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After much public hesitation, official negotiations between Germany’s conservative CDU/CSU and progressive SPD parties finally begin today. Within the SPD, the issue has polarised the party’s membership, with some supporting another grand coalition and others vehemently opposing it. Internal debates and external analysis typically focus on questions of responsibility – towards the party, the nation, and Europe. A recurring theme among supporters of another coalition government is that the SPD must act stoically to uphold stability not only in Germany but the EU as a whole. Europhiles within and outside the party are eager to see another grand coalition take shape, hoping that it would answer French president Emmanuel Macron’s calls for deeper EU integration and thus usher in a new era of Franco-German leadership unhindered by brexiting Britain.

In the short-term, a grand coalition would certainly pursue an EU-friendly course that could help push overdue reforms to the EU’s financial framework. With the SPD on board, the next government would also be likely to be more flexible on fiscal rules and tone down the rhetoric of austerity. But with former Finance Minister and austerity hardliner Wolfgang Schäuble now heading the Bundestag, even a conservative government would be more willing to compromise on this issue. Nevertheless, significantly deepening EU integration in this and other areas along the lines of Macron is unlikely to happen regardless of who is in power in Berlin. Italy’s upcoming election will probably bring an at least mildly Euroskeptic government into power that will be uninterested in further integration. Central and Eastern European member states are increasingly at odds with Brussels and resent Western European dominance of the EU’s institutions. Even traditionally close allies such as Austria and the Netherlands are pushing their own agendas on austerity and migration, respectively. EU reform requires EU-wide agreement, not only Franco-German consensus.

From a political standpoint, entering another grand coalition would likely further weaken the SPD in Germany, with the populist AfD party ready to fill the vacuum. The SPD is currently polling at 18% nationally, down from 20.5% in the 2017 election and 25.7% in the 2013 election. Meanwhile, the AfD jumped from 12.6% in September last year to 14% now – only four points behind the SPD. If the social democrats join the new government, thereby alienating a large number of their voters, at least some will undoubtedly switch sides in disgruntled protest. Others will abandon a sinking ship and look elsewhere on the left. Regardless of whether the SPD could reinvent itself while in government, as the party leadership assures, many will not forgive Martin Schulz of breaking the promise he made on election night not to enter a coalition with Angela Merkel.

Following the end of such a coalition government’s term, Europe faces the prospect of a radically different political landscape in Germany. One in which the AfD may be the second largest, if not the largest party. One in which unstable three or four-way coalitions are the only way to avoid a populist right-wing government. In such a political arena, the centre-right may be tempted to join forces with the AfD after all – much like what happened in Austria last year. That kind of Germany would certainly extinguish hopes for meaningful EU reform, and may even threaten the entire project’s future.

The developments forecasted here could play out differently. Yet the elusive EU policy achievements of a grand coalition government are dwarfed by the political turmoil looming on the horizon. The real debate, then, should be about whether it is wiser to risk creating limited short-term instability or major long-term instability.

By Marco Funk

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