EU country briefing: Germany

The following article is a part of a series of brief country profiles for the EU-27 ahead of the European elections in May.

Containing Germany has been the European project’s main raison d’être since its creation. This was symbolised by the fact that cooperation started with the European Coal and Steel Community (ECSC) in 1950, primarily aimed at avoiding another European war.

Together with France, Germany has always played a pivotal role in the process of European integration. It has long been reluctant to take the lead in Europe, but the continent’s recent challenges and crises have forced Germany to (slowly) adopt a more assertive role.

With over 82.5 million people, it is the EU’s most populous member state. Post-Brexit, its population could represent 18.5% of the EU total. The country also sends most Members of European Parliament (MEPs): 96 in this year’s elections, 13.6% of the total expected 705 MEPs.

Germany remains one of the most supportive countries of the EU: 81% of Germans consider the European project as a positive thing, with just 5% opposed to it. This is the third highest support rate in the EU and far ahead of the EU average (62/11).

The same applies to its Euro currency membership which is supported by 81% of Germans. Moreover, 86% feel they are citizens of the EU.

Economy

Germany remains the undisputed economic powerhouse of the EU, with a total GDP of almost €3,3 trillion in 2017, eclipsing France (€2,3 trillion) and representing more than a quarter of the EU27 total GDP (without UK).

While Germany’s real GDP per capita used to be below France’s, it has pulled ahead at €35,500 in 2017. It’s also far above the EU28 average (€27,700). Its GDP per capita in purchasing power standards stood at 124% of the EU28 average in 2017 versus France’s 104%.

The country has also experienced steady economic growth over the past years, averaging 1.9% between 2014-2018, slightly below the EU’s 2.1% average.

Nonetheless, the country’s demographics and domestic under-investment are mentioned by the IMF as structural factors that could impede economic progress.

In addition, global uncertainty, limited labour supply and reliance on export are mentioned as economic risks by the European Commission.

Moreover, significant regional economic differences remain, especially between the Western part of the country on the one hand, and the former socialist East on the other hand.

Economic growth is expected to slow to 1.1% in 2019 (below the 1.5% EU average). Much depends on whether US President Donald Trump will decide to impose tariffs on EU car exports, given the size and importance of Germany’s automotive sector.

The significance of Germany’s labour shortage becomes clear when looking at the country’sunemployment rate, which was as low as 3.4% in 2018 and is expected to drop even further to 3% by 2020. These are half the EU28 averages of 7% (2018) and 6.3% (2020).

However, most notable is the youth unemployment rate in Germany, which is the lowest with 6.2% in 2018, partly as a result of its system of dual education and apprenticeships.

While poverty has been declining in recent years, inequality is increasing. Germany’s low unemployment rate also conceals the fact that wages and real incomes have remained stagnant for two decades, and more than 1/5 of Germans work in the growing low-wage sector.

Political context and direction

Germany is a federal state comprised of 16 constituent states. The German President has limited power in everyday-politics and plays a largely ceremonial role.

The government is headed by the Chancellor, currently Angela Merkel, who is elected by the Bundestag, the German parliament. Germany’s constitution, the Grundgesetz, was established in May 1949 and celebrates its 70’s anniversary just a few days before the European election.

Traditionally, one of the main parties is the conservative Union (CDU/CSU), composed of the Christian Democratic Union (CDU) and the Bavarian Christian Social Union (CSU), which is considered as the CDU’s more conservative sister party.

The other main party is the Social Democratic Party (SPD). The country’s third political force has historically been the Liberal Democratic Party (FDP), which served mostly as king-maker.

Due to its five percent electoral threshold (Fünfprozenthürde), new and small parties rarely gain a foothold in the Bundestag, which has made the political landscape comparatively stable in the past decades.

The first challenge to this stability came with the Green Party, founded in 1980 amidst increasing environmental concerns and opposition to nuclear energy. They first entered the Bundestag in the 1983 federal elections and have since become a mainstay of German politics.

Since then, Germany’s reunification and growing dissatisfaction with established parties have created further fertile soil for new parties. The veteran SPD party, for example, has steadily lost support since it enacted welfare system and labour market reforms in 2002, when governing in a coalition with the Greens between 1998-2005.

Through the so-called Agenda 2010 reforms, labour costs were restrained to create more employment. However, these reforms were criticised for increasing economic inequality and precarisation of the German working class, the SPD’s main constituency.

This prompted prominent politicians to leave the party and helped create a new socialist party called The Left (Die Linke). The CDU/CSU benefited from the Lefts’ fragmentation and has been the dominant political party since the 2005 federal elections when Angela Merkel became chancellor.

Merkel has held the chancellorship while changing coalitions with both the FDP (2009-2013) and SPD (2005-2009; 2013-) and has proven herself a capable and cunning leader.

She managed to stop the political surge of the Greens in the polls after the 2011 Fukushima disaster in Japan by reverting her previous policies by announcing an energy transition and phasing out the use of nuclear energy.

In 2012, she once again went against the long-established consensus in her own party and co-opted yet another main issue of the left – the minimum wage.

Moreover, public opinion rated her as level-headed politician during the Eurozone crisis, as well as a calm leader amidst Russia’s aggression against Ukraine.

She famously keeps her cards close to her chest and refrains from engaging in controversial issues – such as gay marriage – unless forced to do so.

However, during the European migrant crisis of 2015 – when hundreds of thousands of refugees entered the EU, member states struggled to cope with the influx, and a humanitarian crisis seemedimminent – Merkel took a for her unusually strong stance.

Rather than closing the border with Austria, she allowed refugees to cross the border(s) and seek asylum in Germany. After initially receiving widespread support, public opinion soon shifted and gave way to mass protests against immigration and an alleged Islamisation of the country.

The issue has polarised the country since. It also fuelled support for the right-wing populist Alternative for Germany (AfD) – originally founded as an anti-Euro party – that increasingly branded itself as the only party opposing open borders, multiculturalism and EU integration.

Despite internal party struggles that moved the party further to the right, the AfD grew steadily and entered the Bundestag in the 2017 federal election, receiving 13% of the vote. It was the first time since 1957 that a right-wing nationalist party entered the German parliament.

The current Bundestag features an unprecedented number of seven parties which made the formation of a new government difficult. Coalition talks between CDU, FDP, and the Greens failed after weeks of negotiations.

To avoid re-elections the SPD reluctantly agreed to join the CDU in yet another grand coalition. However, the social democrats remain heavily divided on its policy course and leadership and are losing voter support at the expense of the Greens.

Meanwhile, internal party struggles in the CDU/CSU forced Merkel to give up party leadership after 18 years and not seek re-election as chancellor. A subsequent CDU party leadership election was won by a knife-edge by Merkel’s handpicked successor: Annegret Kramp-Karrenbauer (AKK), a centrist politician very similar to her.

However, despite a short rebound in popularity for the CDU/CSU as a result, it has since struggled to regain its former glory. Attempts by “AKK” to distance herself from Merkel and announced stricter migration policies have not turned the tides so far.

Although the CDU and SPD as co-called Volksparteien [peoples parties] dominated German politics and traditionally received over 80% of the votes, their status has since declined drastically.

Recent polls suggest that they would not even receive a combined voting share of 50%, illustrating the further fragmentation of the German political landscape.

In contrast, the Greens have gained in the polls since the 2017 federal election and are currentlyprofiting from the “Fridays for Future”-movement against climate change. Meanwhile, the AfD continues to enjoy stable support of over 10% in the polls.

Predictions

Generally, the German public tends to show little interest in European election.

However, as they coincide with the state election in the northern state of Bremen and communal elections in seven states, there are predictions that this could favour a slightly higher turnout.

According to recent polls, the CDU/CSU would win around 30% of the vote. This would result in 28-29 seats for the European People’s Party (EPP). The party has been in a steady but slow downward trend since earlier polls predicted 33.5% (33 seats).

The once proud SPD currently polls at only 16%, resulting in 15-16 seats for the Progressive Alliance of Socialists and Democrats (S&D).

Adding insult to injury, recent polls indicate the Greens will end second. The Greens currently stand at around 19% which would translate to 18-19 seats for the Greens–European Free Alliance (Greens–EFA).

Large parts of the AfD outright reject the EU and demand Germany’s exit from the bloc. Brexit, however, is convincing ever more Germans their country is better off within the Union.

Due to this, the AfD still calls for a “Dexit”, but, only if the EU fails to enact necessary reforms and only after a nation-wide referendum on the issue. The party is predicted to win around 10% of the votes resulting in 10 parliamentary seats which would go either to Europe of Freedom and Direct Democracy (EFDD), the AfD’s current home, or a yet to be formed new nationalist group.

The FDP and the Left are currently polling at approximately 6% resulting in 6 seats each for the Alliance of Liberals and Democrats for Europe Party (ALDE) and the European United Left–Nordic Green Left (GUE/NGL).

Since 2014, the EP election does not feature an electoral threshold in Germany, giving smaller parties a viable chance to enter the European Parliament.

Polls show the Free Voters party gaining two seats for the ALDE group while the satirical “The PARTY” will likely defend its non-attached seat.

Likewise, the Pirate Party is en route to defend its mandate which would add another seat to the Greens–EFA. However, Julia Reda—the party’s sole representative in the European Parliament will not run for re-election— and has recently called on voters to not vote for the European Pirate Partydue to allegations of sexual misconduct against one of its candidates.

Stephan Ritscher is a PhD student at the University of Aberdeen. His research focuses on radical democracy, populism, and globalization and is part of the Marie Skłodowska-Curie POLITICO project at the Centre for Citizenship, Civil Society, and Rule of Law (CISRUL).

Robert Steenland works as an evaluation and research consultant in EU policies, as well as an analyst in EU politics. He holds a double degree master in European Governance.

Christoph Sebald works as an EU-Project Manager at the Ruhr Regional Association, as well as a guest lecturer on EU-Multilevel Governance at the Ruhr-Universität Bochum. He holds a double degree master in European Governance.

Daniel Matthews-Ferrero is a Marie Curie PhD researcher in the POLITICO programme at the University of Aberdeen, focusing on contemporary Western European populism. He holds a Master’s degree in European Interdisciplinary Studies from the College of Europe.

Source: Euractiv.com

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