Yesterday, the German parliament approved a historic amount of debt-funded investment in defence and infrastructure. Over the next few years, Germany may spend up to €1 trillion (£841 billion) on its depleted military and crumbling roads, buildings and train tracks. These eyewatering amounts of money are intended to act as the glue with which to bind the country’s prospective coalition together. But they also give an indication of how much of their own programme the election-winning conservatives are willing to sacrifice in exchange for power. The likely next chancellor, Friedrich Merz, now starts on a credibility deficit. He’ll have to work hard to get back into the good books of conservative voters.
If Merz spends the money well, voters will forgive him the means by which he got there
Few Germans would disagree that their country is in desperate need of investment. In recent polling, three-quarters of people said they approve of higher spending for the Bundeswehr, Germany’s armed forces, and of a debt-funded boost for infrastructure. In light of America’s withdrawal from European security politics under US President Donald Trump, that’s hardly surprising. Most Germans are also deeply worried about their ailing economy, the prospects of which were downgraded even further than expected in a recent OECD report. The country had the second-worst predicted growth rate, beaten to last place only by Mexico in a list of the twenty most important industrial nations.
Most Germans, then, don’t object to drastic measures aimed at improving their safety and prosperity. But what many do object to, however, are the compromises the new government had to make to get there before it has even taken office. Under Angela Merkel’s chancellorship, a ‘debt brake’ was written into the constitution, which means this level of borrowing now requires a two-thirds majority. For the conservatives to raise defence spending to above 2 per cent of GDP then, they had to give the centre-Left SPD €500 billion (£421 billion) for infrastructure and earmark €100 billion (£84 billion) for projects to get to net zero by 2045 to keep the Greens happy. Those are sums those two leftwing parties didn’t dare dream of before the February election put their unpopular coalition out of power.
Merz paid a very high price for their compliance and the grease with which to get an unwieldy coalition with the election-losing SPD moving – and not just from the public purse. Many conservative voters feel betrayed before he has even been confirmed as the new German chancellor. Before the election, Merz had promised to reform the existing German budget and fund new expenditure through cuts and economic growth, not by taking on new debt. Agreeing to the largest borrowing package in post-war German history just days afterwards is such a screeching U-turn that many of his voters now wonder what else he might agree to.
Wolfgang Bosbach, a prominent member and former politician of Merz’s conservative CDU party, said that voters may be asking: ‘Where is the promised change?’ He couldn’t see any obvious plans to accompany the spending with the cuts and efficiency measures Merz had advocated for before the election. ‘If we now also fold on illegal migration, then the conservatives might be headed for difficult times,’ he warned.
Before the election, Merz had promised tough measures to reduce the flow of asylum seekers to Germany, an issue that polls showed to be high up on voters’ priorities. This might indeed prove a tough issue to agree on with the SPD, whose key negotiators have already announced that they won’t stand for ‘de facto border closures’. This stands in direct contradictino to the kind of measures Merz had promised he’d implement ‘on day one’ of his chancellorship when he said he would ‘block all attempts to immigrate illegally without exception.’
Meanwhile, an SPD working group on ‘migration and diversity’ published a paper demanding immigration at the level of 500,000 people each year, legalising the status of illegal migrants if they’ve been in the country for three years, deportation only in extreme cases, voting rights for everyone irrespective of citizenship for long-term residents and automatic citizenship after 25 years. While this is not the position of the SPD leadership currently negotiating the coalition with Merz, the demands still indicate that the left wing of the party might rebel against stricter policies in this sensitive area.
Merz holds almost no cards to force the SPD closer to his own positions. This is despite the fact that Chancellor Olaf Scholz’s party got its worst result since the 1800s and should be in a much weaker position given that it now represents just 16.4 per cent of voters, compared to the conservatives’ 28.5 per cent. But Merz has ruled out working with the anti-immigration AfD, leaving him stuck with the SPD as the only option to form a majority in parliament. This is why this spending package has been described by observers as a ‘coalition of conservatives, SPD and Greens that will define the foreseeable future’. In other words, Merz will start a chancellorship that he wants to stand for change with a continuation of the projects of his predecessors.
The German public can see this too. One new poll suggests that the AfD would now only be 4 points behind the conservatives if there were re-elections. With Merz having had to bend as far as he did to get the budget approved, the AfD will find it easy to remind voters of his broken promises. Leader Alice Weidel has already argued that ‘Friedrich Merz promised political change – and delivers left-green polics with special debts’.
But Merz has potentially got a full term in office and an unprecedented amount of money available to convince voters that his compromise politics were a means to an end that they can agree on, too. Surveys suggest that the vast majority of Germans are glad that the budget came about and it does afford Merz a huge opportunity to turn things around for Germany and Europe.
If Merz spends the money well in order to tackle the big issues of the day: the economic crisis, European security and illegal immigration, voters will forgive him the means by which he got there. A saying that is attributed to the first German chancellor Otto von Bismarck has it that ‘laws are like sausages – it’s best not to see them made’. There is much truth in that. But whether Merz has a Bismarckian stomach for political conflict remains to be seen.
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