Merkel Moves to Salvage Fourth Term as Coalition Talks Fail
Talks on forming Merkel’s next government collapsed, throwing Europe’s longest-serving leader’s future into doubt.
(Bloomberg) -- German Chancellor Angela Merkel is determined to extend her rule over Europe’s largest economy with or without a governing majority.
Stung by the late-night collapse of coalition talks after a month of negotiations, Merkel is scheduled to confer with President Frank-Walter Steinmeier and then officials of her Christian Democratic Union to find a way forward that may result in minority rule. Steinmeier is due to make a statement at 2:30 p.m. local time.
“As chancellor, as caretaker chancellor, I will do everything to make sure this country continues to be well governed through the tough weeks ahead,” Merkel, 63, told reporters in Berlin in the early hours of the morning. “It’s a day at the very least for a profound examination of Germany’s future.”
Disputes among a grab-bag of disparate parties over migration and other issues led the Free Democrats to walk out of the talks. The CDU’s worst electoral result since World War II in September was still enough to hand Merkel a fourth term. She now faces the prospect of new elections, an option Steinmeier has said he doesn’t favor, or forming a minority administration with shifting alliances, which would run counter to her promise of political stability.
The Social Democrats, the junior partner in Merkel’s last government, may “tolerate” a minority government or support a “grand coalition,” Handelsblatt newspaper cited a senior party official as saying. The Social Democrats, or SPD, had rejected ruling together with the CDU again.
Investors shrugged off the disarray, with both the euro and Germany’s DAX stock index rebounding from earlier losses. Still, the political uncertainty surrounding the European Union’s most powerful leader should be a wake-up call, according to Carsten Brzeski, chief economist at ING-Bank AG.
“Europe has lost another illusion: Germany is no longer the role model of political stability,” Brzeski said.
Germany’s influential DIHK chamber of industry and commerce, a big business lobby, called for “sensible compromises” from all parties.
“A chance has been missed to go beyond ideological boundaries and agree realistic solutions,” DIHK chief Eric Schweitzer told the DPA newswire.
Merkel’s biggest setback since she first won the chancellorship in 2005 follows unusually contentious exploratory talks. Policy divides over immigration, climate and energy proved so wide that even Merkel, once dubbed “the queen of the backrooms,” couldn’t bridge them.
Christian Lindner, the chairman of the Free Democrats, or FDP, said the draft agreement to enter formal coalition talks contained “countless contradictions.” The FDP advocates a “turnaround” plan for the economy that includes more business-friendly measures and wants to allow countries to leave the euro in an orderly way without quitting the EU.
“On the big questions, there were no concessions,” Nicola Beer, Free Democrat general secretary, said on ZDF television.
Populist Surge
Disagreements over limiting migration dogged the talks from the start. It’s a measure of the fallout from the last election, which saw the anti-immigration Alternative for Germany enter parliament with 12.6 percent of the vote.
Many former voters of the CDU and its Bavarian CSU sister party switched allegiance to Alternative for Germany, or AfD, which ran against the establishment in general and Merkel’s asylum policy in particular. Her bloc’s electoral tally tumbled to 32.9 percent, its worst performance since 1949.
“It was our resounding electoral success that was breathing down the negotiators’ necks,” AfD party leader Joerg Meuthen, who welcomed the breakdown of the talks, said on Facebook on Monday.
During the last campaign, the chancellor defended her support for open borders during the refugee crisis in 2015 and 2016, saying allowing about a million asylum seekers into Germany was the right thing to do.
Andreas Scheuer, general secretary of the Christian Social Union, Merkel’s Bavarian allies, said he was disappointed because potential coalition parties had narrowed many of their differences when the FDP pulled the plug.
“These will undoubtedly be difficult weeks for our country,” Scheuer said. “We must now reach clarity on how we want to lead our country into the future. Our citizens want Germany to have a stable government.”
--With assistance from Chad Thomas and Arne Delfs
To contact the reporters on this story: Birgit Jennen in Berlin at bjennen1@bloomberg.net, Brian Parkin in Berlin at bparkin@bloomberg.net, Rainer Buergin in Berlin at rbuergin1@bloomberg.net.
To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net, Chris Reiter, Brad Cook
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