Monday 30 September 2013

Austrian Elections: The Grand Coalition lives on

As the results of the Austrian elections came in yesterday, it was clear that the Social Democrat-led Grand Coalition will live on, if a little battered. The result will come as a relief to the Party of European Socialists, and Werner Faymann who can look forward to continue to lead the Austrian government after having failed to unseat Merkel last week.

Grand Coalitions are practically an Austrian tradition, with the majority of governments consisting of the centre-left SPOe and centre-right OeVP carving up power and ministerial posts between them. (This was a reaction to the turbulent politics of the Inter-War period, when Austria was very ideologically divided). So a Grand Coalition is not really a surprising result.

More notably, the far-right Freedom Party (FPOe) has increased its share of the votes to 21.4%, in an election with asylum as a hot topic. This increase of 3.9% should be since in the context of the other far right party, BZOe, (set up by Joerg Haider splitting away from the FPOe) losing 7.1% of their vote, dropping to 3.6% (the BZOe have tried to become more liberal/libertarian recently). The new Liberal party, NEOS, did slightly better than the BZOe, while the Greens also increased their vote marginally. The biggest winner of the election is probably the businessman Frank Stronach who set up a political party ("Team Stronach") as his personal political vehicle, winning 5.8%. Team Stronach are an economically liberal, Eurosceptic party, though it's not focused on the immigration issue in the same way that the Freedom Party is.

The 4% threshold to enter parliament means that apart from the BZOe, all of these parties will get in. Despite the centre-left lead coalition, the right has grown in Austria, with various strains of populism doing well. Having continuous Grand Coalitions probably doesn't help: without a clearer contest in the centre ground, the political space in opposition is left more open to populist parties.

In the end this election brought even more of what the German election last week brought: continuity.

Monday 23 September 2013

Bundestagswahl 2013 - Merkel stays in control

The big headline - that Merkel remains in prime position after the German federal elections - isn't a big surprise, for Germany or for Europe. The shape of the next governing coalition and the impact on German and European politics, however, it a more complicated matter. As a parliamentary election, the German media have been calling the election too close to call, despite Merkel's CDU (and sister party CSU) having a 17% gap from its nearest rival, the centre-left SPD. Still, the Christian Democrats are within a few seats of an overall majority by themselves, so they are clearly in the driving seat for the next parliamentary period.

The SPD have improved on their electoral performance since the last elections, but it was nowhere near enough to challenge the CDU, with the Christian Democrats also increasing their share of the vote (and by an even greater amount than the SPD). The Christian Democrats have done extremely well, particularly given the leftwards drift of German politics. Over the last parliamentary term, there has been Fukashima (which tarnished the image of the nuclear industry and caused Merkel to U-Turn on the issue by promising the phasing out of nuclear power), the end of conscription (something the opposition wanted, and which shocked CDU traditionalists), and a sharp increase in the inequality gap in Germany.

But for each of these issues, Merkel has moved into the territory of her centre-left opponents, and essentially prevented them from making political capital out of these issues. The CDU has even gone into the election supporting a minimum wage! When Merkel has come to embody prudent management (despite passing remarkably little of her programme over the last two governments), the opposition has to offer change to get in. And if Merkel steals their policies for change...?

The Left Party and the Greens have lost votes in this election. While the Left Party had been in decline throughout the last few years, the Greens had been riding high, having even taken the senior coalition partner position in the Baden-Wuerttemberg Land government. Controversy over their tax policies has played badly in the media despite their best efforts to explain them, and has been a factor in losing support.

The biggest losers though are the junior coalition partners of the current government: the market liberal FDP. They have not met the 5% hurdle necessary in order to get into the Bundestag. CDU voters have not given their second vote to the FDP to make a right-wing coalition possible. On the other hand, the Eurosceptic party, Alternativ fuer Deutschland, has done quite well, and might just make it into the Bundestag.

Coalitions and Political Courses

All this means that a centre-left government is not going to form. The SPD have not done well enough, and the Greens have lost support, making the opposition coalition-in-waiting without a majority. If they add in the Left Party, they could forma majority, but the Left Party, with its East German Communist roots, is still not trusted on the federal level by the centre-left parties. Peer Steinbrueck, the SPD candidate for Chancellor, has ruled a coalition with the Left Party out, confirming that the CDU will lead the next government.

Therefore the CDU/CSU will probably form a Grand Coalition with the SPD (without the SPD candidate for Chancellor serving in the government, but that's not such a big problem for the SPD). There is the possibility of a CDU/CSU coalition with the Green party, as the Greens have gone into coalition with the CDU in Hamburg before, and the SPD are wary of Grand Coalitions since their experience in the first Merkel government, with Steinbrueck sounding negative about the idea. I still think that a Grand Coalition is the more likely outcome, however.

So what will be the effect on German and European politics? On the Eurozone, the opposition were in favour of Eurobonds and more radical action, so this option may find more favour with the next German government, though strong conditions would no doubt be attached. Within the next coalition, this could cause problems with the Christian Democrats' right wing, and the (relative) success of the Eurosceptic AfD might encourage more backbench rebellions from the CDU/CSU's right. (Notably, the AfD has claimed to be the inheritors of the FDP's political space).

That said, the good performance of the AfD probably won't have the same impact on the German political scene as UKIP have had in Britain. First of all, the AfD have only gained around 5% of the vote, and secondly, the CDU/CSU have increased their share of the vote by more than that - and specifically for the reason of Merkel's leadership, which includes the Eurocrisis. Finally, small parties tend to have a tough time in Germany. Though the Greens have done very well in becoming established, the rise and fall of the Pirate Party, and the more obvious collapse for the FDP, shows for the CDU as a Volkspartei (broad-church type party), that they can wait small parties out.

Continuity will be the watchword in German politics. The coalitions may chance, but Merkel remains in control. she dominates the political scene, and has set the pace of European politics. Freed by this win the speed of EU institutional reform may speed up, but I don't expect much divergence from the Merkel plan.

Merkelpolitik remains.