tag:theconversation.com,2011:/id/topics/martin-schulz-36078/articlesMartin Schulz – The Conversation2018-03-12T12:23:00Ztag:theconversation.com,2011:article/931532018-03-12T12:23:00Z2018-03-12T12:23:00ZGermany’s Social Democrats: where did it all go wrong?<p>In March 2017, Martin Schulz was announced, with great fanfare, as the new leader of Germany’s Social Democratic Party (SPD). As the party’s candidate for chancellor, <a href="https://www.theguardian.com/world/2017/mar/24/martin-schulz-boost-to-germanys-spd-raises-stakes-for-angela-merkel">“Saint Martin”</a> was set to storm the 2017 elections, oust Angela Merkel and bring the SPD back to power.</p>
<p>Twelve short months later, the SPD’s dreams lie in tatters. Its 20% vote share in the September vote was its <a href="https://theconversation.com/angela-merkel-wins-a-fourth-term-in-office-but-it-wont-be-an-easy-one-84578">lowest ever</a> in the history of the Federal Republic of Germany. After the election, Schulz committed the party to an opposition role as a point of principle, rather than entering another coalition with Merkel’s CDU. </p>
<p>However, when the CDU failed to form an alternative coalition with two smaller parties, Federal President Frank-Walter Steinmeier persuaded Schulz to backtrack on that commitment in the interests of political stability and to work with Merkel on a new “GroKo” (grand coalition). The SPD’s <a href="https://theconversation.com/germanys-grand-coalition-gets-the-green-light-but-pressure-mounts-on-spd-leader-martin-schulz-90473">U-turn on the GroKo</a> was felt by many in the party as a <a href="https://newsocialist.org.uk/anti-coalition-campaigning-spd/">betrayal</a>. Since then the SPD’s leadership has imploded, its Young Socialists (<a href="https://www.jusos.de/">Jusos</a>) group has mutinied and the party has been widely ridiculed in the press. Where did it all go so horribly wrong?</p>
<h2>Social Democrats in the doldrums</h2>
<p>In many ways, the downturn in the German SPD’s fortunes mirrors the fate of similar parties elsewhere in Europe. Structural changes in European economies and societies have played out badly for social democrats in general.</p>
<p>A decline in manufacturing in favour of an expanding services sector has undermined social democratic parties’ traditional voting “clienteles”. Globalisation and the progressive liberalisation of employment markets have weakened the collective power of labour, traditionally the bedrock of parties of the left in European countries. </p>
<p>The emergence of the gig economy and the trend towards casual labour are resulting in a workforce with fragmented, often conflicting interests. European social democrats have generally failed to keep up with the changing concerns of low-income workers –- and the German SPD has been no exception.</p>
<h2>The rise and fall of Martin Schulz</h2>
<p>Schulz’s dynamic approach and self-styled image as an establishment “outsider” was hoped to spark a fresh connection with the German electorate. But this persona ultimately worked against him. Most of Germany’s party leaders have built a public profile as government ministers at federal level. In contrast, Schulz had forged his political career largely at the <a href="http://www.independent.co.uk/news/world/europe/former-eu-parliament-president-martin-schulz-rival-angela-merkel-germany-elections-sdp-a7544151.html">European level</a>. His only notable political post in Germany had been as a small-town mayor. As such, he was virtually unknown to the German public. Compared with Merkel – a high-profile national and international leader – Schulz was the invisible man. The <a href="https://www.economist.com/blogs/kaffeeklatsch/2017/05/schulz-effect-rip">“Schulz effect”</a> failed to deliver in key regional elections in Saarland, Schleswig-Holstein and North Rhine-Westphalia, leaving the SPD <a href="http://www.politico.eu/article/martin-schulz-effect-fades-further-poll/">struggling to reignite its federal campaign</a>.</p>
<p>Worse, Schulz seemed to lack political sense. He boxed himself in with points of principle in the fluid political situation after the election, only to have to retract them later. Having claimed he would never serve in a Merkel government, he later angled for the top job of foreign minister in the new cabinet. His credibility was fatally undermined. His vacillations ultimately contributed to his resignation as party leader.</p>
<h2>You emotional bread roll!</h2>
<p>The deep divisions in the SPD over leadership and policy added to the party’s woes. These came to the fore during the GroKo negotiations. Tensions between Schulz and the current foreign minister, Sigmar Gabriel, exploded in a playground spat when Gabriel, quoting his little daughter Marie, called Schulz “the man with the hairy face”. Schulz retaliated by calling Gabriel an <a href="https://www.politico.eu/article/martin-schulz-to-sigmar-gabriel-you-are-just-as-much-a-bread-roll-of-emotion-as-i-am/">“Emotionsbrötchen”</a>. Literally an “emotional bread roll”, the unflattering term carried shades of “big girl’s blouse” and “drama queen”.</p>
<p>The row has done nothing for the party’s public image. A recent opinion poll showed that 58% of respondents believed the SPD was <a href="http://www.dw.com/de/ard-deutschlandtrend-zweifel-an-der-regierungsf%25C3%25A4higkeit-der-spd/a-42787544">no longer fit for government</a>. In spite of its record allocation of ministerial posts, the SPD will enter the new coalition as a weakened force. The designated minister for the Home ministry, the Christian Social Union politician Horst Seehofer, has already <a href="http://www.dw.com/en/csus-horst-seehofer-confirms-he-will-join-angela-merkels-cabinet/a-42793190">exploited the situation</a> by engineering the transfer of construction policy from the SPD’s environment portfolio to his own.</p>
<p>Schulz’s failure has highlighted the need for a generational change in the SPD’s leading elites. The top-down designation of Schulz’s deputy <a href="http://www.dw.com/en/andrea-nahles-would-take-the-reins-of-a-troubled-spd/a-40706641">Andrea Nahles</a> (47) as the new leader ignores the <a href="https://newsocialist.org.uk/anti-coalition-campaigning-spd/">Jusos</a>’ demands for greater transparency and democracy within the party.</p>
<p>Inevitably, the coalition agreement between Merkel and the SPD focuses on those issues on which there is the greatest agreement between the coalition partners. These included minor reforms to the health service to smooth out the worst inequalities and gaps in provision, a focus on digital modernisation and some minor measures to assuage Germany’s emerging housing crisis. These policy guidelines <a href="https://theconversation.com/germany-finally-has-a-government-but-the-spd-grassroots-could-still-derail-it-91435">fall far short</a> of the root-and-branch reform that SPD members had hoped for in health and housing.</p>
<p>The new GroKo only cements the SPD’s long-standing problem in forging a policy identity both independent of the CDU and meaningful to a new, stable cohort of voters. To achieve this, it needs to address some of the leading <a href="http://www.euronews.com/2017/07/26/germany-s-working-poor">concerns of the working poor</a> in Germany: low pay rates, a long overdue pensions reform; equal access to health services; reform of the education sector; and the entry and integration of immigrants.</p><img src="https://counter.theconversation.com/content/93153/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Patricia Hogwood does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The SPD is in government with Angela Merkel again after signing a coalition deal. But life has been harder for the social democrats.Patricia Hogwood, Reader in European Politics, University of WestminsterLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/914352018-02-07T17:45:13Z2018-02-07T17:45:13ZGermany finally has a government – but the SPD grassroots could still derail it<p>More than four months after Germany’s federal election, the countries’ two leading parties have finally agreed to form another “grand coalition” (GroKo). So why is nobody cheering?</p>
<p>Few see the continuation of Angela Merkel’s previous government as an exciting prospect. Although the GroKo option was one of only two coalition formations with a potential majority in parliament, it was soon branded a “<a href="http://www.handelsblatt.com/my/meinung/kommentare/kommentar-zu-groko-verhandlungen-koalition-der-grossen-verlierer/20872802.html?ticket=ST-544904-DaoJEbfUD29wedpqOwDv-ap3">coalition of losers</a>”. The GroKo parties – the Christian Democratic Union, the Christian Social Union and the Social Democratic Party – all lost votes in last September’s election. The latest polls on voting intentions and the party leaders’ personal ratings show that they are <a href="http://www.forschungsgruppe.de/Aktuelles/Politbarometer/">still falling</a>.</p>
<p>Moreover, the GroKo will only take office if the policy programme agreed by the party leaders is formally adopted by the SPD party membership. Between a coalition agreement that favours the Union parties in many key areas and a militant and determined anti-GroKo movement within the SPD, it is by no means certain that the membership’s agreement will be forthcoming.</p>
<h2>Waiting for GroKo</h2>
<p>The SPD has laboured under a tangle of conflicting pressures over its role in the GroKo. SPD leader Martin Schulz <a href="https://theconversation.com/germanys-grand-coalition-gets-the-green-light-but-pressure-mounts-on-spd-leader-martin-schulz-90473">prevaricated for weeks</a>, severely testing his <a href="https://www.focus.de/politik/deutschland/richtungsstreit-in-spd-wenn-die-grosse-koalition-kommt-waeren-diese-politiker-unhaltbar_id_7895086.html">credibility</a> and arguably compromising his ability to lead his party.</p>
<p>Schulz’s failures opened up a can of worms within the party. They also mobilised a grassroots anti-GroKo movement under the leadership of the radical “Young Socialists” (Jusos). In December 2017, the party conference’s crucial endorsement of the GroKo talks <a href="https://theconversation.com/germanys-grand-coalition-gets-the-green-light-but-pressure-mounts-on-spd-leader-martin-schulz-90473">squeaked through</a> with a narrow majority. Inspired by UK Labour’s <a href="http://www.peoplesmomentum.com/">Momentum</a> movement, <a href="http://www.rp-online.de/politik/deutschland/groko-463723-spd-mitglieder-duerfen-ueber-grosse-koalition-abstimmen-aid-1.7374417">more than 24,000</a> new members – mainly anti-GroKo – joined the SPD before the deadline of February 6 2018 in the hope of influencing the party membership’s deciding vote in the coming weeks.</p>
<h2>Persuading the SPD grassroots</h2>
<p>Some SPD members oppose the GroKo on principle. Others dread the prospect of another parliamentary term without significant policy alternatives. There is little hope that Merkel’s “same old, same old” approach will change and this threatens to dilute the SPD’s main election promises. While polls show that a majority of SPD voters (<a href="http://www.forschungsgruppe.de/Aktuelles/Politbarometer/">60%</a>) supports the GroKo, significant compromises have been made to reach a deal. Many party members will not view the concessions kindly.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/205341/original/file-20180207-74512-n613si.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/205341/original/file-20180207-74512-n613si.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/205341/original/file-20180207-74512-n613si.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/205341/original/file-20180207-74512-n613si.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/205341/original/file-20180207-74512-n613si.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/205341/original/file-20180207-74512-n613si.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/205341/original/file-20180207-74512-n613si.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The SPD’s youth wing votes against a coalition at an earlier stage in the talks.</span>
<span class="attribution"><span class="source">EPA</span></span>
</figcaption>
</figure>
<p>The two policy areas that tested the negotiators in the final days – health and labour policy – encapsulate the different visions for German society embraced by the union parties (the CDU and CSU) and the SPD respectively. The union parties wanted to preserve a neoliberal capitalist model that allows the wealthy to pay their way to better provision, while the SPD wanted root-and-branch reforms.</p>
<p>Within the health service, the SPD wanted to introduce a national health insurance scheme to end a two-tier health service that favoured those with private health insurance. It also wanted to ban medical professionals for charging more for private services. Measures included in the coalition agreement include additional funding to upgrade healthcare provision for poorer communities and to shift the balance of insurance costs from the individual to the employer. However, they stop short of the more fundamental reform foreseen by the SPD.</p>
<p>The SPD also wanted to ban employers from issuing fixed contracts without specific justification and to protect family life by requiring larger employers to offer a one-off, time-limited period of part-time work to employees. The <a href="http://www.handelsblatt.com/downloads/20936422/2/koalitionsvertrag_7-2-2018.pdf">negotiators agreed</a> to limit the use of unjustified fixed contracts and to ban the repeated use of such time-limited contracts. The SPD also secured minor concessions on the <a href="http://www.handelsblatt.com/downloads/20936422/2/koalitionsvertrag_7-2-2018.pdf">right of return</a> to full-time employment after a period of part-time work. As part of the coalition deal, the SPD gains control of the Ministry for Labour and Social Affairs. This has been greeted as a triumph for the SPD, but could also mean it will carry the can for the GroKo’s half-hearted reforms.</p>
<p>The SPD membership may also baulk at voting for the GroKo’s immigration and taxation deals. They will be dismayed, if not entirely surprised, to see the Ministry of the Interior go to the right-wing CSU. This ministry includes the controversial domain of immigration. For some SPD members, the coalition agreement on refugee quotas and on family reunion will amount to an attack on foreign incomers’ human and civil rights.</p>
<p>The interior ministry will also gain a new brief on “Heimat” – a concept of homeland policy that focuses on Germanness and German identity. Many SPD members will read this as a licence to pursue policies that discriminate against foreigners. The SPD’s longstanding aim to bring in a wealth tax was knocked back at an earlier stage of the negotiations. They had wanted to increase the <a href="http://www.handelsblatt.com/politik/deutschland/groko-gespraeche-tag-drei-steuerstreit-bei-den-sondierungen/20826514.html">highest tax band</a> from 42% to 45% while simultaneously raising the annual income threshold for this band from earnings of just under €55,000 to €60,000.</p>
<p>During the election campaign, Schulz swore <a href="http://www.handelsblatt.com/politik/deutschland/koalitionsverhandlungen-rolle-von-schulz-in-moeglicher-groko-noch-unklar/20926340.html">he would not serve in a Merkel government</a>. Now he has <a href="http://www.sueddeutsche.de/politik/eil-schulz-will-parteivorsitz-aufgeben-1.3857149">announced</a> that he will accept the post of foreign minister – ousting the popular Sigmar Gabriel – and give up the party leadership to his deputy, <a href="https://uk.reuters.com/article/uk-germany-politics-spd-schulz/germanys-schulz-to-step-down-as-spd-leader-nahles-to-take-over-sueddeutsche-zeitung-idUKKBN1FR1KX">Andrea Nahles</a>. While his departure from the top party post will reassure many party members, a new leader may not be enough to convince the party grassroots over the prospect of another spell in office with the CDU and CSU.</p><img src="https://counter.theconversation.com/content/91435/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Patricia Hogwood does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Martin Schulz could face a major backlash from his own party after breaking his promise not to enter government with Angela Merkel’s CDU again.Patricia Hogwood, Reader in European Politics, University of WestminsterLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/904732018-01-22T12:01:53Z2018-01-22T12:01:53ZGermany’s grand coalition gets the green light – but pressure mounts on SPD leader Martin Schulz<p>After tense debate, Germany’s Social Democratic Party (SPD) <a href="http://www.spiegel.de/politik/deutschland/spd-parteitag-so-laeuft-der-tag-der-entscheidung-in-bonn-ab-a-1188947.html">conference in Bonn</a> gave the go-ahead for the party to enter formal government coalition negotiations with the union parties, Angela Merkel’s Christian Democratic Union (CDU) and its Bavarian sister party the Christian Social Union (CSU). </p>
<p>If successful, the three parties will form a new grand coalition, known as the “GroKo”, continuing the configuration that held power in Germany between 2013 and the September 2017 elections. Coalition talks were endorsed by a slim majority on January 22 – only <a href="http://www.spiegel.de/politik/deutschland/spd-parteitag-delegierte-stimmen-fuer-koalitionsverhandlungen-a-1189028.html">54.6%</a> of the 600 party delegates.</p>
<p>The immediate reaction was one of relief. Had the vote failed, SPD party leader Martin Schulz’s career would have been on the line. He made a risky public U-turn over the talks. Immediately after the September 2017 general election, he had refused to enter a government coalition and <a href="https://www.reuters.com/article/us-germany-election-spd/german-social-democrats-vow-to-rebuild-in-opposition-after-election-drubbing-idUSKCN1BZ0YQ">committed his party</a> to an opposition role in the Bundestag, the German parliament. After the <a href="https://theconversation.com/germany-enters-political-no-mans-land-as-angela-merkel-wrestles-with-election-fallout-87778">failure</a> of the experimental “Jamaica” coalition round between the union parties, the Greens and the neo-liberal Free Democratic Party (FDP), Schulz <a href="http://edition.cnn.com/2018/01/20/europe/germany-limps-to-new-government-intl/">reconsidered</a> and <a href="http://www.spiegel.de/politik/deutschland/spd-parteitag-entscheidung-fuer-martin-schulz-a-1188689.html">started campaigning vigorously</a> for a new GroKo.</p>
<p>Schulz’s relief was shared by the wider political establishment. Had the conference rejected the talks, the alternatives would have been inconclusive at best and, at worst, might have realised Germany’s historic fear of government instability. If the GroKo had been rejected even before talks began in earnest, the <a href="https://www.gesetze-im-internet.de/englisch_gg/englisch_gg.html">federal president</a>, Frank-Walter Steinmeier, would have had to choose between naming a minority government under Merkel, the current chancellor, or calling fresh elections.</p>
<h2>Schulz still under pressure</h2>
<p>For Schulz, relief over the conference outcome will be short-lived. His political future remains far from certain.</p>
<p>First, his dramatic U-turn over the GroKo not only <a href="https://www.focus.de/politik/deutschland/richtungsstreit-in-spd-wenn-die-grosse-koalition-kommt-waeren-diese-politiker-unhaltbar_id_7895086.html">dented his personal credibility</a> as SPD leader, but opened up a fundamental divide over the future direction of the party. At the Bonn conference, fear of even greater electoral losses than the historic low of just over 20% gained in 2017 buttressed support for the party line. The pro-GroKo movement is backed by 12 SPD mayors from major cities and a <a href="http://www.spiegel.de/politik/deutschland/spd-buendnis-um-gesine-schwan-und-wolfgang-thierse-wirbt-fuer-groko-a-1188665.html">broad-based alliance</a> spanning the various party factions and including several party dignitaries.</p>
<p>Spearheading the “NoGroKo” campaign is <a href="http://www.dw.com/en/the-young-spd-politician-who-could-topple-angela-merkel-and-martin-schulz/a-42200023">Kevin Kühnert</a>, the head of the party’s Jusos youth organisation. Controversially dubbed the “<a href="http://www.deutschlandfunk.de/zwergenaufstand-kritik-an-dobrindts-wortwahl.1939.de.html?drn:news_id=839120">Dwarves Revolt</a>” by <a href="https://www.youtube.com/watch?v=CUsj7O_8QYE">Alexander Dobrindt</a>, the regional chair of the CSU, the NoGroKo movement draws support from a party members calling for a fundamental renewal of the party to arrest its alarming decline in the polls. Kühnert has voiced concerns about an “eternal opposition” role for the SPD. </p>
<p>His claim that he is sick of seeing the party run into <a href="https://soundcloud.com/user-6264341/wie-gefahrlich-wird-der-zwergenaufstand-fur-martin-schulz">the same brick wall time and time again</a> struck a chord within the party and mobilised opposition to the leadership.</p>
<p>The NoGroKo group’s main target is in fact its own party’s leadership. The movement believes that the current party bosses are complacent and out of touch with the party grassroots. Now the genie is out of the bottle, even a successful conclusion to the GroKo negotiations won’t force it back in. Schulz has not overcome an <a href="https://soundcloud.com/user-6264341/wie-gefahrlich-wird-der-zwergenaufstand-fur-martin-schulz">existential</a> party crisis, he has merely postponed it.</p>
<h2>Challenge from the party grassroots</h2>
<p>At the Bonn party conference, Schulz faced down the <a href="https://soundcloud.com/user-6264341/wie-gefahrlich-wird-der-zwergenaufstand-fur-martin-schulz">fundamental rejection</a> of any grand coalition staged by the NoGroKo movement. His next intra-party challenge will be fought on a different level entirely. If all goes smoothly – <a href="http://www.spiegel.de/politik/deutschland/spd-entscheidung-zur-groko-so-reagieren-die-anderen-parteien-a-1189033.html">by no means a foregone conclusion</a> – a government coalition agreement with the union parties could be finalised as early as next month. </p>
<p>But before the SPD can enter a new government, the coalition agreement must be endorsed by the party’s <a href="http://www.spiegel.de/politik/deutschland/spd-parteitag-delegierte-stimmen-fuer-koalitionsverhandlungen-a-1189028.html">440,000</a> members. The whole processs of coalition negotiation and endorsement is likely to take until Easter at the earliest. Unfortunately for Schulz, the delegates at the Bonn conference and the grassroots membership represent two entirely different intra-party clienteles. To convince both will stretch Schulz’s damaged credibility to its limits.</p>
<p>In appealing to the grassroots, Schulz is hampered by the fact that the broad guidelines so far agreed for a new coalition do not amount to the kind of new direction envisaged by the SPD’s supporters. The position paper released by the negotiators was <a href="https://www.tagesschau.de/newsticker/liveblog-sondierungen-101.html#Merkel-macht-Dampf-bei-Koalitionsgespraechen">quickly dismissed</a> by FDP leader Christian Lindner as a “rehash of the old Grand Coalition”. </p>
<p>Worse, 63% of a representative poll of all Germans believe that the CDU has asserted its aims <a href="http://www.forschungsgruppe.de/Aktuelles/Politbarometer/">more successfully</a> in the guideline coalition agreement than the SPD. While the agreement includes some SPD initiatives in <a href="https://www.politico.eu/article/martin-schulz-gets-muted-response-for-grand-coalition-pitch-spd-cdu-angela-merkel/">healthcare and education</a>, measures to protect the vulnerable are unlikely to go far enough for many SPD members. </p>
<p>For SPD members, the keyword is “citizen security” – a term that translates as “social equity”. Many will not be prepared to support a new GroKo that does not aim for genuine reforms to close the gap between rich and poor. The SPD leadership has already angered the union parties by suggesting that its negotiators will now be looking to <a href="http://www.augsburger-allgemeine.de/politik/SPD-will-in-GroKo-Verhandlungen-Nachbesserungen-durchsetzen-id42915776.html">improve the SPD’s deal</a> in key areas of labour, health and refugee policy. In particular, there are calls from within the SPD to end unjustified fixed-term labour contracts, reform the current “two-class” health system that privileges the wealthy, and moderate the hard line on refugee and integration policy adopted by the Bavarian CSU. </p>
<p>All this means that Schulz can expect a rollercoaster ride over the coming months.</p><img src="https://counter.theconversation.com/content/90473/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Patricia Hogwood does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Germany’s Social Democrat Party leadership voted in favour of a new coalition with Angela Merkel’s block – but it’s far from plain sailing ahead.Patricia Hogwood, Reader in European Politics, University of WestminsterLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/886062017-12-06T10:14:24Z2017-12-06T10:14:24ZWhy Germany’s Social Democrats should enter government with Angela Merkel again<p>Bonn Is Not Weimar was the title of a 1956 book by the Swiss journalist Fritz René Allemann. He argued that the (West) German Federal Republic, founded in 1949 and with Bonn as its capital, had devised a stable form of parliamentary government which had successfully avoided the political chaos and weak, short-lasting coalitions of the <a href="https://www.britannica.com/topic/Weimar-Republic">Weimar Republic</a>.</p>
<p>The recent <a href="https://theconversation.com/uk/topics/german-election-2017-40386">federal elections</a>, held in September 2017, appear to have marked an abrupt end to that stability. A total of six parties (seven if we include Angela Merkel’s Bavarian ally, the CSU) are now represented in the Bundestag or federal parliament. That’s the largest number since it was decided in 1952 that every party needed to win a minimum of five per cent of the overall vote to secure a place in parliament. </p>
<p>The two major parties, Merkel’s conservative Christian Democrats (CDU) and the centre-left Social Democrats (SPD), both lost support, while in another post-war first, an extreme right-wing party, the anti-immigrant <a href="https://theconversation.com/germanys-afd-how-to-understand-the-rise-of-the-right-wing-populists-84541">Alternative für Deutschland (AfD)</a>, entered the Bundestag with 12.6% of the vote and 94 seats.</p>
<p>The SPD initially refused to continue as Merkel’s junior partner in a grand coalition, instead expressing a desire to go into opposition. The CDU/CSU was therefore obliged to look elsewhere – to the Greens and the pro-business Free Democrats (FDP) – to form a coalition. But that plan failed when the FDP walked out of talks on November 19.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/197625/original/file-20171204-22982-1w1aeoz.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/197625/original/file-20171204-22982-1w1aeoz.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/197625/original/file-20171204-22982-1w1aeoz.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=268&fit=crop&dpr=1 600w, https://images.theconversation.com/files/197625/original/file-20171204-22982-1w1aeoz.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=268&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/197625/original/file-20171204-22982-1w1aeoz.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=268&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/197625/original/file-20171204-22982-1w1aeoz.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=337&fit=crop&dpr=1 754w, https://images.theconversation.com/files/197625/original/file-20171204-22982-1w1aeoz.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=337&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/197625/original/file-20171204-22982-1w1aeoz.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=337&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The election results in full.</span>
<span class="attribution"><a class="source" href="https://www.bundestag.de/dokumente/textarchiv/2017/kw39-wahlergebnis/527056">bundestag.de</a>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>Just three alternatives now present themselves. The first is to stage fresh elections. However, this could easily end in another indecisive result and even further gains for the AfD. The second is to form a new grand coalition. SPD leader Martin Schulz showed some signs of moving in this direction by engaging in <a href="https://www.theguardian.com/world/2017/nov/27/german-grand-coalition-talks-unlikely-to-begin-until-new-year">preliminary talks</a> with the CDU and CSU but no deal has yet been struck.</p>
<p>Finally, the SPD could decide to “tolerate” a <a href="https://theconversation.com/heres-why-angela-merkel-would-be-better-off-in-a-minority-government-87884">minority CDU/CSU administration</a>. It would not formally join the federal government and would reserve the right to oppose its overall programme and present alternative policies, but would be open to approving (or rather not blocking) parliamentary legislation on a case-by-case basis in order to prevent complete political paralysis.</p>
<h2>The risks they face</h2>
<p>All of these options present significant risks for the SPD. As the oldest party in Germany (it was founded in 1875), and one that experienced several dramatic splits and changes of direction in the 20th century, it arguably has most to lose from the recent fragmentation of party politics. This is because it risks haemorrhaging votes both to its main socialist rival, the Left, and to the populist, anti-system right. </p>
<p>It has been widely accepted that the SPD’s historically poor election result was punishment from voters for its coalition years. In large parts of eastern Germany it is now in fourth position, behind the CDU, the AfD and the Left. All this makes it even harder for the party to forge ahead nationally to beat the CDU/CSU at the next federal election while maintaining a position inside the governing coalition.</p>
<p>It’s also worth noting that if the SPD did agree to another grand coalition, the far-right AfD would become the largest opposition party in parliament.</p>
<p>But accepting a minority CDU/CSU administration comes with all the same risks as a grand coalition without any of the advantages of government. The last time the SPD tolerated a right wing government was between 1930 and 1932. Back then, the minority administration led by the conservative Catholic politician <a href="https://www.britannica.com/biography/Heinrich-Bruning">Heinrich Brüning</a> instituted a series of highly unpopular welfare and public spending cuts in response to the economic crisis, aided at crucial moments by the SPD’s decision to “tolerate” such measures without being able to negotiate any significant concessions in return. In the two Reichstag elections of 1932, the SPD’s share of the vote crashed to 21.6% in July and 20.4% in November.</p>
<p>Even if we accept that the SPD had no alternative but to “tolerate” Brüning in the early 1930s, the situation today is very different. Germany is not facing an economic downturn, let alone a crisis on the scale of the Great Depression. A grand coalition would rest on a clear majority in the Bundestag, offering – in contrast to the late Weimar period – a realistic chance of the government lasting for a full four years. </p>
<p>Unlike Brüning, Merkel favours consensus. The SPD has a significant opportunity to obtain concessions on key issues affecting its members and supporters, including the environment, welfare and immigration. In the coming weeks, the SPD should grasp the nettle and aim for a formal coalition agreement, rather than “tolerating” a minority CDU-led government.</p><img src="https://counter.theconversation.com/content/88606/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Matthew Stibbe does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Martin Schulz has said he’d rather go back into opposition than agree to another grand coalition. But is that sensible?Matthew Stibbe, Professor of Modern European History, Sheffield Hallam UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/877782017-11-20T13:45:19Z2017-11-20T13:45:19ZGermany enters political no-man’s land as Angela Merkel wrestles with election fallout<figure><img src="https://images.theconversation.com/files/195435/original/file-20171120-18533-imjg66.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/german-bundestag-constitutional-legislative-building-berlin-661559881?src=cK6drqDK8yNLJzAQWmwLpg-4-35">immodium/Shutterstock</a></span></figcaption></figure><p>Angela Merkel is in trouble. Serious trouble. Negotiations to form the next German government have collapsed dramatically. Quite where the chancellor, and indeed Germany, go from here is anything but certain.</p>
<p>It wasn’t meant to be like this. Although the Christian Democrats (CDU) performed poorly in the federal <a href="https://theconversation.com/germanys-afd-how-to-understand-the-rise-of-the-right-wing-populists-84541">election of September 24</a> (gaining just 32.9% of the vote), the post-election expectations were nonetheless clear. Merkel would get representatives from the CDU’s sister party in Bavaria (CSU) and two smaller parties (the liberal FDP and the Greens) around a table and, over time and at their own pace, they would knuckle down and form Germany’s first “Jamaica Coalition” – so-named as the parties’ colours are the same as those on the Caribbean island’s flag.</p>
<p>Those expectations have now gone up in smoke. <a href="http://www.bbc.co.uk/news/world-europe-42047532">The FDP walked out</a>. Christian Lindner, the FDP’s leader, claimed that there simply wasn’t enough common ground for the parties to draw up a coalition agreement that everyone could sign up to. “Better not to govern at all than to govern badly,” as he dramatically put it. </p>
<h2>Tough choices</h2>
<p>Where to now? Essentially, German politicians have three options. </p>
<p>First, there is another plausible majority in the German parliament. Merkel’s Christian Democrats could look to govern with the centre-left Social Democrats (SPD). The parties have a majority in parliament and they have experience of working together. Indeed, they did that in the four year period from 2013-2017. </p>
<p>However, the SPD has made it (crystal) <a href="https://www.politico.eu/article/germany-coalition-martin-schulz-let-germany-vote-again-if-merkel-talks-fail/">clear</a> that it’s not up for that. The Social Democrats were humbled at the last election, polling 20.5%; a historic low. Governing alongside Merkel has done the party little political good and a period of internal rejuvenation is badly needed. As recently as <a href="https://www.theguardian.com/world/2017/nov/19/german-coalition-talks-close-to-collapse-angela-merkel">this weekend</a> Martin Schulz, the SPD leader, reemphasised that. </p>
<p>Given that, Merkel could try to govern without a majority in the Bundestag. Minority governments are not uncommon across mainland Europe, and the Nordic countries have often shown that these administrations can be successful. The government simply seeks majority support for each bill it presents to parliament; sometimes Merkel would look to persuade the Social Democrats to support her, on other occasions she’d look to one (or more) of the smaller parties. </p>
<p>Such an idea remains, however, anathema to many in Germany. The <a href="https://en.wikipedia.org/wiki/Weimar_Republic">Weimar Republic</a> existed over 70 years ago, but the weakness of successive minority administrations led ultimately to its collapse and to the ushering in of the far right and ultimately to World War II. Germany has not had a minority government since. The idea of a government existing on the basis of ever-shifting majorities in parliament therefore leaves many feeling deeply uneasy.</p>
<h2>Merkel’s future in doubt?</h2>
<p>The third option is for new elections. But this is not nearly as straightforward as outside observers might think. The chancellor can indeed engineer a lost confidence vote in parliament that would trigger new polls, but the federal parliament hasn’t formally elected Merkel chancellor yet. Until it does, that’s not an option for her. </p>
<p>The federal president, Frank-Walter Steinmeier, could decide that new elections are the cleanest way to solve the impasse. Even then, there are constitutional problems; German politicians would have to come together in parliament and a majority would (twice) have to fail to support Merkel. There would then have to be a third round of voting where (one assumes) Merkel’s CDU/CSU colleagues would support her whereas parliamentarians from other parties would not. </p>
<p>It’s at this point that the president would step in; he would either formally nominate Merkel as the head of a minority government or he’d decide that that government would be neither strong nor stable and call for a new election within 60 days. Either way, Steinmeier’s role in sorting this mess out is an important one.</p>
<p>The option of holding another election would appear to be the most logical (if constitutionally cumbersome) way of proceeding, but there is a further problem. It is not at all clear that any new election would deliver a result that was much different to that of September 24. Germany could effectively end up either in the same place again or, and this is something that many fear, the far-right Alternative For Germany (AfD) could be the main beneficiary. </p>
<p>Furthermore, Steinmeier has already sent subtle messages to the parties saying that they need to be statesmanlike, knuckle down and simply find a way to agree. It’s not implausible that he’ll simply tell them to turn around and get back to the negotiating table. </p>
<p>Germans are not getting the government they thought they were going to get, and it is not at all clear what should or will happen next. All three scenarios outlined above are unpalatable, but Germany clearly cannot stay in limbo indefinitely. The chances of new elections have undoubtedly increased, but they are not a forgone conclusion. </p>
<p>Could a CDU/CSU/Green minority government, supported implicitly by the SPD from the backbenches, be the way forward? Some 48 hours ago no one would have said yes. Now, it’s at least plausible if not probable. If a new election happens, will Merkel be leading the CDU in to it? Probably, yes, but by no means certainly. Germany has suddenly gone from a country of boring politics to one where politics has turned in to high drama.</p><img src="https://counter.theconversation.com/content/87778/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Dan Hough has received funding from the German Academic Exchange Service (DAAD)</span></em></p>German chancellor is running out of options to form a viable government.Daniel Hough, Professor of Politics, University of SussexLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/843872017-09-20T13:01:32Z2017-09-20T13:01:32ZThere are four options for forming a German government next week – here’s how they work<p>German voters are about to go to the polls to <a href="https://theconversation.com/uk/topics/german-election-2017-40386">elect a new government</a> – except, of course, they won’t. Germany’s proportional electoral system has ensured that only once in the history of the Bundesrepublik (1957) has a party won a majority in parliament. Current polls suggest the Christian Democrats and their Bavarian allies (<a href="https://www.cducsu.de/fraktion/two-parties-one-joint-parliamentary-group">CDU/CSU</a>), under the leadership of Angela Merkel, will emerge as the largest party but fall short of a majority. They will then have to enter coalition talks. German politicians, not voters, will choose the government.</p>
<p>That isn’t a blanket criticism of proportional representation (PR) and multi-party systems. Many countries using PR, such as Italy, Austria and the Scandinavian nations, have increasingly “bipolar” or two-bloc party systems. Loose alliances of parties on the left face rival alliances on the right, presenting voters with a clear ideological choice of governments. The resulting executive might be a coalition or a minority administration relying on supply-and-confidence support from other parties in its bloc. But crucially, voters can vote for a party knowing what government it will likely join or support and which it will oppose after an election.</p>
<p>Germany experienced a brief period of bipolar competition from the 1990s, when a centre-left alliance of the Social Democrats (SPD) and Greens faced the centre-right CDU/CSU and their liberal allies, the FDP. But this system was disrupted by the electoral rise of the Left Party, a merger of the rebranded former East German communists (PDS) and another radical-left party in 2007. They had previously fought the 2005 election as an electoral alliance, winning 54 of the 614 Bundestag seats. </p>
<p>Neither a CDU/CSU-FDP coalition nor an SPD-Green coalition could command a majority. A “red-red-green” coalition of the SPD, PDS and the Greens would have enjoyed a majority but the PDS was deemed beyond the pale by the major parties because of its communist-era links. That remains the case with the successor Left Party to this day. With the rise of the radical right, anti-immigration Alternative for Germany (<a href="https://www.ft.com/content/1e3facea-9d48-11e7-8cd4-932067fbf946">AfD</a>), Germany’s six-party system contains two parties (currently polling a combined 20% of the vote) that are excluded by the others, complicating coalition formation.</p>
<p>The rise of the Left Party and AfD leaves four options for the mainstream parties in 2017:</p>
<h2>1. A two-bloc system</h2>
<p>First, they could include the outsiders in a new two-bloc party system, as happens elsewhere. The radical right <a href="https://www.theatlantic.com/international/archive/2017/09/norway-progress-party-populism-immigration/539535/">Progress Party</a> in Norway and Freedom Party in Austria have both participated in governments, while the <a href="http://www.politico.eu/article/meet-denmarks-new-anti-islam-anti-immigration-anti-tax-party-nye-borgerlige-new-right-pernille-vermund/">Danish People’s Party</a> provides supply-and-confidence support to centre-right coalitions. </p>
<p>While it is difficult to see AfD being included in this way, the Left Party could be considered, as the communist era recedes into the past. It has participated in a regional coalition with the SPD and Greens in Thuringia since 2014. A red-red-green coalition would retain the left bloc’s ideological coherence and signal to voters the government’s composition if the left won a majority.</p>
<h2>2. Ignore the outsiders</h2>
<p>Second, AfD and the Left Party could continue to be shunned by the mainstream parties. In Sweden, after the 2014 elections, the four-party centre-right alliance could have enjoyed a parliamentary majority had it allied with the anti-immigration Sweden Democrats (SD), but it refused to do so.</p>
<p>Instead, a minority Social Democrat-Green coalition came to power, with the centre-right parties later agreeing to pass its budgets to forestall early elections that could boost SD. Yet these parties declined to govern alongside the centre-left, retaining their status as the principal alternative government and seeking to erode SD’s electoral support.</p>
<h2>3. Informal alliance</h2>
<p>Third, the mainstream German parties could engage in more promiscuous coalition-making, with inter-bloc alliances involving the smaller parties. The so-called “Jamaica coalition” (from the colours of the Jamaican flag – black-yellow-green) would see the centre-right CDU/CSU (black) and the FDP (yellow) ally with the centre-left Greens. Similarly, the “traffic-light coalition”, would see the centre-left SPD (red) and Greens join with the FDP. Neither has been attempted at the federal level but they have long been mooted.</p>
<h2>4.Grand coalition (again)</h2>
<p>The fourth option is an SPD-CDU/CSU grand coalition. This kind of inter-bloc arrangement has governed Germany for eight of the past 12 years.</p>
<p>The problem with inter-bloc coalitions is that they are elite creations. While some voters might be satisfied, it’s easy to imagine left-leaning voters being dismayed at the Greens propping up a CDU/CSU-FDP government. Similarly, free-market liberals might not like the FDP keeping the SPD and Greens in office. Unless these coalitions were signalled as the preferred outcome by party leaders before the election, voters could rightly complain of a stitch-up.</p>
<p>That particularly holds true for grand coalitions. They have their place in societies divided by ethnicity, language or religion, like <a href="https://theconversation.com/uk/topics/northern-ireland-1670">Northern Ireland</a>, where power-sharing is necessary for democracy to survive. They can also be desirable in crisis situations: Britain had grand coalitions during both world wars.</p>
<p>Outside of emergencies, however, mature democracies should avoid grand coalitions. They deprive voters of governing choices, as the major rivals are in office together. They weaken accountability, as it is hard for voters to “throw the rascals out”.</p>
<p>They also undermine strong opposition, a key feature of democracy. An effective opposition party holds the government to account and offers itself as an alternative government-in-waiting. With a grand coalition, small parties are left to provide opposition but none will be viewed as credible governments-in-waiting. It is harder for voter dissent to resonate within parliament when the government controls 80% of seats, as in Germany since 2013. Entrenching an elite consensus invigorates populist outsiders, as the rise of AfD shows.</p>
<p>The biggest dilemma is the SPD’s, whose preference for grand coalitions has been disastrous. Left-wing voters opposed to Merkel have opted for the Greens and the Left Party, with the SPD now polling at just 22%. Another grand coalition could inflict long-term damage on the party as its supporters wonder what its purpose is.</p>
<h2>Or … a minority government?</h2>
<p>One of the oddities of post-war German politics is the dearth of minority governments. But after this week’s election, the SPD might consider allowing the CDU/CSU to form a minority administration as an alternative to another grand coalition. Germany’s chancellor must win a majority of all legislators in the Bundestag and the SPD could vote for Merkel to enable a government to be formed, but without joining her in office. By returning to opposition, the SPD would then have the chance to renew itself. And for voters, the possibility of minority executives could reestablish a two-bloc system that puts governmental choice in their hands.</p><img src="https://counter.theconversation.com/content/84387/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tom Quinn does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Angela Merkel is on course for victory but she will need to form a coalition, and there’s more than one way to make that happen.Tom Quinn, Senior Lecturer, Department of Government, University of EssexLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/839402017-09-15T14:18:16Z2017-09-15T14:18:16ZMerkel and Schulz must face up to Germany’s blind spot on corporate corruption<figure><img src="https://images.theconversation.com/files/186179/original/file-20170915-8121-1eyqrmk.jpg?ixlib=rb-1.1.0&rect=577%2C10%2C2683%2C1775&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/map-germany-through-magnifying-glass-404320606?src=iOMoXbD3TGPOEdZx2to-XQ-1-41">Naruedom Yaempongsa/Shutterstock</a></span></figcaption></figure><p>Angela Merkel appears <a href="http://www.telegraph.co.uk/news/0/german-election-polls-odds-tracker-merkel-seeks-fourth-term1/">odds-on</a> to return to power as Germans go to the polls on September 24, either in coalition with the liberal Free Democrats (FDP) or in a “grand coalition” with the Social Democrats (SPD). The SPD remains the largest challenger to Merkel’s dominance, but it is struggling to lay a glove on a respected opponent. </p>
<p>The one and only <a href="https://www.theguardian.com/world/2017/sep/14/angela-merkel-rejects-martin-schulz-plea-second-tv-election-debate-germany">leaders’ debate</a> pitched Merkel against the SPD’s, Martin Schulz. On much domestic policy there was little to choose between them. Merkel and Schulz were, for example, at pains to suggest that the German car industry needed to do better in the face of the <em>Abgasskandal</em>, as the diesel emissions scandal is known. Quite how far they are going to go to make sure that happens is much less clear.</p>
<p>Yet Germany has a much broader corruption problem. It is, however, largely unaware of it. That might sound odd. But for many Germans, corruption is something that happens elsewhere. You don’t bribe traffic police in Germany and you stringently follow the rules when filling in your tax returns. The majority of Germans never get anywhere near experiencing corruption directly.</p>
<p>That experience is largely borne out in Germany’s performance in international corruption indices. For what they are worth (and some don’t think that they are <a href="https://www.washingtonpost.com/news/monkey-cage/wp/2016/01/27/how-do-you-measure-corruption-transparency-international-does-its-best-and-thats-useful/">worth that much</a>), Germany came joint 10th (out of 176) in Transparency International’s most recent <a href="https://www.transparency.org/research/cpi/">Corruption Perceptions Index</a> and just outside the top 10 in the World Bank’s <a href="http://info.worldbank.org/governance/wgi/index.aspx">World Governance Indicators</a>. The Nordic countries (and New Zealand) might top these tables, but Germany is rarely too far behind.</p>
<h2>Corporate misbehaviour</h2>
<p>Yet one thing that the <em>Abgasskandal</em> has further highlighted is that the behaviour of corporate Germany doesn’t always live up to expectations. The antics of diesel car makers are hardly the first example of German firms bending the rules to breaking point.</p>
<p>The cases of <a href="http://www.theguardian.com/sustainable-business/siemens-solmssen-bribery-corruption">Siemens</a> and <a href="http://www.nytimes.com/2007/02/15/business/worldbusiness/15scandal.html?pagewanted=2&_r=2&ref=fraudsandswindling&">Daimler</a> illustrate that the there have been occasions over the last decade when companies acted in a fashion that belies the excellent reputation of German business. </p>
<p>Industrial group Siemens <a href="http://www.spiegel.de/international/business/new-dimensions-of-corruption-siemens-admits-dubious-payments-of-1-3-billion-a-516127.html">has admitted</a> using a wide-ranging system of bribes to help it achieve its business goals, leading to a <a href="http://www.nytimes.com/2008/12/16/business/worldbusiness/16siemens.html?mcubz=0">US$1.3 billion</a> legal settlement in the US in 2008 and total costs to the company of <a href="https://www.theguardian.com/business/2008/dec/16/regulation-siemens-scandal-bribery">€2.5 billion</a>.</p>
<p>Car company Daimler, meanwhile, paid US$185m <a href="https://www.daimler.com/documents/investors/nachrichten/kapitalmarktmeldungen/daimler-ir-release-en-20100401.pdf">to settle charges</a> that it violated the American Foreign Corrupt Practices Act when trying to win government contracts <a href="https://www.theguardian.com/business/2010/mar/24/daimler-settles-us-bribery-charges">in 22 countries between 1998 and 2008</a>. These aren’t isolated examples.</p>
<h2>Turning the corner?</h2>
<p>German authorities, to their credit, have responded to this and there has been a move to prosecute more miscreants. Many German multinationals have subsequently given serious thought (and resources) to their compliance programmes. Siemens, for example, rolled out an expansive internal <a href="Siemens%20launched%20a%20comprehensive%20training%20and%20education%20programme%20on%20anti-corruption%20practises%20for%20its%20employees">training and education programme</a> and now has a compliance programme that is industry-leading. </p>
<p>That’s all to be commended. These developments have nonetheless still not stopped German companies from transgressing. If compliance programmes were working properly across the board <a href="http://www.euractiv.com/sections/justice-home-affairs/ngo-german-firms-mired-worst-greek-corruption-scandals-wwii-317194">then Rheinmetall</a> wouldn’t have paid €37m <a href="http://uk.reuters.com/article/rheinmetall-greece/rheinmetall-unit-fined-37-mln-euros-in-greek-bribery-probe-idUKFWN0TT04M20141210">to settle</a> a criminal investigation in to bribery whilst selling its anti-aircraft defence system. <a href="http://www.bbc.co.uk/news/business-34324772">Volkswagen</a> wouldn’t have been called out for massaging the emissions figures for the diesel cars that it sold in the US and elsewhere.</p>
<p>The problem for Merkel and Schulz is twofold. Firstly German exporters have been actively encouraged to invest in developing markets. And they have done that very impressively. Some <a href="https://www.destatis.de/EN/FactsFigures/NationalEconomyEnvironment/ForeignTrade/TradingPartners/Current.html">€71 billion of German products</a> went to China alone in 2015. The high-cost, high-quality exports that <a href="https://theconversation.com/the-secret-behind-germanys-thriving-mittelstand-businesses-is-all-in-the-mindset-25452">the small and medium-sized businesses in Germany’s famed Mittelstand</a> have produced are the backbone of the German economy.</p>
<p>Corruption is often a serious problem <a href="http://www.telegraph.co.uk/business/2016/10/26/bribery-a-way-of-life-for-companies-operating-in-emerging-market/">in these emerging markets</a>. Larger German firms have now generally adopted compliance programmes that look to deal with the risks of doing business in such environments. Smaller Mittelstand companies, however, have not experienced the compliance shock that larger companies frequently have. Many of them, as a result, have poorly developed compliance programmes or no programmes at all. As the <a href="http://ec.europa.eu/dgs/home-affairs/what-we-do/policies/organized-crime-and-human-trafficking/corruption/anti-corruption-report/docs/2014_acr_germany_chapter_en.pdf">European Commission</a> noted in 2014:</p>
<blockquote>
<p>When it comes to small and medium sized enterprises, corporate governance programmes and compliance structures are not yet widespread.</p>
</blockquote>
<p>Big German companies have caught the eye for their misdemeanours, but it is the real engine of the German economy – the Mittelstand – that is arguably playing catch up the most.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/185854/original/file-20170913-23134-1pjjg04.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/185854/original/file-20170913-23134-1pjjg04.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/185854/original/file-20170913-23134-1pjjg04.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=423&fit=crop&dpr=1 600w, https://images.theconversation.com/files/185854/original/file-20170913-23134-1pjjg04.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=423&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/185854/original/file-20170913-23134-1pjjg04.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=423&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/185854/original/file-20170913-23134-1pjjg04.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=532&fit=crop&dpr=1 754w, https://images.theconversation.com/files/185854/original/file-20170913-23134-1pjjg04.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=532&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/185854/original/file-20170913-23134-1pjjg04.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=532&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">More scrutiny needed.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/staged-photo-german-police-car-highway-569213167?src=9Fn5bXJHEHa0w9TFSmGPCw-1-26">Rostislav Král</a></span>
</figcaption>
</figure>
<h2>Poachers and Game-Keepers</h2>
<p>The second issue is that German politicians are not neutral arbiters in all of this. In the case of VW, politicians from the state of Lower Saxony, which owns part of the company, <a href="http://www.reuters.com/article/us-volkswagen-emissions-germany-politics/vw-scandal-exposes-cozy-ties-between-industry-and-berlin-idUSKCN0RQ0BU20150926">sit on the board</a>. Politicians in that position have a clear interest in VW doing well just as they have an obligation to check that it doesn’t do so at the expense of others. This isn’t constructive ambiguity. This is a real risk of conflict of interest.</p>
<p>The challenge for the government which emerges from the German election is threefold. Firstly, acknowledge that German business has an anti-corruption problem. Secondly, whoever leads the next government needs to show that they take this problem seriously; bringing in a German version of the American <a href="https://www.justice.gov/criminal-fraud/foreign-corrupt-practices-act">Foreign Corrupt Practices Act</a> or the UK’s <a href="http://www.legislation.gov.uk/ukpga/2010/23/contents">Bribery Act</a> would be a good move in this direction. </p>
<p>Thirdly, there were once good reasons for politicians to sit on both sides of the corporate fence. They no longer hold water. Cozy relationships between business and politicians are, in times of increased suspicion, not good for either side. That is a significant agenda for change. And we are about to see if Merkel or Schulz will have the stomach for it.</p><img src="https://counter.theconversation.com/content/83940/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Dan Hough has received funding from the German Academic Exchange Service (DAAD) to enable him to conduct research on Germany's anti-corruption challenges.</span></em></p>Politicians need to get serious about the steady drip of scandals.Daniel Hough, Professor of Politics, University of SussexLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/822272017-08-10T11:14:24Z2017-08-10T11:14:24ZWhat the prediction markets tell us about the German election<p>Germany will go to the polls on September 24 to elect its next parliament – a vote which will determine whether Angela Merkel will hold onto her post as chancellor.</p>
<p>The election isn’t causing quite the same anxiety as unfolded in France ahead of the presidential contest there earlier this year, but it is nevertheless very significant. Merkel has led Germany for more than a decade. During that time she has come to occupy a central position among European leaders. </p>
<p>If she is replaced, it will shape the EU’s refugee policy, the ongoing Southern European debt crisis and possibly Brexit negotiations. And that’s just for starters. </p>
<p>Since voters do not directly elect the German leader, but only determine party shares, polls are not the best source to predict the next chancellor. Polls give us a good idea about which party will make it into parliament (parties have to secure at least 5% of the vote share to make it in at all) and which coalitions are possible, but they do not directly tell us which coalition will govern and who will be head of the government.</p>
<p>This is where <a href="http://www.nature.com/news/the-power-of-prediction-markets-1.20820">prediction markets</a> can be useful – both to predict the election outcome or to make money betting on it. A prediction market is a small, simple financial market where traders can buy and sell assets whose payoffs after the election depend on the election outcome. </p>
<p>So, for example, an asset might pay US$1 if Merkel remains as chancellor but nothing if she does not. This is the “Merkel asset”. There are other assets, most notably for main challenger Martin Schulz. The “Schulz asset” will pay US$1 if Schulz becomes the next chancellor, and nothing if he does not.</p>
<p>Similarly, there are assets for all other serious contenders plus an asset for the “all others” category. Buying an asset is similar to betting on the candidate – you make money if that candidate wins.</p>
<h2>Who would you bet on?</h2>
<p>Suppose you think that Merkel will remain chancellor, say with a subjective probability of 80%. If you are risk neutral, then you should buy the Merkel asset as long as its price does not exceed US$0.8. Why? Because in this case you expect a payment of US$1 with probability 80% (Merkel wins), and a payment of US$0 with probability 20% from holding the asset. Thus, any price exceeding 0.8 x US$1 + 0.2 x US$0 = $0.8 means you expect a net loss. (This calculation ignores possible transaction costs which depend on the platform.)</p>
<p>If many traders think an asset is underpriced, so that the winning probability is higher than the price, then they all buy and drive up the price. Prices therefore adjust, forming a market consensus forecast. And indeed, researchers have shown that this sort of market-based wisdom of the crowd has outperformed polls in forecasting <a href="https://doi.org/10.1016/j.ijforecast.2008.03.007">US elections</a>.</p>
<p>But how exactly can we turn prediction market prices into election forecasts? My colleague and I have <a href="http://dx.doi.org/10.1016/j.geb.2015.11.002">shown</a> that if a prediction market price is, say, US$0.7, then the underlying outcome indeed happens in 70% of the cases; if the price is US$0.8, then the outcome happens in 80% of the cases, and so on. Thus, the prices match the underlying probabilities, which we can use to forecast. <a href="http://dx.doi.org/10.1111/j.1468-0297.2012.02561.x">Other studies</a> confirmed that prediction market prices are “well calibrated” in this sense.</p>
<p>This finding does not mean that the favourite (the asset with the highest price) is guaranteed to win the election. It just means the favourite is most likely to win, and prediction markets exactly quantify the winning probabilities.</p>
<h2>Who will be the next chancellor?</h2>
<p>The price of the Merkel asset is currently <a href="https://www.predictit.org/Contract/3613/Will-Angela-Merkel-be-elected-German-chancellor-in-2017#data">US$0.90</a>, indicating a 90% chance, so the markets predict that Merkel will very likely start her fourth term as German chancellor in September. Indeed, the price chart over time reveals that this forecast has not changed much in the past two months.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/181412/original/file-20170808-22938-2au4el.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/181412/original/file-20170808-22938-2au4el.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/181412/original/file-20170808-22938-2au4el.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=222&fit=crop&dpr=1 600w, https://images.theconversation.com/files/181412/original/file-20170808-22938-2au4el.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=222&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/181412/original/file-20170808-22938-2au4el.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=222&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/181412/original/file-20170808-22938-2au4el.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=280&fit=crop&dpr=1 754w, https://images.theconversation.com/files/181412/original/file-20170808-22938-2au4el.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=280&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/181412/original/file-20170808-22938-2au4el.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=280&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Merkel remains a solid investment.</span>
<span class="attribution"><span class="source">Predict It</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>Early in May, traders were a bit more sceptical, pricing Merkel’s chances at around 70%. Mind you, that’s still a prospect most politicians dream of. Since then her chances improved even further.</p>
<p>Far behind, Schulz is currently priced at <a href="https://www.predictit.org/Contract/3616/Will-Martin-Schulz-be-elected-German-chancellor-in-2017#data">US$0.09</a>, indicating a 9% chance at becoming the next chancellor. No other politician receives more than a 1% chance. Given these numbers, anything but a Merkel victory in September would be a huge surprise.</p><img src="https://counter.theconversation.com/content/82227/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Christoph Siemroth received funding from the German Research Foundation (SFB 884). </span></em></p>Follow the money to see if Angela Merkel is on course for a fourth term as chancellor after the September vote.Christoph Siemroth, Lecturer in Economics, University of EssexLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/776922017-05-14T22:15:20Z2017-05-14T22:15:20ZMerkel’s way looks clear after German regional elections derail her main rival<figure><img src="https://images.theconversation.com/files/169227/original/file-20170514-3689-6q7wg5.jpg?ixlib=rb-1.1.0&rect=326%2C201%2C3558%2C2364&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/november-13-2015-berlin-german-chancellor-352399133?src=eMYlGW-N7F64Qnlby-mrUw-1-26">360b/Shutterstock</a></span></figcaption></figure><p>Angela Merkel’s Christian Democratic Union has won a <a href="http://www.bbc.co.uk/news/world-europe-39914333">resounding victory</a> in a regional election in Germany’s most populous state, North-Rhine Westphalia (NRW). The CDU is now in pole position to be the largest party when Germany next goes to the polls in September. But Merkel won’t be taking anything for granted just yet.</p>
<p>The impressive speed with which <a href="https://www.theguardian.com/world/2017/mar/24/martin-schulz-boost-to-germanys-spd-raises-stakes-for-angela-merkel">Martin Schulz’s Social Democrats (SPD)</a> caught up with the CDU over the winter – a ten point lead in national opinion polls was whittled down to effectively nothing – had given hope to social democrats Europe-wide. </p>
<p>Schulz is a pro-European federalist with impeccable centre-left credentials; the very antithesis to the type of outsider candidate that has appeared in many other parts of the democratic world. He appeared to be <a href="http://www.economist.com/blogs/kaffeeklatsch/2017/04/whither-schulzzug">on the cusp</a> of taking German politics by storm.</p>
<p>If, however, Schulz is to lead the SPD to power in September then he needs to translate these hopes and expectations into votes. When the SPD failed to do that in a regional election <a href="http://www.politico.eu/article/3-takeaways-from-election-in-germanys-saarland-angela-merkel-cdu/">in the Saarland</a> on March 26 it could be explained away by looking at the local context. The CDU candidate was popular <a href="http://en.die-linke.de/die-linke/welcome/">and the Left Party</a> had a strong base, squeezing the SPD vote share. </p>
<p>A second poor performance in <a href="https://iasgp.wordpress.com/2017/05/07/the-end-of-the-schulz-surge/">Schleswig-Holstein</a> on May 7 was tougher to explain, however. This weekend’s loss of seven percentage points on the previous performance in 2012 in North-Rhine Westphalia is, however, nothing short of calamitous.</p>
<h2>Heartlands</h2>
<p>The SPD challengers to Merkel would have hoped to do well in NRW. It’s their traditional heartland, much as the north of England is to the Labour Party in the UK. It’s also Schulz’s home state. Armin Laschet, the victorious CDU candidate, didn’t have any particular popular resonance and <a href="https://www.youtube.com/channel/UCaYY9DlXBP3CTHhZzjPj5cw/featured">Hannelore Kraft</a> (the incumbent “minister president” and SPD leader in the state) was not so long ago being touted as a possible chancellor herself. The SPD hoped to to use this election as a springboard to bigger and better things; instead it’s now looking at a historically bad performance of 31%. NRW, in other words, presents just the type of regional election where a budding chancellor-party would hope to be filling its boots; instead, this was nothing short of a catastrophe.</p>
<p>Philipp Wittrock from Der Spiegel magazine may be taking the polemics a little too far <a href="http://www.spiegel.de/politik/deutschland/nrw-wahl-war-s-das-schon-fuer-martin-schulz-a-1147618.html">by claiming</a> that “victory in September seems as distant for the Social Democrats as does democracy for the North Koreans”, but it is nonetheless clear that Merkel is now odds-on to claim her fourth election victory.</p>
<p>That said, there are certainly NRW-specific phenomena that won’t be evident when all Germans vote on September 24. The Free Democratic Party (FDP), for example, will not do nearly as well in the national election as it did in North-Rhine Westphalia (the home state of its leader, Christian Lindner), but that’s unlikely to benefit the SPD; if German liberals don’t vote FDP then generally they are <a href="http://www.dw.com/en/the-fdp-the-lazarus-of-german-politics/a-37042044">more at home</a> voting CDU. The SPD-Green government in NRW was also widely criticised for failing in important areas such as transport and education and it is no coincidence that both parties did badly.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/169229/original/file-20170514-3675-nte2nt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/169229/original/file-20170514-3675-nte2nt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/169229/original/file-20170514-3675-nte2nt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/169229/original/file-20170514-3675-nte2nt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/169229/original/file-20170514-3675-nte2nt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/169229/original/file-20170514-3675-nte2nt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=504&fit=crop&dpr=1 754w, https://images.theconversation.com/files/169229/original/file-20170514-3675-nte2nt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=504&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/169229/original/file-20170514-3675-nte2nt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=504&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">NRW capital Düsseldorf sends a signal for September elections.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/125343440@N08/29365803936/in/photolist-HcYrM6-Hj2G7R-mGe8Kg-oKd9Us-qPmkjW-osKnjz-p1L8dJ-Curwec-mGfTqw-mGdT9V-mGfMaW-aEFTbk-LJXqqq-mGebUT-osKCHb-p3cB5r-5MhXH-osKW4v-oHdrbw-pidkWL-2JXc5-2JXbP-adeqkF-6JvSV-2NWPq-yZbcoB-zW47BZ-HbFQub-yb7RR4-xh2Nvb-HbG2Hd-xrBvcK-yrGjgq-yb7Q96-xionUi-x1cNWo-xh2R3q-GmoErD-ysEnL2-yb9vYK-Hg5qBL-yto62n">Jennifer Stahn/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span>
</figcaption>
</figure>
<h2>Routes closed</h2>
<p>The bigger point moving forward is that Merkel’s CDU appears to be regaining its footing after a tough year. The chancellor will do all she can to stop complacency setting in, while hoping that events don’t throw her off course. Merkel’s strategists won’t be thinking so much of possible Brexit palpitations or another terrorist strike; the bigger worry is a rise in relevance of the refugee issue. </p>
<p>The fact that the EU-Turkey agreement on closing the <a href="http://frontex.europa.eu/trends-and-routes/western-balkan-route/">so-called Balkan route</a> to Europe for potential asylum-seekers continues to hold is significant in this regard. There are <a href="http://foreignpolicy.com/2017/03/14/did-turkey-just-kill-the-refugee-deal-with-europe/">people in Turkey</a> who are well aware that if they want to get further concessions from the EU then doing so in the run up to the September vote might be the best time to do it.</p>
<p>It is clear that the SPD has much the bigger challenge. An SPD-Green coalition is mathematically very unlikely, and the idea of a red-red-green (RRG) government (SPD, Greens and the Left Party) is by no means universally popular within the SPD itself, even though it is the only viable governing option that would lead to Schulz becoming chancellor. A significant minority of SPD supporters actually regard RRG as the worst of all options whilst the overwhelming majority of voters on the centre-right are <a href="http://www.spiegel.de/politik/deutschland/martin-schulz-und-die-angst-vor-rot-rot-gruen-umfrage-a-1146123.html">put off by the idea</a>. The wider electorate will be just as reluctant and the SPD will be hard pushed to square that circle.</p>
<p>With Merkel often appearing to be nothing short of leader of the free world, the SPD can’t fall back on the fact that a number of its signature policies are not just popular, but have also found their way into government policy. Schulz was the fresh-faced outsider who could unsettle the CDU. He was the candidate the Christian Democrats really didn’t want to have to face. No longer. Unless something drastic happens, Schulz may well go down as the great hope that failed before he’d even really had a chance to succeed.</p><img src="https://counter.theconversation.com/content/77692/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Daniel Hough does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The chancellor looks ever more secure as a surge by the SPD falls flat in North-Rhine Westphalia.Daniel Hough, Professor of Politics, University of SussexLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/725242017-02-23T04:03:40Z2017-02-23T04:03:40Z2017 could be a turning point for European integration – but not in the way you think<p>There can be little doubt that this year’s elections in Germany and France may determine the future of the European Union. </p>
<p>For nearly a decade now, the EU has been facing unprecedented challenges, from the <a href="https://www.theguardian.com/business/2016/aug/22/seven-changes-needed-to-save-the-euro-and-the-eu">euro crisis</a> and the <a href="https://theconversation.com/syrian-refugees-in-turkey-jordan-and-lebanon-face-an-uncertain-2017-70747">influx of migrants</a> to Brexit and the rise of nationalism. On their own, any one of these crises could threaten the cohesion of the union; together they represent an existential threat. </p>
<p>But the tide could yet turn. Depending on the outcomes of the French and German elections, 2017 could actually be the start a more integrated and unified Europe.</p>
<h2>The rise of Emmanuel Macron</h2>
<p>France is facing one of its most fascinating election in recent history. Former prime minister François Fillon, a traditional conservative, looked likely to win power. But an embarrassing <a href="http://www.politico.eu/article/fillons-troubles-deepen-as-penelopegate-probe-continues/">corruption scandal</a> involving the employment of his wife Penelope has significantly dented his chances. </p>
<p>The Socialist candidate, Benoît Hamon, is highly unlikely to make it far. Having won the socialist primary on a very left-wing platform, it will be difficult for him to reach beyond his core group of supporters. </p>
<p><a href="http://www.politico.eu/article/marine-le-pen-advances-in-poll-as-riots-heighten-security-fears-national-front/">Leading the polls</a> is Marine Le Pen, the leader of the far-right Front National, who is running on a populist, eurosceptic, anti-immigrant platform. Le Pen is projected to win the first round of voting on April 23, but she is most likely to be knocked out in the second round, where 50% of voters are required to win.</p>
<p>The man who defeats Le Pen in the May 7 second round may not come from either of France’s main parties. Emmanuel Macron is now one of the favourites to win the elections.</p>
<p>Macron’s political success has come incredibly fast. An unknown three years ago, he is now on track of possibly becoming the youngest president of the Fifth Republic, at age 39. </p>
<p>As a minister, Macron was vocally pro-business, in conflict with the classical tenets of the French left: he <a href="http://www.economiematin.fr/news-emmanuel-macron-uber-pas-interdit-paris-delville">defended Uber</a>, the <a href="https://www.service-public.fr/professionnels-entreprises/actualites/A10025">opening of shops on Sunday</a> and the reduction of the costs to terminate labour contracts. He became very popular with the French public while finding himself at loggerheads with many figures of the ruling Socialist party. </p>
<p>In August 2016 he <a href="http://www.lemonde.fr/politique/live/2016/08/30/en-direct-emmanuel-macron-va-quitter-le-gouvernement_4989938_823448.html">quit the government</a> and launched a presidential bid as an independent. Half a year later, he has transformed his initial political start-up into a political movement, <em>En Marche</em> (Forward), with <a href="http://www.euronews.com/2017/02/04/french-presidential-rock-star-emmanuel-macron-wows-crowds">political rallies</a> that attract thousands. </p>
<p>His strength comes from the match between his discourse and French voters’ desire for change. His left-liberal political position would not be unusual in many Northern European countries, but in France it is a novelty. Nearly 30 years after the fall of the Berlin Wall, the French left has not adapted to economic modernity. Facing the competition of a strong Communist Party in postwar France, the Socialist Party maintained a traditionally anti-capitalist position. This ideological position has often been disconnected from social-liberal policies adopted once in government. </p>
<p>By seizing on these contradictions and crossing the left-right divide, Macron has thrived. His novel political platform is <a href="http://vision-macron.fr/">characterised</a> by an economic liberalism blended with concern for social justice and political and cultural liberalism. </p>
<p>Young, charismatic and intellectual, Macron has attracted people from both the left and the right, and drawn a lot of newcomers to politics. At the same time, political space has opened for him. Both Fillon and Hamon are hard-line candidates, leaving an spot in the centre for Macron. </p>
<p>A Macron victory would have important consequences for the EU. Unlike most French politicians, who are either shy integrationists or vocal eurosceptics, he is <a href="http://www.euractiv.com/section/elections/news/in-london-macron-vows-to-stand-up-for-eu/">strongly pro-EU</a>; his supporters <a href="http://www.euronews.com/2017/02/04/france-emmanuel-macron-ramps-up-his-presidential-bid-in-lyon">cheer for Europe</a> in political meetings. </p>
<p>In January, he wrote in the Financial Times that it was time for <a href="https://www.ft.com/content/3d0cc856-e187-11e6-9645-c9357a75844a">Europeans to become sovereign</a>. This stance could end French opposition to deeper political integration.</p>
<p>The election of Marine Le Pen would lead to the unravelling of the EU, but if France chooses Macron, the union will get a significant boost from one of its core members.</p>
<h2>Germany: a new hope for the SPD</h2>
<p>The other key country in holding the EU together is of course Germany, which goes to the polls on September 24. Angela Merkel, of the Christian Democratic Union, is running for her fourth term as chancellor.</p>
<p>Hoping to dislodge Merkel from the Bundestag is Martin Schulz of the Social Democratic Party (SPD). In January, the none-too-popular Sigmar Gabriel <a href="http://www.politico.eu/article/sigmar-gabriel-wont-challenge-angela-merkel-for-chancellorship-media/">made way for Schulz</a> to become the part’s lead candidate. </p>
<p>Schulz is a rarity in European politics, having made his career in the EU before vying for a top national position. A member of the European Parliament since 1994, Schulz was its president from 2012 to January 2017.</p>
<p>There, he helped stage a political coup that dramatically shifted the balance of EU institutions, transferring power from the Head of States (Council) to the Parliament, and through it to European voters. </p>
<p>In 2010, the Party of European Socialists decided to <a href="https://euobserver.com/political/122004">name a leading candidate</a> to become the president of the European Commission in case of victory at the 2014 European elections, and chose Schulz. But the European elections in May 2014 <a href="http://www.europarl.europa.eu/elections2014-results/en/election-results-2014.html">did not deliver a clear majority</a>. </p>
<p>Schulz could have tried to form a majority on the left, but he instead <a href="http://www.dw.com/en/eu-rival-schulz-issues-support-for-juncker-presidency/a-17680689">supported a cross-bench motion</a> from the European Parliament stating that conservative candidate Jean-Claude Juncker was the winner of the election and that he had to be nominated. </p>
<p>Schulz understood the political game he was facing. The Council wanted to keep nominating the president, and the lack of a clear majority gave it the opportunity to propose another candidate. Schulz’s decision to withdraw gave the Parliament the upper hand instead. </p>
<p>At the time, Merkel <a href="http://www.spiegel.de/international/germany/power-struggle-europts-between-european-parliament-and-eu-leaders-a-972870.html">seemed to indicate</a> that she would not support Juncker. She faced a storm of criticism in the German media and was accused of betraying the democratic promise of the election. Soon after, she caved and <a href="http://www.economist.com/blogs/charlemagne/2014/06/battle-european-commission">endorsed Juncker</a>. </p>
<p>Martin Schulz’s key role in this manoeuvre indicates that as chancellor he would probably leverage Germany’s power to further EU integration. It would mark a substantial change compared to Merkel, whose approach has been <a href="http://www.economist.com/news/special-report/21579144-germanys-vision-europe-all-about-making-continent-more-competitive-merkel">to take as few steps as necessary</a> and to protect German finances before all. </p>
<h2>Deeper integration</h2>
<p>Could Macron or Schulz have an impact on European integration? Most likely.</p>
<p>Many factors in the current context are pushing in that direction. Politically, the lack of accountability and transparency of decisions at the European level is feeding a rise of nationalism; that threatens many European governments. </p>
<p>Geopolitically, we are witnessing both a <a href="http://www.economist.com/news/leaders/21709028-how-contain-vladimir-putins-deadly-dysfunctional-empire-threat-russia">resurgence of Russian military threat</a> and a withdrawal and unpredictability of the <a href="http://time.com/4676329/donald-trump-munich-security-conference-nato-europe/">US ally under Trump</a>. Economically, crises are clearly calling for better coordination.</p>
<p>But the hurdles to further integration are lower than we think. Brexit will remove from the EU the country <a href="http://blogs.lse.ac.uk/brexit/2016/04/28/britians-departure-from-ever-closer-union-is-of-great-significance/">most opposed to closer political union</a>. Among the remaining countries, Europeans are often said to be against further integration. But this statement confuses a criticism of current institutions with a criticism of integration. </p>
<p>Eurobameter studies show year after year that <a href="http://www.politico.eu/article/europe-union-brexit-eurobarometer/">EU citizens support more integration</a> in matters where nations cannot be the solution, such as defence. They also support more democracy at the European level, such as the election of the president of the European Commission.</p>
<p>A deeper political union may actually be closer than it seems. Without any treaty change required, the European Commission presidential nomination process has the potential to radically change the nature of European politics by creating a pan-European debate about European policies. </p>
<p>The only thing needed for a leap towards further political integration is for the French and German heads of state to support it. This year may just deliver that.</p><img src="https://counter.theconversation.com/content/72524/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Lionel Page does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The only thing needed for Europe to leap towards further political integration is for French and German heads of state to support it.Lionel Page, Professor in Economics, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.