The end of the Schulz honeymoon

Despite the surge in national polls and a huge media hype, Germany's Social Democrats have lost to Angela Merkel's ruling CDU in three state elections. A victory for Martin Schulz in the upcoming federal elections seems increasingly unlikely. Law-and-order will dominate the next four months - a topic closely associated with the CDU. So are there any real alternatives to another grand coalition?

Martin Schulz - Time for more social justice? (Photo: SPÖ OÖ/Alexander Schwarzl)

Most political observers and pundits expected the SPD to win the elections in Nordrhein-Westphalen (NRW), Germany’s most populous state and the party's heartland, last weekend. Many portrayed it as a trial run for the upcoming federal elections in September. After all, the SPD’s chancellor candidate, Martin Schulz, is from NRW and has never failed to mention his connection to the state. In the beginning of the year when Schulz was officially announced as the SPD’s candidate, the party rose quite significantly in the polls. The media as well as SPD politicians and grassroots campaigners were quick to speak of a “Schulz-effect”. In some polls his party surged up to 40% at the federal level. This also resonated in polls at the state level. According to a INSA poll conducted just a month before the elections, the SPD was ahead of the CDU by almost 9%. In the end the CDU was elected by 33% of the population, 1.8% ahead of the SPD. The strong results of the CDU and the FDP will even let them form a coalition - albeit with a tiny majority; something that seemed almost impossible a couple of weeks ago in NRW and at the federal level.

This is already the third state election where the SPD lost and the CDU, Angela Merkel’s ruling party, won by a surprisingly large margin. First in Saarland, then in Schleswig-Holstein and now in NRW. The first two elections were widely explained as not being representative and therefore with little significance for the federal elections. The SPD in Saarland admitted before the elections that it would enter a coalition with the Left Party - a no-no at the federal level. Similarly the result in Schleswig-Holstein was seen as an oddity in an agricultural dominated state mostly untouched by the refugee crisis. But NRW is different. Firstly, it’s the heartland for the SPD, especially the Ruhr Area, and Schulz’s home state. Secondly, Schulz specifically stated that this would be a test run for the federal elections and if Hannelore Kraft, the current NRW prime minister and vice-chair of the SPD, could win the elections, he would be able to achieve a home run in September. Thirdly, the CDU candidate, Armin Laschet, is regarded as a close ally of Angela Merkel and supporter of her refugee policy, as well as belonging to the left leaning wing of the CDU - not exactly what voters are looking for in a conservative party candidate in a campaign focused on law-and-order.

Usually the so-called “Schulz effect” is mentioned together with the demise of Merkel - or what some labelled Merkelmüdigkeit (tiredness of the chancellor). Foreign media, especially the English speaking press, were also convinced that she would never be able to politically survive the refugee crisis and predicted large electoral gains for the AfD, Germany’s right-wing populist party. The stark shift in her party’s refugee policy surely helped her, although the refugee crisis is far from solved. In addition, the chaotic and incompetent behaviour of the AfD should also not be understated. Nevertheless, Laschet managed to convince 33% of the voters that he is the right candidate to lead the most populous state, most likely in a coalition between the CDU and the FDP or possibly even in a “Jamaica coalition” between the CDU, FDP and the Green Party. This could be used as a trial for a future coalition at the federal level - the first such coalition in a large state.

The SPD’s Kraftlosigkeit in NRW

However, it would be foolish to speak of a resurgent “Merkel effect”. After all, in their seven years in power, the SPD-Green coalition under Kraft performed pretty poorly in most areas. They did not manage to reform the education system properly, crime rates are a lot higher than the German average and the state has underperformed in most economic indicators. Despite this the state prime minister continued to make social justice a central topic in her campaign. Voters simply did not believe she would do better this time. Or in other words, the SPD suffered under Kraftlosigkeit (literally weakness - a pun on Hannelore Kraft’s name)

The liberal one-man show

The most interesting result of the two state elections in May is the fact that the FDP won over 10% in both NRW and Schleswig-Holstein. In the 2013 federal elections the party failed to enter the Bundestag and was written off by most commentators at the time. Yet under the leadership of the young and charismatic leader Christian Lindner the party managed to resurge in the polls and is likely to also enter the Bundestag in September. However, another coalition with the CDU under Merkel at the federal level will make it very difficult for the FDP differentiate itself from the CDU and might result in a similar crash in 2021. Therefore, Lindner is right to keep talks open with all parties at the federal level (with the exception of the populist AfD and the socialist Left Party) to establish his party as an alternative with a distinctive liberal profile and not just a proponent of neoliberal and austerity policies. He has specifically stated that he is open to an Ampelkoalition (traffic light coalition) between the SPD, FDP and Green Party at the federal level. He was right to already exclude this possibility in NRW during the campaign, as this would have made his calls for change in the state’s politics not very credible. Even though a CDU-FDP coalition in NRW could be used by the SPD to showcase how such a comfortable partnership would only further neoliberal policies at the federal level. Or in other words, that the FDP is willing to sell itself out to the CDU another time.

Also noteworthy is the fact that the far-left Left Party failed to enter the Landtag (state parliament); a party that’s most popular in Eastern Germany. The Pirate Party, who had been surprisingly strong in the last elections and were represented in the state parliament for the first time, miserably failed this year. Internal fights and a failure to establish a coherent profile outside of privacy rights and digital governance made it an obvious fait.

It won’t be a smooth path for Merkel

So what does the NRW election tell us for the upcoming federal elections? Firstly, the last few years have taught us that a lot can happen in 4 months. The CDU’s powerful position can easily collapse with an unforeseen event, such as an Islamist terror attack or another influx of refugees. Approximately 900,000 African refugees are stuck in Libya alone waiting to make the dangerous crossing to Europe. According to Focus magazine, 200,000 of them could afford the trip this year. Only this year more than 1,000 have died in the Mediterranean Sea. The symptoms of the crisis have not changed and many Africans are desperate to reach Europe. The EU has failed to come up with a long-term solution to the problem, primarily because of the huge differences between the member states and populist national politics.

Further, law-and-order will be the most important in the campaigns for the federal elections, a topic traditionally associated with the CDU. Unlike the NRW election, the CDU won’t be able to attack the SPD for increasing crimes or failed integration policies, as the party has been heading the interior ministry since 2005. Furthermore, still not all refugees that entered Germany in the autumn of 2015 have been properly registered or identified. A recent scandal in the army revealed how easy it is to register as a Syrian asylum seeker under a false identity and without speaking a single word of Arabic. Not to mention the impact an actual terrorist attack committed by a refugee could have on the credibility of the CDU.

Secondly, Kraft’s down-to-earth approach and focus on social justice did not convince the voters in NRW. It seems unlikely that Schulz’s similar approach will enable him the landslide win pollsters were predicting in the beginning of the year. At the time voters were relatively unfamiliar with the former president of the European Parliament. He had not been a prominent figure in German politics and was seen as a fresh face. Merkel is trying to spin this in her favour; rather vote for stability and the experienced leader than the unknown. This resonates well with Germans. Of course, this isn’t entirely true and Schulz is by far not an unknown or inexperienced politician, as President of the European Parliament he has been able to turn himself into one of the most known EU politicians. He has supported Merkel during the refugee crisis, yet criticised her for Germany’s handling during the Greek debt crisis. The latter point might become more prominent in the upcoming months. Schulz has already indicated that he isn’t shy to talk about European solidarity, eurozone governance and euro-bonds. He has also showed strong support to reform the European common currency together with the newly elected French president Emmanuel Macron. Even though Merkel has made similar announcements, she has been critical of some of Macron’s plans in the past. This will make Schulz an easy target for her, who could claim that he would not represent German interests and is willing to turn the EU into a transfer union, where German tax payers are forced to finance southern European states. A very unpopular idea in Germany.

Get prepared for another grand coalition

According to the ARD-Deutschlandtrend poll from last week, in a direct presidential style election, 49% would vote for Merkel and only 36% for Schulz - a 180 degree turn from earlier this year. The Schulz hype has now finally come to an end. Soon he will have to make actual policy suggestions and they will prove that despite all his social justice talk he is actually a pretty centrist politician. He is very unlikely to achieve the result many party strategists were hoping for in January. Although the CDU and FDP managed to win a majority of seats in NRW, it is somewhat unlikely that this will happen at the federal elections, especially in a parliament with 6 parties. NRW and Schleswig-Holstein are both FDP strongholds and the frontrunners were the party’s two most prominent politicians in the entire country. It would be pretty surprising if the party manages to replicate such a result in September. The only real alternative to a grand coalition is, therefore, a “Jamaica coalition”. The probability of such a coalition will greatly depend on whether the pragmatic or the idealist wing (“Realos” vs “Fundis") manages to become the more prominent during the campaign and coalition talks. Unlike in Baden-Württemberg, where the Green Party rules in a coalition with the CDU, in NRW the idealists dominate the party and voters made it clear that most idealist demands are not mainstream enough (although state specific issues also played a great role, such as the performance of the Green education minister, Sylvia Löhrmann). At the moment it is unclear which wing will succeed but a “Jamaica coalition” could be tough to sell to the idealist core voters of the party. The right-wing segment of the CDU will also have difficulties with the idea of forming a coalition with the political "enemy". Further, the differences between the CDU and the Green Party seem to have increased quite dramatically since the refugee crisis. These fundamental disagreements might be quite difficult to bridge.

Yet it is also important to remember the last (and first) time the Green Party formed a coalition with the SPD at the federal level twenty years ago. At the time the conservative establishment saw the coalition highly critically. However, in retrospect the two Red/Green cabinets were one of the more successful in modern German history and have enabled the current economic strength of the country. Furthermore, the colation under Schröder not only reformed the welfare state but was also the first post-WW2 government to send German troops abroad, i.e. the Balkans and Afghanistan. But the new alignment of the SPD also hurt the party at its core; lots of traditional leftist voters saw their traditional political home sold out and not represented in the political system anymore.

In conclusion, the “Jamaica coalition” would provide Germany with a new coalition constellation that could counter the growing disenchantment with politics and the growing feeling that there are no real differences between the CDU and the SPD. The SPD would also greatly benefit from a term in opposition and could use the time to strengthen its profile. However, the more likely outcome is yet another grand coalition with Merkel as chancellor.