The German Chancellor’s CDU party has lost an important regional vote. This gives her challengers a psychological boost, but shouldn’t prevent her from winning next fall’s national ballot. And she will be relieved to see that anti-euro parties aren’t gaining ground in Germany.
Last Sunday is one to forget for German Chancellor Angela Merkel. In a super-tight race, her conservative CDU and the free-market FDP lost its majority in the parliament of Lower Saxony. After 10 years of conservative rule, one of Germany’s biggest regions will fall to the Social Democratic Party (SPD) and the Greens. This will give Merkel’s challenger for the country’s leadership a much-needed psychological boost.
Lower Saxony, however, is an imperfect bellwether for Berlin. The SPD is significantly weaker on the national level and it is being dragged down by its unpopular and gaffe-prone top candidate Peer Steinbrück. Merkel, on the other hand, is seen as a trustworthy and sober politician in uncertain times.
For another reason, building a red-green coalition in Berlin will be more difficult than in Lower Saxony. While the radical Left Party got quashed in the region, it is likely to be present in the nation’s Bundestag. The SPD is adamant not to govern with the former communists on the federal level, but will find it difficult to build a majority without them. So Angela Merkel is still the favourite, likely to get a new term in the fall, maybe with a different coalition partner.
The Lower Saxony defeat will make her even more careful regarding the euro crisis. She will try to delay bold moves and difficult decisions until after the election. That is bad news for any country that might need the ECB’s still-untapped new bond-buying programme. And the crucial negotiations about the operational details of the banking union won’t become any easier.
The best news from Lower Saxony is that despite significant resentment against euro zone bailouts in the broader public, no anti-European party is gaining traction. The radical left got a beating, and the extreme right is invisible. All main parties share the general pro-European consensus. Even if the Social Democrats and the Greens manage to win in the fall, Germany’s stance on the crisis will remain broadly similar. Germany’s political system is stable at least.
This article was initially published as a Reuters Breakingviews comment on 21 January 2013.