Merkel Coalition Tries to Steady the Ship After Resignation

(Bloomberg) -- Germany’s two main governing parties attempted to steady their wobbling coalition on Monday after poor election results and a plunge in the polls triggered the unexpected resignation of one of Chancellor Angela Merkel’s key allies.

The Social Democrats, the junior coalition partner, began the search for an interim solution after Andrea Nahles said she lost the support of her party, part of which wants to ditch Merkel’s Christian Democrat-led bloc in hopes of rebuilding voter trust. The chancellor’s CDU, meanwhile, is engaging in a second day of soul-searching following its own setbacks in last month’s European elections and uncertainty over Merkel’s succession.

CDU leader Annegret-Kramp Karrenbauer said her party didn’t game out the prospect of a new election or her own potential candidacy to replace Merkel as chancellor, as it committed to holding the 15-month coalition together.

Merkel Coalition Tries to Steady the Ship After Resignation

“We didn’t discuss this scenario,” Kramp-Karrenbauer told reporters in Berlin after the two-day meeting. “We have declared unequivocally that we’re prepared, in the spirit of reliability, of shaping our future, to carry on in this coalition.”

Nahles, who left SPD headquarters before noon, played a key role in forging and keeping alive the so-called grand coalition. Her departure could eventually prompt the SPD’s exit, forcing Merkel’s CDU to lead a minority government, form an alliance with the pro-market Free Democrats and the Greens, or face an early election.

Merkel Coalition Tries to Steady the Ship After Resignation

Malu Dreyer, prime minister of the state of Rhineland-Palatinate, Manuela Schwesig, premier in Mecklenburg-Western Pomerania, and Thorsten Schaefer-Guembel, SPD head in Hesse, will take over the leadership on an interim basis, Deutsche Presse-Agentur reported Monday, without identifying the source of its information. Rolf Muetzenich will head the parliamentary group, also on a temporary basis, DPA said, adding that it is still open whether a party leadership vote previously planned for December will be brought forward.

Michael Roth, a deputy German foreign minister and member of the SPD’s leadership council, said Monday that the European Union needs a “clear, functioning government” in Germany, given pending decisions on top posts like the presidencies of the Commission, the Council and the European Central Bank in coming months.

“I know that many are tired and see the grand coalition as the SPD’s main problem,” Roth said in an interview with DLF radio. The SPD’s continued participation in Germany’s ruling coalition is needed to strengthen social cohesion, make progress on climate protection and make sure the choices for key EU posts are the right ones, he added.

Merkel Coalition Tries to Steady the Ship After Resignation

Merkel, the chancellor of Europe’s biggest economy since 2005, on Sunday signaled she’ll seek to ride out the latest crisis in a shifting political landscape that’s increasingly testing her hold on power. Kramp-Karrenbauer, known as AKK, on Monday echoed the idea.

“There are good reasons not to abandon the government frivolously,” AKK said.

While the administration’s future looks more uncertain than ever, the SPD is likely to remain put as it would face a resounding defeat in a new nationwide poll, according to Holger Schmieding, London-based chief economist at Berenberg Bank.

New Elections

“The temptation of cutting the ties looks beneficial for the SPD but new elections would be a catastrophe for it,” said Schmieding by phone. “I expect the SPD under new leadership will remain in the coalition -- if not, it’ll be the end of Merkel as chancellor.”

There’s growing concern over AKK’s leadership skills since she succeeded Merkel at the helm of the CDU in December. As Bloomberg reported on May 28, Merkel has decided that AKK is not up to the country’s top job, according to two officials with knowledge of her thinking. A poll published Sunday showed most Germans agree with the chancellor.

Merkel’s CDU-led bloc was replaced in the No. 1 spot by the Green Party for the first time in a national survey, polling company Forsa said on Saturday. Support for the Social Democrats dropped 5 percentage points to 12%, just 1 point ahead of the far-right Alternative for Germany.

Poor Result

“We are all responsible, we must all become better. The CDU stands behind its party leader,” Armin Laschet, state premier in North Rhine-Westphalia, said when asked whether AKK was to blame for the party’s poor EU election result. Along with former CDU/CSU caucus chief Friedrich Merz, Laschet is considered a possible replacement for Merkel in case of early elections.

The SPD reluctantly agreed to enter a third alliance with Merkel 14 months ago. In the European Parliament elections in May, its support almost halved to 15.8%. The same day, the SPD lost its traditional stronghold of Bremen, coming in second to Merkel’s CDU in the city-state’s election.

“We expect, as coalition partner, that the leadership question in the SPD will be solved as soon as possible,” CDU Agriculture Minister Julia Kloeckner told reporters Monday. “In the end, it is important that, as coalition partners, we can rely on each other, of course each according to their own profile.”

©2019 Bloomberg L.P.

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