Germany: Coalition talks for new government with old faces and reactionary programme

Leading representatives of Christian Democrats and Social Democrats in Germany have started serious talks with the aim of forming a coalition government by mid-November. The first thing they clarified immediately was the composition of the cabinet and the future distribution of ministerial portfolios. Now the chief negotiators are in the process of elaborating the coalition’s programme.

Although nothing has been finally decided upon, you do not require a lot of imagination to understand that working people, unemployed, pensioners and youth are going to be faced with a new round of unprecedented attacks, cuts in public spending and a new wave of privatisations.

What we have to understand is that the classical bourgeois parties (CDU/CSU, Christian Democrats, and FDP, Liberals) once again failed to win a majority of their own in the early elections held on September 18. There were some 21 million votes cast for the bourgeois block as against the 24 million votes cast for the “left of centre block” – i.e. Social Democrats (SPD), Greens and Left Party.

In reality a majority voted for those parties that distanced themselves from “neo-liberalism” as put forward by CDU/CSU leader Angela Merkel. For a short period of a few days, the SPD leaders went on to emphasise that there was a left majority in the country and that Merkel should not be the chancellor at all. But this was quickly exposed as mere talk, since the SPD leadership did not even want to talk to the representatives of the Left Party and took the decision to enter a grand coalition under Merkel’s chancellorship.

Gerhard Schröder, who was Chancellor for seven years up to the recent elections, will be reduced to the role of backbencher and will probably leave the political scene before long. However, before quitting office he will do his utmost to get the delegates to the mid-November SPD congress to accept the coalition’s programme.

The new coalition government will be composed of eight representatives from both sides. While some of the SPD ministers embody a continuation of Schröder’s Blairite “reform” policy named “Agenda 2010”, the new Social Democratic Finance Minister, Peer Steinbrück is also known as a ruthless and hard-nosed politician who will not shirk from coming into conflict with the unions and will spare no pains to overcome the huge budget deficit accumulated over the past years and get the state debt back within the Maastricht criteria which Germany had infringed in recent years. Steinbrück has already demanded privatisation of Germany’s motorway (Autobahn) network.

On the other hand, we some of the new Christian Democratic ministers who have shown where they stand when they introduced reactionary legislation in those state governments where they have been in charge of things such as hospital privatisations and the introduction of tuition fees. There are also two of the future ministers – the gentlemen in charge of the Interior and Defence – who do not have clean personal records in terms of corruption. Only five years ago both of them had to resign from public positions in the context of investigations and exposures arising from the Kohl corruption scandal (See our article Corruption scandal shakes Germany's Christian Democrats).

While Social Democratic leaders are arguing that by forming a block with the Christian Democrats they have stopped the worst anti-union Liberal hardliners from taking office and carrying out their programme, right wing CDU/CSU leaders have announced that there will be plenty of “blood, sweat and tears” and “much wailing and gnashing of teeth” on the road to a “rehabilitation of public finances“.

Yet whereas huge tax reductions for the rich in recent years have enormously aggravated the budget deficit and moneylenders have received the staggering amount of 40 billion Euros in interest payments from the Federal budget alone, this “Grand Coalition” is likely to introduce a VAT increase, an increase of the statutory retirement age up to 67 years, and a host of painful budgetary cuts on almost all fronts affecting the mass of the population.

Wolfgang Clement, the resigning SPD Minister for the Economy and Labour, has just started another propaganda campaign against the so-called “abuse” of unemployment benefits by people “who are not really in need” and behave “like parasites”. This is a harbinger of further attacks on the poorest of the poor. Clement was a major architect of “Agenda 2010” and the infamous “Hartz” laws that reduced the incomes of long term unemployed people to a level just sufficient to eke out a miserable existence.

While the German bosses and their employers’ associations would have preferred a coalition government of the CDU/CSU and FDP, they will be on good terms with this incoming grand coalition. One of their spokesmen, Dieter Hundt, has already sketched out what his class would like to get – the usual neo-liberal agenda our readers will be familiar with around the world.

Already, Hundt’s proposal on the age of retirement seems to have fallen on fertile ground. He may not get everything he wants immediately, but the government will take up his proposals bit by bit, arguing that “we have to return to balanced budgets”, “we must kick-start the economy”, “we must reduce non-wage labour costs” and “make Germany more attractive for international investors”.

In this context, the Social Democrats will do their utmost to explain to the unions why all these “reforms” are necessary, but at the same time the alienation between the party and union apparatus – that was already there under Schröder ‑ will undoubtedly grow. If the SPD leaders accept a VAT increase and other attacks that they had rejected during the election campaign only a few weeks ago, this will cause a lot of frustration and anger among trade unionists and many others who had decided to vote for the SPD at the last minute in September to stave off a turn to the right under Merkel.

A “comfortable” majority but with inner contradictions

Numerically, the incoming grand coalition under future chancellor Angela Merkel and deputy chancellor Franz Müntefering (who is also the SPD chairman) will have a “comfortable” majority made up of 448 MPs out of the total of 614 seats in the Bundestag (parliament). This is well above the two-thirds majority of seats required to change the constitution. There are grand coalitions already governing four of the sixteen federal states that make up Germany.

Most of the mainstream media and ruling class representatives will be sympathetic to this “courageous” government. But at the same time there are already rumblings within both camps that are forming this coalition. “There is not much room for manoeuvre for Mrs. Merkel”, stated the renowned bourgeois daily, Frankfurter Allgemeine”, on October 17.

Rank and file members on both sides are unhappy with the bad results of their parties in the September elections and would like to discuss the implications. Yet the leaders are at present rejecting these demands, arguing, “we should form the government first”.

While right wing Christian democratic hardliners have been voicing their dissatisfaction with even the minor concessions made so far to the SPD in the coalition talks and are demanding an even more ruthless neoliberalism, the (tame and docile) left SPD MPs are beginning to realise that hard times lie ahead and that the policies of this grand coalition may well strengthen the Left Party that won 54 seats in the Bundestag.

The SPD lefts and a group of younger MPs want their representative Andrea Nahles to become general secretary of the party and thus form a kind of counterweight to the pro-government wing. The party leader, Müntefering, however, has emphatically rejected this. Thus there will be a crucial vote at the coming party conference in mid-November between Nahles and the official candidate of the apparatus, Kajo Wasserhövel.

In such circumstances, it is likely that more disenchanted SPD members may leave the SPD and turn towards the Left Party in the coming months. We have to add to this the fact that many of the new recent recruits that the SPD leadership has been boasting about in recent months are most likely more yes-men and yes-women than critical elements. However, this will not stop sharp conflicts from developing between the trade unions and the SPD leaders in government, which in turn will be reflected in a deep crisis and polarisation within the SPD at some stage in the future, although this may not necessarily be something that we will see immediately tomorrow morning. The process will take some time.

SPD veterans and mainstream journalists have been portraying the last 1966-69 “Grand Coalition” as a “success story” and a “model to follow”. What they ignore is that the dimensions of the crisis they were facing then were really petty compared to today’s. In the face of a temporary and mild recession in 1967, pit closures and temporary unemployment of over 500,000, it was possible to adopt some Keynesian measures and return to a boom and virtual “full employment” by the late sixties. That coalition prepared the ground for in a period of genuine social reforms under the SPD-lead governments of the early 1970s.

Today the situation is radically different. The harsh reality and the gravity of the situation in 2005 is of a deep capitalist crisis with over 4.5 million unemployed officially. This does not allow for any real improvement in living standards and living conditions.

However, there is one interesting parallel from that period. The protests of workers and youth in 1967-69 burst the bubble of relative social stability that had developed during the years of the so-called “economic miracle”. The effect was a sharp ideological swing to the left in society and within the labour movement.

In a similar manner, it is also likely that the experience of today’s Grand Coalition will radicalise the working class and youth and lead to a massive questioning of the neo-liberal agenda imposed on German n society over the past couple of decades, opening up the way for an advance of the ideas of genuine socialism.