German politics has delivered yet another masterclass in how to betray your voters while maintaining a straight face. This time it is Friedrich Merz, the supposedly steel-spined conservative who spent years critiquing Angela Merkel’s drift leftward, who has now managed to outdo even his predecessor’s talent for abandonment of what he promised.
Merz’s capitulation on Germany’s constitutional debt brake – a cornerstone of his campaign – took precisely fourteen days. Not even Britain’s most notorious policy flip-floppers could match such efficiency. The CDU leader who thundered about fiscal discipline on the campaign trail has now, with indecent haste, embraced the Social Democrats’ spend-now-worry-later philosophy, leaving Germany’s vaunted Swabian housewife – that mythical guardian of Teutonic thrift – face down in the political gutter.
The comedy of the situation would be perfect if it weren’t so devastating for German governance
What is particularly infuriating is the asymmetry of this surrender. Merz’s CDU secured 28 per cent of the vote in February’s election – a mandate that, while hardly overwhelming, should have given him significant leverage in coalition negotiations. At least it should have given him confidence. Yet the Social Democrats, limping in with a humiliating 16 per cent (their worst showing since the 1890s), appear to be dictating terms as if they had won the election. One begins to appreciate the titanic achievement of former Finance Minister Christian Lindner and his now-ejected Free Democrats in maintaining some semblance of fiscal discipline against the spending impulses of Germany’s left-leaning parties.
But the true farce, the cherry atop of this capitulation, is that Merz has been comprehensively outmanoeuvred not merely by the SPD but by the Greens, who secured a paltry 11 per cent of the vote and aren’t even in his coalition. It’s no small irony that the very party Merz spent the campaign trail denouncing as left-wing lunatics lacking rational thought now holds the keys to his chancellorship. His Bavarian allies in the CSU were even more dismissive, labelling the Greens a discontinued model and political junk. Hell hath no fury, indeed, like a Green party scorned.
On Tuesday evening last week, the CDU revealed its most dismal face: a conflict-averse, reform-allergic, thick-bottomed pseudo-conservatism that preserves nothing but the illusion that the German public can be shielded from harsh realities. This brand of conservatism shrinks from the very changes necessary to maintain Germany’s peace and prosperity.
The justification offered – a supposed new ‘turning point’ after Trump’s outburst in the Oval Office – is transparently a mere excuse. The second pretext, that several budgetary holes have suddenly been discovered, is equally unconvincing. Voters chose the CDU with its Bavarian sister, the CSU, for a change in policy direction. Instead, they’re getting what spineless conservatives do best: quivering at the prospect of necessary confrontation with Germany’s statist status quo, tax-funded elites, and debt-addicted, growth-hostile establishment.
Merz folded completely within hours of negotiations beginning. Economists rightly point out that for years – indeed decades – the German state has been swimming in money while shirking any meaningful reform out of post-heroic cowardice. Angela Merkel squandered the peace dividend on social frivolities and populist luxuries, neglecting both infrastructure and defence capability. Meanwhile, her Russia policy and the Nord Stream 2 debacle laid the groundwork for Ukraine’s current predicament.
The Greens, meanwhile, have played their weak hand with Machiavellian skill. When Merz and the SPD concocted their paradigm-shifting plan to take on what could be close to €1 trillion (£841 billion) in new debt over the next decade – a fiscal bazooka ostensibly aimed at boosting Germany’s defence and its stagnating economy – the Greens held their ground, refusing to simply acquiesce to security concerns about Putin and Trump.
The comedy of the situation would be perfect if it weren’t so devastating for German governance. Merz desperately needed the Greens to agree to his spending plan before 25 March, when the new Bundestag convenes and the pro-Kremlin AfD gain enough strength alongside The Left party to block changes to Germany’s debt rules in the constitution. In a spectacular display of political games, the Greens extracted substantial climate concessions from the very man who had vilified them throughout the campaign. What emerged looks suspiciously like a Green policy document with Merz’s signature hastily scrawled at the bottom.
What we’re now witnessing in this ‘KleiKo’ (a diminutive for the now very small coalition between CDU/CSU and SPD) is a debt-fuelled nuclear fusion of two fundamentally statist, social democratic parties, with Green fingerprints all over the detonator. This will only accelerate the German economy’s downward spiral and hand over a large number of voters to the far-right AfD. As economist Lars Feld emphasises, Germany is losing its function as a safe haven for bondholders. Germany is sliding into a lira-world of financial uncertainty.
The Union’s last hope for salvation would be to counter this shameful death of the debt brake with brutal and painful cuts to Germany’s grotesquely oversized social budget. A radical structural reform of the state’s consumptive social expenditure should be the foundation of any deal with the Social Democrats.
The quintessential irony is that Merz’s plan to reform constitutional debt rules, including a €500 billion (£420 billion) infrastructure fund, sounds precisely like something the Greens would have proposed themselves. His chancellorship was effectively doomed from the beginning without the blessing of a party he had spent months demonising. The Greens’ initial reluctance was merely a negotiating gambit to extract climate concessions. In the end, Friday’s agreement did deliver a lifeline for Ukraine by exempting aid to Kyiv from Germany’s constitutional spending restraints – perhaps the sole silver lining in this otherwise bleak capitulation.
There’s barely a hint of ‘Politikwechsel’ – policy change – in the exploratory paper released over the weekend. Fittingly, the meagre sentence about making savings as part of budget deliberations is the only line containing the word ‘save’. It’s almost elegant in its vacuousness, eerily reminiscent of Merkel’s infamous ‘We can do this’ line on migration. No structural reforms, no questioning of enormous state expenditures. Nothing.
This is hardly surprising: why would the SPD surrender its statist edge when the billions for everything have already been pocketed? The only thing more bitter than Friedrich Merz’ capitulation is the disappointment awaiting hitherto trusting Union voters: vote conservative, get social democracy. It’s the German perpetual motion machine.
What we’re witnessing is not merely a failure of political courage but a betrayal of an electorate that voted for change. The AfD, already buoyed by the election results, will find fertile ground among disillusioned conservative voters who see their party leadership caving to the very policies they sought to reject.
What makes this capitulation particularly egregious is the timing. As Europe faces its most serious security crisis since the Cold War and economic headwinds threaten to become a full-blown continental recession, Germany needed leadership that could make difficult choices. Instead, Merz has opted for the path of least resistance – a politically expedient sugar rush of deficit spending that will briefly mask structural problems while exacerbating them in the long term. The man who positioned himself as Germany’s Churchill has revealed himself to be nothing more than Neville Chamberlain with better tailoring.
History will record Merz’s first act as chancellor-designate as a political own goal of such spectacular proportions that even England’s penalty-takers would wince in sympathy. He has managed the remarkable feat of being comprehensively outplayed by two parties with less than half his electoral support combined. The Green party, with their 11 per cent showing, have effectively gained policy victories from the opposition that they couldn’t achieve in government. This is catastrophic not just for the CDU but for centrist politics in Germany as a whole. When voters discover that their ballot for fiscal sanity delivers instead a Green-tinged spending spree, the extremes will only grow stronger. Merz has salvaged his chancellorship at the cost of the very principles that might have made it worth having.
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