FOR ANYONE seeking respite from Donald Trump’s political and financial maelstroms, on April 9th Germany proved happy to oblige. After what by German standards was a relatively swift negotiation, the centre-right Christian Democratic bloc, led by Friedrich Merz, sewed up its coalition talks with the Social Democrats (spd) and published its programme for government. After winning Germany’s election on February 23rd, Mr Merz had shocked observers by questioning nato’s future under Mr Trump and declaring that Europe must “achieve independence from America”. But there were no such fireworks on offer this week. Asked if he had a message for America’s president, Mr Merz replied simply that “Germany is back on track.” Fittingly, many investors spooked by Mr Trump’s caprices abandoned us Treasuries for the calmer waters of Germany’s bond market.
The coalition deal, a 146-page doorstopper, is a workaday, centrist document with few surprises. So distilled are its policy proposals that Markus Söder, head of the Christian Social Union (csu), the Bavarian sister party to Mr Merz’s Christian Democrats (cdu), joked that it was destined for the bestseller charts. Yet it bears few traces of the transformative spirit that seemed to inhabit Mr Merz on the campaign trail, where he portrayed himself as a disrupter who would sweep away the complacency he said had driven Germany into the economic mire in recent years. Perhaps its most ambitious pledge is a literal moon shot: the government wants a German astronaut to join a lunar-landing mission.
One chapter is devoted to cutting bureaucracy, a common gripe that Lars Klingbeil, the spd’s co-leader and the probable next finance minister, appears to have adopted as an animating mission. (He also pledged to rid Germany’s public administration of the faxes on which much of it still runs.) Modest promises on tax, investment, welfare and energy prices point broadly in the right direction; the parties’ worst instincts may have cancelled each other out. One important sentence requires that all promises be subjected to a fiscal test, notes Jens Südekum, an economist at Heinrich Heine University in Düsseldorf. That may restrain some proposed giveaways. Yet it is hard to spot any serious reckoning with deeper issues, including Germany’s looming demographic crunch. Many have been booted to commissions.
It is a similar story on immigration. In January Mr Merz jolted the election campaign with a rash promise to unilaterally turn away asylum-seekers at Germany’s borders, even voting with the hard-right Alternative for Germany (afd) to push a symbolic anti-immigration measure through parliament. That has been watered down to a pledge to reject irregular migrants “in co-ordination with our European neighbours”. Many recipients of protection in Germany will be barred from bringing over family members, and deportations will be accelerated, pleasing hardliners in the CDU’s ranks. Yet in truth developments outside Germany will have a greater impact on the immigration numbers. Thanks in part to the fall of Bashar al-Assad in Syria, the number of asylum claims in Germany has plummeted.
Caution is the watchword on foreign policy, too. Soon after his head-turning speech on election night Mr Merz pushed a whopping constitutional change through the Bundestag, exempting most defence spending from the “debt brake”, which constrains government borrowing, and establishing a €500bn ($547bn) infrastructure fund. Already concerned by the poor election result of the cdu/csu, many in his own ranks were deeply unnerved. Mr Merz justified his U-turn in part by pointing to the Trump shock.
Yet there is little of that spirit in the coalition agreement, notes Jana Puglierin, who runs the Berlin office of the European Council on Foreign Relations think-tank. The text contains familiar pabulum about the “great success story” of the relationship with America and a commitment to strengthen transatlantic links within nato. There are few ideas on Europe. Meanwhile, despite the recruitment difficulties of the Bundeswehr, the cdu/csu appears to have failed to convince the spd to restore a form of conscription, at least for now. “It looks like a lot of old wine in new bottles,” says Ms Puglierin. “It doesn’t do anything for Merz’s credibility.”
Indeed, there is a widespread feeling inside the cdu that Mr Merz, a political naïf who has never held executive office, prepared badly in the coalition talks and allowed himself to be steamrollered by the spd—which, bar a four-year break, has been in government since 1998. Assuming that the spd ratifies the deal in a membership vote later this month, Mr Merz will take office in May confronting a sea of scepticism: even 28% of his party’s voters do not believe he has what it takes. The cdu/csu has slid in polls since the election (see chart); this week one saw it fall behind the afd for the first time. Were an election held tomorrow the governing parties would not command a majority.
Yet this is “only a temporary picture”, says Günter Krings, a cdu mp. “It’s important to stay calm and get down to work.” Last month’s debt deal should at least ensure that Mr Merz’s government is not waylaid by the sort of fiscal rows that felled its predecessor, under Olaf Scholz. And the signs are that the senior coalition figures, chief among them Messrs Merz and Klingbeil, have forged an effective working relationship. Returning an export-dependent economy to growth will not be easy in a world falling prey to trade wars, but at least they share the goal.
The deal comes not a moment too soon for Germany’s partners. Many in Europe lamented the retrenchment of German diplomacy under Mr Scholz, and the country’s voice has been conspicuously absent amid the recent geopolitical tumult. Allies welcomed Mr Merz’s move on the debt brake as an early sign of his commitment to European security. But rarely has a coalition agreement emerged into such a chaotic world. It will fall to Germany’s next chancellor to ensure he can navigate it. ■
