Europe Politics

Merkel's leadership under threat as political extremes in Germany gain support

Key Points
  • The position of German Chancellor Angela Merkel is looking increasingly fragile after a weekend of political upset and potentially more to come from a source closer to home – the government's coalition partner, the SPD.
  • Merkel's conservative party, the Christian Democratic Union (CDU) was beaten into third place in a regional election on Sunday, overtaken by both the far-left party Linke and then far-right party, the Alternative for Germany (AfD).
German Chancellor Angela Merkel gives a statement to the media following an agreement over the weekend between leaders of the coalition government partners over the fate of domestic intelligence head Hans-Georg Maassen on September 24, 2018 in Berlin, Germany.
Michele Tantussi | Getty Images News | Getty Images

German Chancellor Angela Merkel's grip on government is looking increasingly fragile after a notable political defeat over the weekend as well as heightened tension with coalition partner, the SPD.

Merkel's conservative party, the Christian Democratic Union (CDU) was beaten into third place in a regional election on Sunday, overtaken by both the far-left party Linke and then far-right party, the Alternative for Germany (AfD).

The election result in Thuringia, eastern Germany comes after similar losses for the CDU in other states, as the party struggles to beat back growing support for parties at the poles of the political spectrum.

Merkel's CDU saw its vote decrease in the eastern states of Saxony and Brandenburg, as did the party's coalition partner, the Social Democratic Party (SPD) while the AfD gained. The CDU and SPD managed to cling on to the leadership of both regions.

The AfD remains a real and growing threat. The party that came to the fore amid Germany's migrant crisis and has tapped into discontent over government policies ranging from immigration to the economy. It has seen its vote increase over a sustained period, shifting it from a populist fringe party to a mainstream threat to Germany's established parties.

Meanwhile, the CDU-SPD governing coalition (which also includes the CDU's Bavarian sister party, the Christian Social Union or CSU) looks more vulnerable at a national level given tensions over reforms and policy in government.

The Social Democrats are in the midst of trying to elect a new party leader before facing the decision of whether to stay in its partnership with the CDU – one that some party members feel has damaged the party's standing with its supporters.

The SPD agreed to take part in the latest coalition government only after the CDU's talks with the FDP and the Greens failed to form a coalition following a 2017 election, so it was always seen as something of a reluctant participant in the government.

On Sunday, Finance Minister Olaf Scholz, who favors remaining in a coalition with the CDU, came first in a party vote to elect a new leader at the weekend but fell short of a majority. A run-off vote will take place next month and a party conference in December must then formally approve the leadership vote, Reuters reported.

Merkel 'under pressure'

Scholz's main rivals in the leadership race have been more equivocal on staying in the coalition, however, and that could bode ill for the government. Economists at Citi's Research department described Merkel, who is serving her final term in office and is due to leave in 2021, as being under pressure.

"A premature end to Chancellor Angela Merkel's final term is once again on the cards," economists led by Christian Schulz said in a note Monday.

"Grand coalition parties performed badly in regional elections in Thuringia and finance minister Olaf Scholz could still lose the SPD leadership contest. The twilight of Merkel's tenure is accentuated by the weak economy and foreign policy challenges such as U.S. trade wars, Brexit and renewed worries about a potential refugee influx," they noted, although they added that "Merkel should not be written off too early."

Party conferences for the CDU on November 22/23 and for the SPD on December 6-8 could decide Merkel's fate.

Charles Lichfield, Europe analyst at Eurasia Group, said in a note Friday that the research consultancy's soft base case (given a 55% probability) is that the coalition survives the SPD's early-December consultation party conference, when delegates will be asked whether the party should stay in or leave the grand coalition.

For Citi's economists, the vulnerability in the polls for both the SPD and CDU could ultimately prevent a government breakup.

Although "neither party can be satisfied with the government ... neither party is ready for a snap election either," they said. They noted that the SPD is polling around 14% nationally, down from 21% in the last election, while new CDU leader Annegret Kramp-Karrenbauer features towards the bottom of popularity rankings and is under what they see as renewed pressure from the party's right-wing members.

"If Merkel gives both parties reasons to continue until the next scheduled election in 2021, they probably will. That could involve personnel changes, including AKK's position (and thus Merkel's legacy), or more money, although probably not enough to move the dial in terms of the economic outlook. Our base case remains that Merkel can continue until 2021."

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