WASHINGTON — If the euro fails, the blame will not be on Greece, but on Germany. Europe’s economic powerhouse is now seen as the only force that can prevent a continental meltdown that would result in defaults, disintegration, and decline. As the Bundestag, Germany’s parliament, prepares for Thursday’s crucial vote on more guarantees for the expanded European Financial Stability Facility (EFSF), concern is mounting: is Germany ready to provide bold leadership? The question is not simply whether the Germans will cut another check to save Europe. A fundamental transatlantic and transcontinental divide about prudent economics informs and infests the debate about crisis resolution. And it threatens to create a standoff during this most dangerous of moments.

Most German economists doubt the proposed strategy first outlined by former U.S. Treasury Secretary Hank Paulson: “If you have a bazooka in your pocket and people know it, you probably won’t have to use it.” He referred to a weapon potent enough to force financial markets into submission. All subsequent bailout packages and guarantee programs followed that bazooka logic. But nearly every time, the loan and guarantee amounts needed to be revised upward as market pressures continued. This week is no different. While the Bundestag is being asked to increase German liability in a euro bailout to €211 billion (up from €123 billion), the debate in financial markets is whether the rescue fund’s capacity of €440 billion is sufficient. Many American economists suggest it should be doubled, tripled, or — through leveraging — quintupled. German parlamentarians chafe at the suggestion. Hadn’t they been told this was the last and final rescue package on which they would have to vote? Wouldn’t limitless bailouts and guarantees endanger the savior rather than help the countries in need?

In the end, the debate boils down to philosophical alternatives; it’s Keynes vs. Hayek, contagion vs. moral hazard, expansion vs. austerity. The German side bases its conviction on a domestically dominant school of thought called ordoliberalism, developed at the University of Freiburg by Walter Eucken and, to some degree, by Friedrich Hayek. The theory holds that the state must establish a proper legal environment for the economy. It creates order by setting rules on how market forces ought to work — and then sticks to them. Therefore, discretionary government interference in the market should be limited. The central bank’s mission should be confined to fighting inflation, thus avoiding the politicization of the institution.

On German insistence, the framework for the European Monetary Union was modeled on these principles. Each member state would comply with a set of rules, especially on debt and deficits. If the rules were broken, it meant that there were not enough rules. And they needed to be armed with punitive sanctions against violators. Moral hazard should be avoided at all cost. A debt crisis, in the German mind, is therefore best addressed by rooting out the underlying problem. A debt crisis is certainly not resolved by piling on more debt. Instead, a state should engage in structural reforms, reducing the deficit by spending cuts and tax increases. In short: austerity.

An orthodox ordoliberal would understandably think the devil has descended onto earth in the guise of Larry Summers, U.S. President Barack Obama’s former economic advisor. Consider his recipe for crisis resolution that continues to represent the mainstream thinking within the Obama administration: “It is the central irony of the financial crisis — caused by too much confidence, borrowing and lending, and spending — that it cannot be resolved without more confidence, more borrowing and lending, and more spending.” From this vantage point, the German response to the crisis has been tepid and government incrementalism futile.

Indeed, the central contradiction of the German crisis response is its insistence on the long-term at the expense of the short-term. In fact, some German recipes have made crisis resolution more difficult. Punitive interest rates for loans to Ireland, Portugal, and Greece may avoid moral hazard, but will increase rather than lower these countries’ debt burden.

This contradiction is best represented by Angela Merkel. The chancellor is anything but an ideologue. She has combined a moderate bailout strategy with German economic principles. Her incrementalism is more than just muddling through. Buying time for Greece has made sense, to a degree — it has allowed her to bring doubters around to support the previously unthinkable, it has allowed southern Europeans to lock in structural reforms, and it has allowed banks to sell off or partially write off southern European bonds. At the same time, the strategy has fallen short. Time was wasted by not sufficiently reforming the banking system and increasing its liquidity, not properly building firewalls to avoid contagion in the event of an eventual Greek default, and not aggressively focusing on growth.

Now Merkel is approaching the ultimate decision point. It’s bazooka or default. The problem with the bazooka is that it could destabilize the core of the six European triple-A-rated countries, thus becoming the ultimate path of contagion. The problem with default is that it currently ensures contagion. So far, Germany’s economic establishment has predictably responded by saying nein to the bond-buying program of the European Central bank, nein to Eurobonds, nein to a banking license for the EFSF, and nein to an insurance scheme to leverage the rescue pool. But a simple no is not a sufficient answer when Europe is hovering on the edge of the abyss. A German plan is needed, and now. This is the hour for leadership. History is calling, Madam Chancellor. Will you answer?

Thomas Kleine-Brockhoff is a Senior Transatlantic Fellow with the German Marshall Fund of the United States in Washington, DC.

BERLIN — In West Berlin the days and nights after November 9, 1989, we welcomed and hugged complete strangers, our East German countrymen, on the streets, chatting over a cup of coffee or a glass of Glähwein, with inconceivable and indescribable sentiments of ecstatic joy and happiness. The political mood in Germany and Eastern Europe today, however, seems sometimes to be rather that of a hangover. Everyone had expectations that have not been met. Various tasks of the transformation in Germany and in Eastern Europe are far from being completed. But what do these unfulfilled hopes and endeavors mean in light of the never-expected historic achievements in all of Europe and even in Russia?

President George H.W. Bush’s fervent support of Chancellor Helmut Kohl’s policy was the decisive key to overcoming French President François Mitterand’s concerns and Prime Minister Margaret Thatcher’s firm resistance to the reunification of Germany — the second time that the United States had rebuilt Germany in the 20th century, after Germany’s liberation from Nazism. In spite of Soviet Union President Mikhail Gorbachev’s early reluctance, the reunited Germany became a member of NATO, as even he believed in “all European nations coming together under one roof.” States of the former Soviet Union, such as the Baltic States, became members of NATO and the EU, as did other Eastern European countries. In 2007, the EU accepted the accession of Romania and Bulgaria even though the implementation of good government in both states is still lagging behind EU standards today. More than 80% of the national laws of every EU member state are derived from EU rules. This indicates the extent to which every EU member state is integrated into the EU, leaving aside the billions of euros the new member states received for the stabilization of their weak economies and agriculture.

Even Russia, in spite of its democratic and civil failings, is no longer the Soviet Union of 1989. Although Gorbachev might have raised a lot of Western hopes for integrating Russia into Europe, it can hardly come as a surprise that a country that had acted as an empire for centuries has grievances about the loss of almost all of its Eastern Bloc neighbors to the Western orbit. But Russia’s post-imperial grievances turn out to be more problematic for Russia than for its neighbors. Their alignment with the West is irreversible. The Warsaw Pact and the Breshnev doctrine are history.

The political clout of East European states has grown with their EU membership. Their influence in the East European neighborhood is crucial for the EU, but at the same time requires the support of major EU states. Germany, with its new government, is going to recognize once again the importance of Eastern Europe — both inside and outside the EU — for Europe’s security as a whole.

WASHINGTON — It is admittedly difficult to explain to Americans why they should be excited about Ireland’s approval of the European Union’s Lisbon Treaty on Friday.   When told that the EU will run more smoothly under the new treaty, Americans are likely to want to know instead whether this means Europeans will do more on the global agenda.     Yet, just as we ask Europeans to appreciate the incremental nature of progress on policies like energy and health care, Americans should welcome the Irish “yes” as good news. Why? It’s a step forward for the EU in assuming more responsibility in international affairs.

The Irish “yes” sets the table for finishing the institutional reforms that were the flip side to the European Union’s enlargement to ten new members in Central and Eastern Europe.   The EU has been stuck in recent years, almost obsessively focused on its own internal reform after having been stung by European voters’ rejection of greater political integration.   Along with the newly elected center-right government in Germany, progress on the Lisbon Treaty makes this the time to encourage Europeans to live up to their global aspirations as partners with the United States.

The improvements provided by the Lisbon Treaty, once implemented, will represent modest progress.     It won’t solve the Henry Kissinger question of what telephone number to use when you want to speak with “Europe,” but it will help.   You’ll still need to decide what you want to talk about:   if it’s competition and antitrust policies, you should call the European Commission because they make the decisions in that area.   If it’s foreign policy, you should call the European Council, where the High Representative for the Common Foreign and Security Policy resides (although you’ll still want to call the relevant national capitals as well, which retain control of their own foreign policies).  

There will be a President of the European Council with a two-and-a-half-year term, replacing the current system whereby the presidency rotates every six months among the members.   Horse-trading and speculation have already begun about the identity of the first President of the European Council (Tony Blair?   A lesser-known European like Luxembourg’s Jean-Paul Junker?), but this is inevitable and shouldn’t distract us from the bigger picture.   (I would be relieved if we would all agree to ignore Czech President Vaclav Klaus’ foot-dragging in fulfilling his obligation to sign the Lisbon Treaty already passed by the Czech Parliament.     Does he not care how poorly this reflects on his country among the other members of the EU?)

Sure, the EU remains confusing to Americans (as it does, to be fair, to many Europeans) but it doesn’t merit the casual scorn that it often gets from some American observers.   This is in part because Americans keep trying to see it as a “United States of Europe” and are disappointed when it doesn’t live up to our expectations.   The EU is not the government of Europe, nor likely will its institutions ever mirror the nation-state, but it is an important player in its own right in many areas where we need to work together.

The EU is already the match of the United States in the economic sphere, and our economies are deeply intertwined.   Progress on a world trade agreement has been languishing (even though there are those who say it’s already too late). At a minimum, American and European leaders should recommit themselves to the Transatlantic Economic Council as a forum for resolving economic and regulatory differences. On foreign policy, the EU has no combat troops to send, but many of the pressing challenges are on the post-conflict reconstruction and development side, where the EU’s experience could be valuable.   On climate change, the EU has staked out a bold promise to reduce emissions by 2020, and the United States could benefit from European lessons learned in creating a carbon market.

President Obama has made clear his view that the United States cannot solve the world’s problems alone. But Americans should go a step further on the public diplomacy side and reassure Europeans that a strong EU is in the American interest.   Although this has been the policy of every American president in recent decades, one of the divisive legacies of the Iraq war was the suspicion that in reality America really wants to divide Europe so it can pursue its own policies unilaterally.     Of course we will not agree on everything, and Americans and Europeans have deep and enduring differences over the use of force in international affairs.   But our differences shouldn’t be accompanied by dismissals of our mutual interest in dealing with the problems facing us on both sides of the Atlantic.

Chancellor Angela Merkel famously displays upon her desk a framed picture of an 18th century princess from the German East who journeyed far from home to subdue a court teeming with dangerous rivals, and from there to rule an alien empire: Catherine the Great. Being an Empress in that dark era held undeniable advantages. One did not have to seek regular approval from one’s unwashed subjects, and one could, well, dispose of opponents in ways that are generally frowned upon in a parliamentary democracy. Angela Merkel, by contrast, has outdone her model by winning her country’s highest ruling office not once but twice in general elections, most recently this Sunday. Her opponents appeared to conveniently self-destruct under her benign and distant gaze; and she now even has a new political consort in the form of the liberal Free Democrats (FDP), led by Guido Westerwelle. If this were a Shakespearean history play, its title would be”Angela the First, Part II.” Its topic, as in all royal dramas: Power, its Triumphs and its Pitfalls.

To gauge the epic possibilities of Part II, a synopsis of Part I is in order. Angela Merkel, an East German Protestant divorcée and leader of the center-right Christian Democrats (CDUs), became Germany’s first female Chancellor in 2005-after a campaign that she nearly lost because she spoke truth to the electorate about the need for drastic economic and social welfare reforms. Her honesty melted away a sizable lead in the polls; in the end, she scraped into victory over the Social Democrat (SPD) incumbent by exactly one percentage point. The inevitable consequence was a political marriage of convenience: a grand coalition with her erstwhile opponents of the SPD. It was plodding and unattractive, but, in fairness, it appeared to work. As grand coalitions tend to, however, it led to lowest common denominator policies and nourished the opposition. On election night this year, it became clear that the CDU’s embrace had also nearly drained the lifeblood out of the SPD. From the outset, Merkel had cannily moved her party into the center of the political stage, thereby squeezing the Social Democrats against the Left Party. But the SPD’s 11.2 percent drop to 23 percent of the vote, its worst result ever and the steepest drop between two elections ever, was a disaster beyond any pundit’s imagination.

September 27, 2009 will indeed go down in history as a night of negative records, with double-digit wins for all three opposition parties (the Liberals, the Greens, and the Left), the worst-ever results for the CDU’s Bavarian sister party CSU, as well as Germany’s lowest-ever voter turnout (70.8 percent, down 6.9 percentfrom 2008). It will also be remembered as the night in which Germans understood that the political landscape they had grown up with had changed irrevocably. Yet, what matters to Angela Merkel is that she has triumphed and can rule again, all this with the pro-business Liberals, the political partner of her hopes-even if, at 33.8 percent for the Christian Democrats and 14.6 percent for the Liberals, her mandate is slimmer than she might have wished. But she is helped-for now, at least-by the fact that her center-right coalition currently holds a slight majority in the Bundestag, the second chamber of the federal legislature, which has extensive co-decisionmaking powers and can cause massive gridlock when majorities in both chambers are not aligned. Wish fulfillment is, of course, the classic stuff of drama; and, sometimes, of tragedy.

Merkel’s second victory thus raises a fascinating question: Will she revert to her former liberal persuasions, and pursue genuine economic and social reforms? Might she even make German foreign policy more forceful and responsible? After all, this is a woman who in 1999 committed political patricide against her mentor, the conservative titan Helmut Kohl: a feat of daring which shocked all the other”grandsons” of the CDU into awed submission, and which laid open the route to power for her-first to the party leadership and, in 2005, the chancellorship. At a party convention in Leipzig in 2003, she held a flaming reform speech, and ran her first election campaign on the same uncompromising terms. As for foreign policy, in her first weeks as chancellor, she carefully reassured the European Union, East Europeans of Germany, and NATO, of her support and loyalty. Later, she had no reservations about telling off the Russian leadership (or the Americans, for that matter), or meeting with Russian nongovernmental organizations and the Dalai Lama. Angela Merkel, some observers hope, is a she-wolf who was forced, reluctantly, to pull on a sheepskin of political expediency when faced with the Social Democrats as partners in government for the next four years-and now can’t wait to throw it off.

The doubters of this theory point to the fact that Merkel opportunistically-some would say ruthlessly-dropped old allies before the 2005 election when it became clear that her reformist zeal might cost her the chancellorship. They note that in the last four years Merkel rarely fought back against her SPD partners, and ended up accepting proposals (like the minimum wage) that had to be anathema to her principles. She seems happiest, they add, when able to act as the moderator between conflicting positions-and least comfortable when she has to act decisively in the face of party or popular reluctance. For evidence, look no farther than the September incident where German troops bombed two fuel trucks highjacked by the Taliban in Kunduz, killing dozens of civilians. It led to a Bundestag debate-and Angela Merkel’s first government policy statement on Afghanistan in four years. Many, including those in positions of military leadership, wished that she had defended the mission this forcefully much earlier on in her tenure. Other evidence might be found in the fact that Merkel dithered through the first months of the economic crisis, sacrificed climate change goals to protectionist economic measures, left the shaping of energy policy (and with it, Russia policy) mostly to the”Big Four” energy companies. Even more oddly, after fostering an almost maternal bond with former U.S. President George W. Bush, she took what seemed like months to establish a good working relationship with U.S. President Barack Obama.

Merkel, who does few things without careful deliberation, laid out a broad trail of signs in her television appearances on election night. Wearing a bright red jacket, she emphasized her close relationship with the trade unions, and praised the achievements of the social welfare state. (She made it clear later that there would be no shifts on the health fund as well as the minimum wage, both opposed by the FDP). Guido Westerwelle, visibly elated by victory, nonetheless watched her carefully-and said nothing. Merkel, added-just in case anyone had missed the point-that she wished to be the chancellor of all Germans, with the CDU as the”great popular party of the middle.”

Enthralled viewers asked themselves whether this was an announcement that the chancellor intended to govern as a Social Democrat in her second term (noting that red is the color of the SPD), or a statement of reassurance to voters, akin to the dentist’s”this will just take a minute and it won’t hurt at all.” It is probably too soon to tell; then again, the economy may force the government to choose sooner than it wants. Germany has had its share of green shoots recently, including drops in the unemployment rate. But some of that has been due to protectionist measures like the”cash-for-clunkers” scheme, short-term work contracts (Kurzarbeit), or the Opel deal. The first has already run out, the second will run out soon, and it remains quite unclear whether salvaging Opel will work. Add massive overcapacities in the auto industry and sharp drops in manufacturing orders, and it becomes obvious that Germany’s new government might well find itself faced with an economic crisis again-and with it, the necessity for difficult choices. Its options, however, are limited: Germany’s currency is European; there is a constitutional ceiling for the national debt; and as for the last remedy, raising taxes, both the Christian Democrats and the Liberals promised in the election campaign to do the opposite. Moreover, the window of opportunity for painful choices is narrow. Next May, the populous mining and industrial state of North-Rhine-Westphalia will hold elections. If the incumbent governor, Christian Democrat Järgen Rättgers loses, Merkel and Westerwelle will no longer have the majority in the second chamber of the federal legislature-meaning that whatever they do before May, they must do with a velvet hand.

“Angela I., Part II” will see a ruler who dislikes making hard choices having to do just that-if not on the economy, a multitude of other issues await, Afghanistan not the least among them. The curtain has just risen.

German voters made a clear decision in their federal election last Sunday. As expected, Chancellor Angela Merkel can stay in office with her conservative Christian Democratic Union (CDU), by far the strongest party with 33.8 percent of the vote, which is even less than the already disappointing result of the last election (35.4 percent)-a rather unglamorous victory. Her queen-maker, future coalition partner, and real winner of the election was Guido Westerwelle, the probable future foreign minister, with his liberal, business-oriented Free Democratic Party (FDP) (14.6 percent).

The disastrous result for Germany’s Social Democrats (SPD) with 23 percent, an all time low since 1949, has plunged a party with a great 146-year history into an existential crisis about its future. These figures, including the new records for the two smaller opposition parties, the Greens (10.7 percent) and the Left Party (11.9 percent), with the lowest election participation in Germany ever, reflect the profound discontent of the German electorate with the former grand coalition of the CDU and SPD. The business wing of the CDU and its traditionalist voters, disaffected with Merkel’s SPD-driven bail-out policy for banks and companies in trouble, and with her purely pragmatic cooperation with the SPD on almost every policy issue, moved to the FDP. Many core voters of the SPD, in contrast, frustrated by the Realpolitik of the party’s leadership in government, shifted to the Left, or didn’t vote at all.

German voters like continuity and, if there has to be change, they prefer it in incremental slices. Thus, the policy of the new government will differ from the former one only in nuances, and domestic policy issues like health care, tax reform, and nuclear policy will be at the forefront; there will be far less disagreement on foreign policy. As the German free market economy model in its original concept always included a strong commitment to social welfare policies, there will be, even with the FDP in government, only a slight shift in the balance between a free market economic policy and a state-oriented social policy.

Governing will become much more difficult for Merkel-that is the main difference. There will be fierce policy debates about social subsidies and tax cuts between an opposition that is much larger than before (the Greens, an SPD torn between its realist and its left wing, and the Left Party) and, in their view, a neoliberal CDU-FDP government. In the four years of grand coalition government, the chancellor was able to kill any dispute by pointing out that it was likely to endanger the survival of the coalition. This had the added benefit of making her look maternal and above the fray. But these times are over. Merkel now has to show which policy she really stands for-the market economy-oriented policy that she campaigned for in 2005 or the social policy of the Social Democrats that she accepted broadly later. Simply put, she has no other choice than to step into the role of chancellor and to lead. That is what her party-and the public-now expects of her.

The numbers below are still approximate, because the final count may not be published until Monday. Nevertheless, the following is already clear:

• The liberal Free Democrats (FDP) are the triumphant winners of the election €“ at 14.6-14.7 %, their best result since 1949 (but not as good as they’d hoped when they were polling up to 16%). In 2005, they’d achieved only 9.8%. Guido Westerwelle, leader of the Liberal party, looks set to become Germany’s first liberal foreign minister since Hans-Dietrich Genscher (foreign minister from 1974 to 1992). The Liberal group in the Federal legislature will be double the size of the group of the CSU, the Christian Democrats’ Bavarian sister party. They should be able to claim at least three ministries in all
• The center-left Social Democrats suffer a dramatic upset €“ at 23.3%, worse even than the polls had predicted. This is their worst outcome since 1949; the second-worst being 28.8% in 1953 €“ no party has suffered such a drastic loss from one election to the next in the history of the Federal Republic. Of the 6 million votes they lost, 50% went to CDU, Left Party and Greens; the other 50% did not vote at all. What this means is that the SPD’s declared strategy of mobilizing the undecideds was a complete failure €“ despite an energetic and relaxed performance by top candidate Frank Walter Steinmeier in the one televised debate between him and Merkel. Steinmeier has acknowledged his defeat and announced that he will become leader of the opposition
• The center-right CDU scrapes through, but barely: Angela Merkel will remain Chancellor. At 33.6%, however, the Conservatives have lost a point compared to 2005; the only time they did worse was in 1949, at 31%. All this despite Angela Merkel’s undiminished personal popularity ratings €“ possibly a consequence of her moving the CDU to the middle of the political landscape, and therewith forgoing a more sharply-etched conservative agenda
• The CSU got its second worst election result since 1949 with 41% (down from absolute majorities in Bavaria until only a few years ago)
• In historical terms, this means that the Volksparteien, or popular parties, continue on their downward trend:
• The other winners of the election are the Greens and the Left Party, both for the first time with double-digit results at 10.2-10.5% (from 8.1% in 2005) for the Greens and 12.2-12.9% (from 8.7% in 2005) for the Left Party.
• The Left Party, from a beginning as a motley grouping of East German post-Communists, disgruntled Social Democrats and paleolithic West German ultra-leftists, and a political impact focused mainly on the states of the former East Germany, establishes itself as a political force to be reckoned with in German national politics €“ not yet as a coalition partner, but certainly as a potential spoiler
• The current grand coalition of CDU and SPD is at an end, as the CDU and the FDP have a safe, but weak governing majority of 48.2% without overhang mandates (for a definition, see Saturday’s blog). This means that threats from the left of the political aisle to challenge the legitimacy of the government based on a German supreme court calling for an overhaul of the German voting system are without foundation. It may take until the late evening until the exact number of overhang mandates is clear, but pundits are predicting there will be at least 16
• The SPD could not have formed a governing majority with the Greens and the Left Party even if it had not categorically excluded a national coalition with the Left Party
• Distribution of the 609 seats in the Bundestag (again, without the overhang mandates):
  • CDU: 231
  • SPD: 147
  • FDP: 92
  • Left: 77
  • Greens: 62
  • Majority needed to form a government: 305
  • CDU+FDP: 323
• Voter participation rates also scored a negative record at 72.5% €“ 5% less than in 2005. The main reason, analysts are saying, is the 2 million SPD voters stayed at home
• No right-wing parties managed to pass the 5% threshold for entry into the federal legislature (there were about two dozen “other” parties, who polled at about 6% in total)
• And, in the biggest surprise of all: the surveys turned out to be more or less accurate!

What does all this mean for the future of Germany’s policies, and its political landscape? Three things: a generational shift in the political leadership; fragmentation; and a re-polarization of politics. Watch this space €¦

It’s 5 pm in Germany, one hour before the polling stations close, and the first projections are published. Throughout the country, it’s been a day of radiant sun and blue skies €“ the kind of day that Germans prefer to spend hiking in the mountains, or grilling at a lake, rather than waiting in lines outside of polling booths? A 6 percent drop in voter participation would seem to indicate that Germans may indeed just have opted out of voting in this election. Then again, there are reports that an exceptional number of Germans have voted ahead of time by making use of a provision that allows them to send their ballot in the mail. It may take until well into Monday or even Tuesday until all the ballots are counted. Numbers to watch for:

In 2005, the center-right CDU got 35.2%, the center-left SPD 34.2 %, the liberal FDP 9.8 %, the Greens 8.1%, the Left Party 8.7%, and “others” (about two dozen small parties, most or none of whom will make it past the 5% threshold provision to get into the legislature) at 5 %.

• CDU: The Christian Democrats’ lead has narrowed from around 36 to 33 percent; if it does worse than its 35.2 % in 2005, this will weaken Merkel’s position not just in coalition negotiations, but in her own party; to govern with its preferred coalition partner, the business-friendly FDP, the two parties need at least 46-47% percent
• FDP: the FDP too had first nearly doubled its 2005 result to up to 16% in the polls, and now finds itself back near 14%
• SPD: the Social Democrats have been trending at 25% in the polls €“ if they don’t manage to catch up dramatically in the race to the finish, that would be their worst result since 1949, and the end of the current leadership’s political career
• Left Party: the Left Party, created in 1990, has moved since them from 2.4% to 4.0% in 2002 and 8.7 % in 2005 €“ can it break through the 10% ceiling? If so, the debate about SPD-Left coalitions on the national level will intensify
• Greens: will the Greens drop back into political insignificance below the 10% threshold?
• Large vs. small parties: will the three small opposition parties €“ Liberals, Greens and Left €“ take votes from the two “popular parties” CDU and SPD, who have seen their joint polls drop from nearly 90 decades ago to their worst joint showing ever in 2005, at 69.2
• Voter participation: the 2005 participation rate was the worst ever, at 77.7% – will this year’s result be even worse

Next: election analysis; potential models and their implication for the course of German politics

 Gosh, the German election this Sunday has become exciting after all. Three reasons: the race has become too close to call; it has become clear that the next Chancellor will have overwhelming problems to deal with; and Germany may be on the verge of a seismic shift in its political landscape. This blog will look at the first of those reasons: the survey numbers, and the potential coalition models resulting from it.

Surveys: Less than twenty-four hours before the election, surveys show the race is too close to call. The most recent one, from Forsa, has the center-right CDU at 33%, the center-left SPD at 25%, the liberal FDP at 14%, the Left Party at 12%, the Greens at 10%, and “others” (about two dozen small parties” at 6%; two days earlier, Allensbach had the CDU at 35%, the SPD at 24%, the FDP at 13.5%, the Left Party at 1.5%, the Greens at 11%, and “others” (about two dozen fringe parties) at 5%.

Coalition models: That means Chancellor Angela Merkel seems likely to retain her job €“ but she may well wish she hadn’t. For the political composition of her government is completely uncertain. Given the 5-6% vote for fringe parties, she will need 46-47% of the vote to form a government. Numerically, that would allow a number of 2- and 3-way coalitions: CDU-FDP (“black-yellow”), CDU-SPD (“black-red” or grand coalition), CDU-FDP-Greens (“Jamaica”), SPD-FDP-Greens (“traffic light”), and SPD-Left Party-Greens (Red-dark red-green).

Some of these have been excluded categorically: The Green leadership has nixed a three-way coalition with the Liberals (although some of them would love to be in a solo relationship with the CDU, like in the city-state of Hamburg). The SPD has pledged not to ally itself with the Left Party (this despite the fact that it has already done so in Berlin and is preparing to do so in two other states); but it would happily engage in a “traffic light” coalition. The Liberals, meanwhile, have been repeating like a mantra that the only partner they are willing to work with is the CDU. As their poll ratings dropped from a healthy 16 to 13-14%, that pledge acquired a note of desperation (not to mention some disturbing undertones): at a rally last week, a hoarse Guido Westerwelle, the Liberals’ chief candidate, said he was prepared to swear his oath of sole allegiance to the CDU “in blood on a freshly painted wall”, while his party chief Dirk Niebel, a beefy former paratrooper, said he was willing to “etch it into his skin”. Dear, dear.

What that means (apart from the fact that some of the campaigners could use some chamomile tea, a hot water bottle and time out) is that €“ unless the actual vote tempts one or more of the parties to break their pledges €“, there are two main options: the CDU-FDP model preferred by Merkel (just 47% in the Forsa survey), or a re-run of the unloved grand coalition (58%).  Beware: it doesn’t end there.

The electoral system and “overhang mandates”:  Thank God we’ve got the Economist to explain our voting system to us. In Germany’s complicated system of “personalized proportional representation”, the magazine’s September 26 edition  writes:

 “people in each state have two votes. With the first they choose representatives in some 299 geographical districts €¦. But it is the second vote – for a party, not a person – that is more important. It allocates the rest of the seats to candidates drawn from party lists, topping up the totals to make them match the parties’ shares of second votes. ( €¦) Under this system the Bundestag is meant both to link voters to a local representative and to reflect their overall political preferences. The reality is messier.”  

That, alas, is putting it mildly €“ because this is where the Ãœberhangmandate come in. In a panel discussion organized jointly last Thursday in Berlin by the American Council on Germany and the German Marshall Fund, the New Yorker’s Hendrik Hertzberg made the delightful suggestion that this might be translated as “letting it all hang out”. We wish €“ but German elections are not about having fun. After all, this isn’t the 2006 World Cup. For explanations, we turn to the Economist again:

“If a party wins more districts in a state than the number of seats it ought to get according to its share of second votes, it keeps these “overhang seats”. ( €¦) The constitutional court has demanded changes to this part of the electoral law by 2011. But this weekend, the CDU could win as many as 20 overhang seats, which might be enough to tip the balance away from a renewed grand coalition and towards a CDU-FDP coalition.”

(Actually, the Economist is being characteristically understated. The mathematics and potential scenarios for the overhang seat phenomenon are even more complicated. Election masochists are referred to Wikipedia or €“ for ultra-masochists who like their explanations in German €“ the website of the federal agency for political information, the Bundeszentrale fär Politische Bildung. It does have a nice little animated video to make it all more palatable.)

It will come as no surprise that Angela Merkel feels these would not be “second-class seats”, while Social Democrats and Greens have been uttering full-throated warnings about “unconstitutional majorities”.

Confused? The Germans certainly are. What with close polls and the possibility of overhang seats, it appears unlikely that Sunday’s vote will even produce a result by midnight.

In fact, Germany might see a re-run of 2005, when the results were so ambiguous that coalition negotiations stretched well into November. That would mean that the current government would have to stay on as a caretaker to take care of pressing issues, such as the evolving Opel crisis, the Irish referendum on the Lisbon Treaty (October 2^nd), and the climate summit in Copenhagen (mid-December).

Then again, the polls could be wrong. In 2005, surveys almost unanimously predicted a solid black-yellow majority. Instead, the two popular parties, or Volksparteien, the CDU and SPD, ended up at 35.2 and 34.2 €“ merely one percentage point apart, and with their worst joint showing since 1949. This time around, a fifth of those polled have said they’re still undecided.

So, come election night, we may all be reaching for the chamomile tea and the hot-water bottle.

Next: what the potential coalition models mean for the future of German politics.

BERLIN — As Germany heads for federal elections this Sunday, President Obama’s decision to cancel plans for a land-based missile defense program in Poland and the Czech Republic met with unanimous applause, not just from Chancellor Angela Merkel and her challenger, Foreign Minister Frank Walter Steinmeier, but in fact across all the parties. It was with good reason, and a fair degree of ignorance about its consequences for Germany and Europe.

Even in the United States, there had always been doubts about the technical feasibility of the program and the seriousness of the threat by Iran’s nuclear missiles. Ten conventionally-armed interceptor missiles in Poland and a radar in the Czech Republic were never going to be a threat to Russia’s strategic nuclear deterrent €“ or, conversely, the sole guarantor of both countries’ military security. It was the symbolism that mattered: the presence of American soldiers made the West’s defense commitment much more visible and credible than the mere fact of NATO membership could have done. But there are other ways for the U.S. and Europe to build up Polish and Czech confidence.

Unlike George W. Bush’s missile defense program, which sold   a weak concept as a strong response, the Obama Administration’s policy U-turn kills two birds with one shot. With regard to Russia, the new plan underlines the United States’ seriousness about its new disarmament initiative and increases political pressure on Russia. With regard to Iran, the U.S. demonstrates its willingness to negotiate. Now it is up to Russia to demonstrate its own readiness for disarmament €“ and it will be possible to measure that willingness   by the extent to which it supports U.S. policy toward Iran. Russia’s recent willingness to support more severe sanctions against Iran would seem to indicate that the leadership in Moscow has understood that this is a chance to cooperate that the United States will not offer again soon. Iran is a top priority for President Obama’s foreign policy. This policy U-turn builds up enormous political capital for the U.S. globally; it also increases political pressure not just on Russia and Iran but also on Europe.

What does all this mean for Germany? We may assume that the White House will present its wish list to the new German government very soon after the elections this weekend. Germany and Europe will be asked to take much more responsibility for Eastern European security, as part of sharing the burden   of the new disarmament policy. The United States’ new stance makes it much more difficult for Germany, France, the Netherlands and others to reject U.S. wishes if the Europeans want to appear to undermine Obama’s disarmament agenda. But that’s not something German politicians like to think about during an election campaign.

It was  a Man Bites Dog moment: One of the tropes of the German debate on Afghanistan has been the notion that the”moment of truth” for our so-called”stabilization mission” in northern Afghanistan would come in the form of a massive Taliban attack on Bundeswehr troops. That moment has come in  the one  form imagined by no-one: a massive German preemptive attack on the Taliban.  A September Surprise, indeed.

The following Oped on the subject  appeared in the Financial Times on September 9, 2009.

Germany shoots first and thinks again

By Constanze Stelzenmäller

Published: September 9 2009

The night a German army colonel by the name of Georg Klein called in a massive Nato airstrike on two fuel trucks hijacked by Taliban fighters in northern Afghanistan was a watershed moment. Although the exact number of casualties is still unknown €“ estimates suggest more than 50 died €“ it seems likely that it will prove to have been, as one American newspaper put it, “the most deadly operation involving German forces since World War II”. But will we also remember it as the night Germany grew up and started to call a war a war?

Given the international brouhaha that ensued, it is worth pausing to note that it remains far from clear whether last Friday’s incident in Kunduz will go down in history as tactical ineptitude or tragedy. The danger was real: fuel trucks are popular low-tech mobile bombs throughout the region. Was it imminent? The trucks were stuck in a river, at night; but news reports say that the Taliban hijackers had already corralled villagers to help pull them out. Quite possibly, Col Klein chose what appeared as the lesser of two evils on the basis of imperfect information: the classic dilemma of military leadership.

Then again, why did the Germans take so long afterwards to investigate, talk to locals and acknowledge civilian deaths? Why did they not choose a lower-impact option, such as repeated overflights followed by a sortie of ground troops? Was this a decision not to risk the lives of German soldiers, or was it an implicit recognition that the contingent lacked the capabilities to go out and win decisively? Was the Germans’ will or strength sapped by the intensity of combat in the preceding weeks and months?

Hard questions, indeed. One thing only seems certain: definite answers will not be forthcoming before the German elections on September 27.

All the more surprising, then, that a roster of international experts €“ from General Stanley McChrystal, the American commander of the Nato forces in Afghanistan, to Javier Solana, the European Union’s foreign policy chief €“ felt called upon to pass judgment swiftly, severely and publicly on the lonely decision made by Col Klein. Of course, the cause of clarity was not served either by the hapless German defence minister, Franz Josef Jung, who had to apologise for the civilian deaths he had previously flatly denied.

Yet while it may not be possible for a while to accurately evaluate the events in Kunduz, reactions to the bombing throw a stark light on German attitudes to the use of force as much as on the state of the western alliance. The German position is not without irony. In 2002, references to pre-emption in the most recent iteration of the US National Security Strategy were excoriated in Germany as undermining deterrence. Yet Col Klein’s decision to attack before the Taliban could do so was a classic act of pre-emption. Afghan leaders, meanwhile, grumble that the Germans’ current difficulties stem from an unwillingness to show strength early €“ in other words, a failure of deterrence.

Moreover, in bombing the trucks (and, according to Nato, killing civilians), the Germans did exactly what they kept lecturing the Americans to stop doing, while the Americans are now lecturing us for doing what they used to do, but are no longer doing, at least in part because of our lecturing. This (once you figure it out) would seem to undermine one of Germany’s cherished ideas about itself: that, whatever the state of its military, it is at all times morally a superpower.

The Kunduz incident buried two other German myths: the conviction that bad things do not happen to us because we are the good guys; and the idea that we are conducting a stabilisation operation. The first was finished off by the Taliban’s northern spring offensive; the second by Chancellor Angela Merkel, who referred to the engagement as a “combat mission” in the Bundestag on Tuesday.

The Bundestag debate provided an instructive snapshot of German attitudes to the Afghan mission. Ms Merkel, for the Christian Democrats, reiterated Germany’s commitment, regretted the civilian deaths and chastised the critics: unequivocal and uninspiring. Her challenger, Frank-Walter Steinmeier of the Social Democratic party, labelled calls for a pullout irresponsible €“ an admirably clear message of rejection to all those in his party clamouring to make common cause with the Left party.

Yet it was Järgen Trittin, the Greens’ top foreign policy expert, who ruthlessly made the points that both Ms Merkel and Mr Steinmeier avoided. Gen McChrystal, he said, had investigated as the German military dithered; and the Berlin government had been muddling through, avoiding debate at all costs.

It is too early to gauge whether Germany’s moment of truth in Kunduz will finally give the Left party the traction that has so far eluded it on the national level and fuel a debate over withdrawal. The Left party is so divided that it has not even been able to draw up an election manifesto. But polls show a majority of the German public to be deeply sceptical of involvement in Afghanistan, as are significant groups in all the parties. The Left party’s spoiler potential, at least, should not be underrated. The current mandate for the Bundeswehr’s 4,500-troop Afghan commitment is up for renewal in December.

All this comes at a difficult moment for the alliance and for Afghanistan. Amid allegations of massive fraud in August’s Afghan election, the Obama administration is faced with grim assessments by its generals, a stretched army, a reluctant public and even more reluctant allies. One lesson of the Kunduz incident is that an alliance, besides troops and hardware, also depends on intangible assets: resilience, mutual trust and loyalty.

The writer is a senior transatlantic fellow with the German Marshall Fund in Berlin

The Kunduz Incident also put an end to the unwritten consensus among the German parties that the Afghan mission was to be kept out of the election campaign. There is now a fullblown pullout debate – but with some very odd role reversals. The Social Democrats’ candidate Frank Walter Steinmeier responsibly refused to  discuss  dates for an exit during the Bundestag debate following the incident,   but has since called for a pullout timeline. Meanwhile, the Left Party, for whom this issue ought to have been a much-needed shot in the arm,  is  strenuously making  statesmanlike noises – several senior figures have been telling the media that a pullout”won’t happen overnight”. Coalition partners, anyone?

To be continued.