Why the world will not wait for German coalition

WITH Germany's 2022 presidency of the Group of 7 (G7) beginning in January, the three political parties negotiating a new coalition in Berlin are beginning formal talks - sooner than expected - this week to try to take up the reins of power before year-end.

Germany's hosting of the G7 is not the only big, upcoming international event that is putting urgency into the negotiations given that this autumn will see the Group of 20 (G20) and COP26 climate summits. While a new coalition is unlikely before those landmarks, which Angela Merkel is likely to attend in her role as caretaker chancellor, her expected replacement Olaf Scholz wants to try to ensure that he is in power to kick off his nation's big G7 year from January onwards.

The anticipated new 'traffic light' coalition of the centre-left Social Democrats (SPD), the pro-business liberal Free Democrats (FDP) and the Green Party will see potentially important policy changes on the horizon. While many see the main contribution of the Greens, who placed third in last month's election, to be on sustainability or so-called ESG issues, it could be other issues such as China where it has unexpected impact.

This is because this year's election indicated that there is a relative political consensus among the key parties over topics like global warming. However, there is a sharper divergence over China ahead of next year's 50th anniversary of bilateral ties, compared to the Merkel era, which could see a more conflictual policy, including over human rights in general, and Xinjiang specifically. This is because the Greens favour a more 'human-rights centric' approach to Beijing with one of the party's Member of the European Parliament, Reinhard Butikofer, asserting recently that "Germany's unbalanced China policy is heavily skewed towards the interests of a few multinational corporations at the expense of other sectors of our economy, and certainly at the expense of our values and security concerns".

The closeness of Beijing and Berlin in the last decade and a half was underlined by Chinese President Xi Jinping only last Wednesday when he held a video conference with Merkel. He said that she has always been a friend of the Chinese people and welcomed her to visit the country after leaving office.

Beijing regards Merkel as a stabilising ally who has helped counteract the growing number of US and European politicians calling for decoupling from China. In recent months, for instance, she has pushed hard for ratification of an EU investment deal with Beijing, which was signed last December, and spoke out against the idea that democracies should unite to isolate Beijing diplomatically. Thanks in part to massive German car industry investments and sales inside China, Berlin is also traditionally unconfrontational on Chinese human rights abuses.

CHINA-GERMAN TIES

In the years preceding Merkel's ascension to power in 2005, Beijing joined the World Trade Organization and German firms, many of which began setting up operations in China in the 1970s, profited enormously during its rise to economic superpower. Since 2015, China has been Germany's largest trading partner with the pair exchanging goods worth more than US$250 billion in 2020.

Yet, Merkel's "change through trade" strategy has fewer remaining supporters in Germany. Under Xi, China's economy remains under tight state control, its foreign policy has become more assertive, and alleged human rights abuses against Uighurs in Xinjiang and political dissidents have reportedly intensified.

China aside, one of the broader concerns held by many internationally about Germany's foreign policy in the new coalition of three - rather than two - parties is that policy direction will be more contested, as the current negotiations may bear out. This after the last decade and a half of Merkel on the international stage helping Europe navigate the political and economic tumult from the eurozone economic crisis to migration challenges more recently.

This underlines that, ultimately, Germany's political flux is not just a domestic issue, but one that also matters deeply for Europe, and indeed the world at large too, not least given that the country's economy is the largest in the eurozone. Germany is also the continent's most populous country with its influence within the EU likely to grow significantly post-Brexit with the departure of the United Kingdom from the Brussels-based club.

One of the drivers of Germany's political ferment is that the nation's post-war consensus is falling away in multiple areas. This includes history (such as attitudes towards World War II), geopolitics (including views towards Russia), the economy (such as attitudes towards the auto industry) and ethics (including views towards refugees), and this is reflected in the fracturing of the political landscape.

Historically, many Germans have been generally content with their post-Cold War lot, seeing themselves as beneficiaries of globalisation with unemployment at the last federal election the lowest since the reunification of East and West Germany after the collapse of the Soviet Union. However, this may be changing as shown by the rise of smaller parties with, for instance, the Greens which topped the polls earlier this year for several weeks.

The 2021 election result has brought the decline of the two-party system into sharp focus with the SPD becoming the first 'winning' party with less than 35 per cent of the seats in the Bundestag. The weak base of the next government coincides with unprecedented challenges that Berlin has to address, notably climate change, digitalisation, and creating new opportunities for those who will lose jobs to automation over the coming years.

However, the movement towards a multi-party system has longer origins. The last federal election, in 2017, saw some 42 parties competing for 598 Bundestag seats with six securing more than 5 per cent of the vote and therefore winning seats in the Bundestag.

THE FUTURE

Looking forward, the nation's multiparty system future may now mean that politics is generally more unstable and less predictable with even greater challenges each election cycle to establish a governing coalition. So there may be more rotating coalitions with problems this can bring, including potential paralysis and the prospect of the chancellorship becoming weaker in patchwork governments.

This underlines the historical crossroads the nation is now at. While a multiparty system could have some positives, the political danger is that domestic challenges will leave Germany's new government with less space to provide strategic foreign policy direction vis-a-vis EU affairs and Europe's place in the world.

• The writer is an associate at LSE IDEAS at the London School of Economics