to lead Germany. Some lawmakers privately questioned whether their parties could govern with the conservatives under Merz, who has shifted his bloc to the right after the centrist years of Chancellor Angela Merkel.
"He has no integrity and no reliability, someone like that should not be allowed to lead this country," said SPD parliamentary leader Katja Mast.
The conservatives have accused the Greens of mismanaging the economy and being out of touch with many voters.
Merz's calls for permanent immigration controls and the rejection of all asylum seekers on Germany's land borders have increased differences with the Greens and the SPD.
Both parties accuse Merz of breaking a pledge in November not to bring to parliament any motions that he knew he could pass only with the support of the far right.
Merz hopes seizing the initiative on migration will boost support for his conservatives although it caused protests around Germany on Thursday.
He says tightening migration controls is a necessary response to a series of high-profile killings in public spaces by people with an immigrant background.
But putting the focus on migration could also benefit the AfD as it is tough on immigration, and could inadvertently boost the SPD and Greens by enabling them to portray themselves as the true bulwark against the AfD, political analysts say.
Polls this week have been mixed. Some show a slight boost for the AfD and a dip for the CDU/CSU. Others show little change.
(Reporting by Sarah Marsh, Editing by Timohty Heritage)
