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German SPD seeks allies to replace Merkel-led coalition

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Germany's Social Democrats are set today (27 September) to start the process of trying to form a government after they narrowly won their first national election since 2005 to end 16 years of conservative-led rule under Angela Merkel, write Emma Thomasson and Paul Carrel.

The centre-left Social Democrats (SPD) won 25.7% of the vote, ahead of 24.1% for Merkel's CDU/CSU conservative bloc, according to provisional results. The Greens came in at 14.8% and the liberal Free Democrats (FDP) were on 11.5%.

The SPD's recovery marks a tentative revival for centre-left parties in parts of Europe, following the election of Democrat Joe Biden as U.S. president in 2020. Norway's centre-left opposition party also won an election earlier this month.

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The Social Democrats' chancellor candidate, Olaf Scholz said he hoped to strike a coalition deal before Christmas, although

his Christian Democrat rival Armin Laschet, 60, said he could still try to form a government despite leading the conservatives to their worst ever election result. Read more.

Merkel will stay in charge in a caretaker role during the coalition negotiations that will set the future course of Europe's largest economy.

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German shares (.GDAXI) opened 1.1% higher on Monday, with investors pleased that the pro-business FDP looked likely to join the next government while the far-left Linke failed to win enough votes to be considered as a coalition partner.

"From a market perspective, it should be good news that a left-wing coalition is mathematically impossible," said Jens-Oliver Niklasch, LBBW economist.

He said other parties had enough in common to find a working compromise.

"Personalities and ministerial positions will probably be more important in the end than policies."

The parties will start sounding each other out today about possible alliances in informal discussions.

A page of the printed edition of Bild newspaper shows Social Democratic Party (SPD) leader and top candidate for chancellor Olaf Scholz, after the first exit polls for the general elections in Berlin, Germany, September 26, 2021. REUTERS/Andreas Gebert
Supporters of the Greens party react after the announcement of the first exit poll results on the general elections in Berlin, Germany, September 26, 2021. REUTERS/Christian Mang

The SPD is likely to seek an alliance with the Greens and the FDP to secure parliamentary majority, although the two parties could also team up with the conservatives.

SDP General Secretary Lars Klingbeil told ARD television, the party would fight to ensure Scholz becomes the next chancellor. "We won the election," he said.

The SPD will talk to the Greens and the FDP about forming the next government, Klingeil said, adding that party leadership was set to meet on Monday to discuss the next steps.

The Greens and FDP said last night, however, they would first talk to each other to sound out areas of compromise before starting negotiations with either the SPD and CDU.

If Scholz, 63, succeeds in forming a coalition, the finance minister in Merkel's cabinet and former mayor of Hamburg would become the fourth post-war SPD chancellor.

Paul Ziemiak, general secretary of Merkel's Christian Democrats, said there was still a chance for his party's alliance with the Greens and FDP, adding that Laschet knew how to keep coalitions together.

Merkel has stood large on the European stage almost since taking office in 2005 - when George W. Bush was US president, Jacques Chirac in the Elysee Palace in Paris and Tony Blair British prime minister.

But Berlin's allies in Europe and beyond will probably have to wait for months before they can see how the new German government will engage on foreign issues.

Assuming the SPD agree a deal with the Greens and the FDP, the Greens could provide the foreign minister, as they did with Joschka Fischer in their previous two-way alliance with the SPD, while the FDP is seeking the finance ministry.

A row between Washington and Paris over a deal for Australia to buy U.S. instead of French submarines has put Germany in an awkward spot between allies, but also gives Berlin the chance to help heal relations and rethink their common stance on China.

On economic policy, French President Emmanuel Macron is eager to forge a common European fiscal policy, which the Greens support but the CDU/CSU and FDP reject. The Greens also want "a massive expansion offensive for renewables".

One thing is certain: the future government will not include the far-right Alternative for Germany (AfD) which scored 10.3%, a fall from four years ago when they stormed into the national parliament with 12.6% of the vote. All mainstream politicians rule out a coalition with the party.

Following the victory of the SPD in yesterday’s parliamentary elections with 25,7% as first parliamentary group, the S&D Group congratulates Chancellor candidate Olaf Scholz and the SPD for their successful campaign and strong result. The elections in Germany send a clear message for a strong social democracy and progressive policies all across Europe. 
 
Commenting on the German elections, S&D Group president Iratxe García Pérez said: “Olaf Scholz has led a great campaign. German citizens clearly appreciate his work in the outgoing coalition government and they trust he can lead the country through its transition towards a more sustainable and fair socio-economic model. 

“This is very good news for the European Union, because he can bring new impetus to the reforms we need to adapt to the digital age and to respond to new global challenges by putting people first. We now have to let the conversations take place, but I hope the new German government will be in place soon, and we have a new progressive leader in the Council.

“The gloomy forecasts for social democracy have been proved wrong, and instead we are witnessing a strong wave of support for progressive policies in Europe.”

Jens Geier, head of the SPD Delegation in the S&D Group, added: “This Social democratic success can also strengthen social and sustainable politics at the European level. With an SPD-led government, we now have the chance for a different approach in European politics. 

“The result of the elections shows that many citizens are convinced of the social democratic programme for the future: For the ecological and digital transformation of the society we also need the social dimension for it to succeed. An SPD-led government would work for this and also increase the pressure on the implementation of the Green Deal. We can only solve the big challenges of our time when we work at the European level. Under an SPD-led government Europe would no longer be a marginal part of the German government policy but move to the centre”. 

France

In post-Merkel EU, Macron can't exert leadership without allies

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FILE PHOTO; French President Emmanuel Macron looks on as he visits the Richelieu site of the Bibliotheque Nationale de France (National Library of France), after the completion of the renovation project and the 300th anniversary of the installation of the royal collections, in Paris, France, September 28, 2021. Bertrand Guay/Pool via REUTERS

Angela Merkel's exit from the EU stage she dominated for 16 years has handed French President Emmanuel Macron an opportunity to take up the mantle of European leadership and press on with his plans for a more independent Europe, write Michel Rose, John Irish and Leigh Thomas.

Not so fast, diplomats from countries across the European Union say.

The energetic French leader has sought to bring a clarity of strategic vision that the bloc under Merkel, often dubbed the "Queen of Europe", at times lacked and Brussels has often adopted his vernacular.

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But in a post-war Europe founded on consensus, Macron's direct and abrasive style, coupled with a willingness to go it alone in a bid to shape EU strategy, means he will struggle to fill Merkel's shoes, senior diplomats across the region said.

"It's not like Macron can lead Europe alone. No. He has to realise that he has to be careful. He can't expect people to jump on the French bandwagon," one diplomat posted to Paris from one of the EU's founding nations said.

"Merkel had an extraordinary place. She was listening to everyone, respectful of everyone."

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Tellingly, Macron found few swift voices of support among European allies when Australia scrapped a mega defence deal for submarines from France. Read more.

The silence pointed to deep opposition among central and European countries with Macron's vision of European defence autonomy and a reduced reliance on U.S. military protection from Russia.

Despite an effort to show eastern EU countries more love than past French presidents, countries from the Baltic to the Black Sea, which see the United States as the only credible shield from Russia, were appalled when Macron called NATO "brain-dead" and urged dialogue with Moscow.

Macron's office did not reply to a request for comment on the criticism. French officials admit privately his strategy to engage Russian President Vladimir Putin has yielded scant results.

"We could have told him how this Russia policy would end up," an ambassador to France from an eastern European country scoffed. "We understand Macron needs contacts with Russia. Merkel did too. But it's the way he went about it."

WOOING DRAGHI, RUTTE

To be sure, Merkel also pushed projects that deeply divided EU members, such as the Nordstream 2 pipeline between Russia and Germany. But she was always careful to avoid the kind of defiant rhetoric that Macron has been accustomed to, the diplomats said.

"France has a vision but it's often too assertive and Macron's leadership can sometimes be disruptive," said Georgina Wright of the Institut Montaigne think tank in Paris. "The Franco-German tandem is very important but Macron, to his credit, realises it isn't enough," she added.

Several diplomats cited two leaders who would be crucial to Macron's future success in Europe regardless of the outcome of Germany's coalition negotiations after Sunday's election, in which Merkel's conservative bloc slumped to a record low result: Italian Prime Minister Mario Draghi and Dutch Prime Minister Mark Rutte.

Macron has already started to woo Draghi, a respected former European Central Bank chief credited with saving the euro, inviting the Italian to his summer retreat before the visit was cancelled because of turmoil in Afghanistan, a source said.

He has also started to engage with Rutte, who has successfully united a group of fiscally conservative countries known as "the Frugals".

Macron once told Rutte "you are becoming more like us, and we are becoming more like you", a diplomat familiar with the exchange said.

All five senior diplomats Reuters spoke to said many EU countries were now coming round to Macron's ideas. Capitals that once saw talk of protecting European companies from Asian or American rivals as French fads are now less reluctant, after Beijing and Washington adopted more aggressive policies.

"He seemed a bit radical but we discovered some of the things he pushed for were quite sensible," a diplomat from a Baltic country said.

Brexit too has shifted the dynamics within the bloc as France prepares to take up the rotating presidency of the EU in January.

"We used to be able to hide behind the British, but we lost a big back to hide behind," the diplomat said. "So we are starting to reach out."

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European elections

Germany’s far-left party eager to join coalition while others steer clear

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Co-leader of the Left Party Susanne Hennig-Wellsow speaks at a press conference during a convent of Germany's left party 'Die Linke' in Berlin. Copyright  Credit: AP

While Angela Merkel (pictured) avoided political campaigning for much of the election, as it became increasingly clear that her party was trailing in the polls, she went after her centre-left deputy with an old attack line, writes Lauren Chadwick

“With me as Chancellor, there would never be a coalition in which the Left is involved. And whether this is shared by Olaf Scholz or not remains to be seen,” Merkel said in late August.

Scholz also had criticism for Die Linke -- the Left Party -- but stopped short of completely rejecting the possibility of a coalition with them. He told German daily Tagesspiegel the far-left party would be required to commit to NATO and the transatlantic partnershipIt’s now been a constant attack line from the Christian Democrats in what some say is a last-ditch effort to grab moderates on the fence between Merkel’s centre-right party and the centre-left Social Democrats, who are leading in the polls.

Voters see “behind” the attack line from the CDU, said Dr Rüdiger Schmitt-Beck at the University of Mannheim, as it is “so old hat".about:blank

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Schmitt-Beck added it was a “sign of desperation” the CDU was resorting to this attack line once again as candidate Armin Laschet has failed to galvanise voters, polls show.

A possible governing coalition?

Although experts say a coalition involving the far-left Die Linke is not what Social Democratic leader Scholz wants, he is not likely to completely rule out the possibility.

That’s because if current polling is correct, the future government coalition in Germany will need to be formed with three political parties for the first time, meaning the Left Party has never been closer to receiving a possible spot in a coalition.

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The party is currently polling at around 6% nationally, making them the sixth most popular political party in the country.

Die Linke party co-leader Susanne Hennig-Wellsow even told German newspaper Frankfurter Allgemeine Sonntagszeitung in early September: “The window was as wide open as ever before. When if not now?” in regards to a possible coalition with the Social Democrats and Greens.

Many saw her words as demonstrating the party’s high hopes and preparations for entering government.

But while the current Left Party has become more mainstream since it was officially formed in 2007 - its direct historical ties to communism and hard-left foreign policy might forever keep it out of government.

Communist history and hard-line views

Die Linke was formed as a merger of two parties: the Party of Democratic Socialism (PDS) and a newer Labour and Social Justice party. The PDS is the direct successor of the Socialist Unity Party of Germany, the communist party that ruled in East Germany from 1946 to 1989.

“There are many people in Germany who see this legacy as a big problem," said Dr Thorsten Holzhauser, research associate at the Theodor Heuss House Foundation in Stuttgart.

"On the other hand, the party has been de-radicalising for a couple of years or even decades now. It's shifted towards a more left-wing social democratic profile in the last years, which is also something that many people have recognised."

But Die Linke is quite polarised internally with more moderate politics in East Germany and more radical voices in some West German regions.

While a younger generation of voters is more connected to the social justice issues and hot political topics such as the climate, feminism, anti-racism and migration, other parts of the party appeal more to populism and compete with the far-right Alternative for Germany (AfD), experts say.

The party currently has one state minister-president: Bodo Ramelow in Thuringia.

But some of the party’s hard-line foreign policy views make it an unlikely choice for a governing partner.

“The party always said that it wants to get rid of NATO, and it is a party that stems from East Germany, from a very pro-Russian political culture, a very anti-Western political culture, so this is in the DNA of the party,” says Holzhauser.

Die Linke wants Germany out of NATO and no foreign deployment of Germany’s military, the Bundeswehr.

“We will not participate in a government that wages wars and permits combat missions by the Bundeswehr abroad, that promotes armament and militarisation. In the long term, we are sticking to the vision of a world without armies,” the platform reads.

Die Linke also rejects treating Russia and China as “enemies” and wants closer relations with both countries.

‘Unlikely’ to join a coalition

“There is a chance. It's not a very big chance, but there is a chance (Die Linke could join a coalition)," says Holzhauser, yet traditionally the “scare tactics by Conservatives have been very strong at mobilising against a left-wing alliance”.

Die Linke, which used to poll ahead of the Greens and Alternative for Germany (AfD) could have a problem garnering support in the future, he said, as it becomes less of a populist party and more establishment.

“While in the past, Die Linke has been quite successful as a somewhat populist force that mobilised against the West German political establishment, nowadays, the party is more and more part of the establishment,” says Holzhauser.https://www.euronews.com/embed/1660084

“For many voters, especially in East Germany, it has successfully integrated into the German party system. So this is the flip side of the coin of its own success, that it is getting more integrated and established but at the same time it loses attraction as a populist force.”

On social issues, it's more likely to have similar demands to the Greens and Social Democrats, however, including a wealth tax and higher minimum wage. They are platform ideas that haven't come to fruition in the current SPD/CDU coalition.

But whether that means they will enter government remains to be seen, despite the perceived high hopes of the party's leaders.

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European elections

German conservatives raise spectre of far-left rule ahead of election

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Gregor Gysi of the left wing party Die Linke speaks during an election campaign rally in Munich, Germany, September 17, 2021. REUTERS/Michaela Rehle/File Photo
Germany's co-leader of the left wing party Die Linke Janine Wissler, top candidate for the September general election, campaigns in Munich, Germany, September 17, 2021. REUTERS/Michaela Rehle/File Photo

A shadow is looming over Germany's election: the spectre of the far-left Linke party, heir to the communists who once ruled East Germany, coming in from the political wilderness, write Paul Carrel and Thomas Escritt.

At least, that is what Angela Merkel's conservatives want voters to think. Behind in polls just days before Sunday's (26 September) vote, her would-be successor is warning that Social Democrats, if victorious, would let the far-left into power. Read more.

"You have to have a clear position on the extremists," conservative candidate Armin Laschet told his Social Democratic rival Olaf Scholz during a televised debate earlier this month. "I don't understand why it's so hard for you to say 'I won't enter a coalition with this party'."

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For the conservatives, the Linke are just as unpalatable as the far-right Alternative for Germany, whom all major parties have pledged to keep out of government. Read more.

Scholz has made it clear that the Greens are his preferred partners, but the conservatives say he will need a third party to form a coalition government. And they say the Social Democrats are closer to the Linke on social policies than to the pro-business Free Democrats - the conservatives' preferred dance partner.

Few expect this to happen - the Linke are on just 6% in polls, half the liberals' 11%, which probably would not be enough to give Scholz the required parliamentary majority.

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But for some investors, it is a risk that should not be overlooked.

"Inclusion of the Linke in a governing coalition would, in our minds, represent the single biggest wild card by far for financial markets from the German elections," said Sassan Ghahramani, chief executive of U.S.-based SGH Macro Advisors, which advises hedge funds.

Linke policies such as a rent cap and property taxes for millionaires would be enough to spook many in Germany's business class.

Most assume that a victorious Scholz - a strait-laced finance minister and a former mayor of Hamburg - would include the Free Democrats as a moderating influence in his coalition.

Both SPD and Greens have also ruled out working with any party refusing to commit to the NATO military alliance or Germany's European Union membership, both of which the Linke has called into question.

READY FOR GOVERNMENT?

Undeterred, the leftists are pitching themselves as ready for government responsibility three decades after East Germany vanished from the map.

"We're already in NATO," party co-leader Dietmar Bartsch told a recent news conference, dodging questions over whether its foreign policy views would keep it from entering government.

Bartsch, 63, whose political career started when he joined East Germany's Socialist Unity Party in 1977, leads the Linke alongside Janine Wissler, 40, a westerner who hails from a town just outside Germany's financial capital Frankfurt.

If foreign policy is an obstacle, the party prefers to talk economics. Here it is not far from the Social Democrats or Greens and Bartsch says once in government the party would make sure its partners delivered on campaign promises, such as the SPD's proposed 12 euro hourly minimum wage.

The party has outgrown its East German base, establishing strongholds in poorer, post-industrial cities in western Germany.

It heads the government in the eastern state of Thuringia, and is the junior partner with the SPD and Greens in Berlin's city government.

Analysts say that, as a centrist, Scholz would be more comfortable with the Free Democrats, but will not rule out the Linke to keep leverage over the liberals, keen to play kingmakers in coalition talks.

The Social Democrats' lead in the polls also suggests the left's communist roots carry less weight with voters than in the past. Greens leader Annalena Baerbock said it was just wrong to say they were just as bad as the far-right because the latter did not respect Germany's democratic norms.

"I consider this equation of the AfD with the Left to be extremely dangerous, especially because it absolutely trivialises the fact that the AfD is not aligned with the constitution," Baerbock said in a television debate this month.

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