Social Democrats vote in favor of coalition talks in Germany

With a difference of less than 100 votes, the social democratic party (SPD) have decided to continue coalition talks with Merkel’s Christ Democrats (CDU). This was an important victory for Merkel as she would be forced, in case of a “no” vote, to build a minority government or call for new elections, scenarios in which Germany would remain without a government for several months. The vote, however, means no commitment to a coalition. Exploratory talks are likely to continue until a final agreement is reached which will also require the approval of SPD members to become binding. With this result, Germany is likely to have a government by Easter.

It was not an easy win for SPD leader Martin Schulz. He faced a fierce resistance within the party, in particular from its youth movements, who spearheaded the campaign against a reedition of a Great Coalition. Despite the victory, the “yes” from his party was no carte blanche for Schulz. During the afternoon debates in the SPD congress in Bonn, several party members highlighted the role of the SPD as an alternative to the conservative alliance led by Merkel and the cap for refugees as a redline for the party to agree on taking part in the new government. The cap for refugees was one of the themes covered by the preliminary agreement between the SPD and the CDU earlier this week which will likely have to be renegotiated if Schulz wants his part to approve a coalition agreement.

Another concern among SPD member is the electoral success of their party. Last elections were the worst result ever for the social democrats who lost votes not only on the left but also the populist right-wing AfD. Largely to blame is the lack of an SPD footprint in the last government. Merkel hijacked the social agenda of the social democrats trapping Schulz into a situation in which the SPD and CDU had no meaningful divergences that justified his candidacy to the chancellorship. Merkel also paid her price for this move and had to witness a rebellion of its more conservative voters, many of whom also migrated to the AfD.

The result of the vote this afternoon is also good news for Germany’s European partners, in particular France, country that, since the election of Emmanuel Macron, became Germany’s closest ally. Merkel and Macron met this week to discuss their joint vision for a post-Brexit Europe which includes new plans for European defense and the economy of the Eurozone. With the need for new elections or a minority government in Germany, Macron and Merkel would likely have to halt their agenda of reforms missing an important window left by the pessimistic atmosphere regarding the impact of Brexit in the economy of the UK. Differently from the issue of refugees, the strengthening the European Union is a topic in which the CDU and the SPD are aligned. An increase in the German budget for the EU was already agreed in the preliminary talks between the two parties and will hardly be an issue in the weeks to come.

Although the approval of the SPD this afternoon is no guarantee of successful talks, Schulz cleared his way to at least move on with negotiations, also with a much better idea of the limits imposed by his party on sensitive topics such as the refugees’ cap. Both parties, CDU and SPD, seem willing to prevent a minority government or new elections, however, as Schulz stressed in his remarks before the vote, “we must not govern at any cost, but neither should we refuse to govern at any cost”. Complex negotiations will follow, but unless an unbridgeable gap emerges between Merkel’s and Schulz’s parties, the most likely outcome is a new Great Coalition.