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January 18, 2018

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How about a two-year grand coalition?

It is too early to make predictions about what will happen at the SPD's Congress on Sunday. It has been our expectations that the regional SPD parties will - in their majority - support the negotiations, but we are not sure that SPD members will support the final deal when they cast their ballot in private. There are a lot of angry recriminations within the SPD between supporters and opponents to a grand coalition.

What we assume will happen is that the SPD leadership will pull a rabbit out of the hat - perhaps a dead rabbit or something that looks like a rabbit - with the goal to persuade reluctant marginal delegate voters. FAZ reports on the big compromise that could tilt the balance in favour of a grand coalition vote. The coalition agreement between SPD and CDU/CSU already contained the possibility of a mid-term evaluation after two years. Whether this is substantive or just procedural is open to question. One could argue that the SPD would renew the coalition for the same reasons that it enters it in the first place. If they are too scared to say no to a grand coalition now, why would they pull out of an existing one in two years time? Think of it from the perspective of a marginal SPD MP, of which they are many. They risk losing everything. 

FAZ sees this a little differently. They believe that this compromise would lead to the automatic failure of the grand coalition. The CDU/CSU might see this break-clause as an opportunity for a shift from Angela Merkel to a new leader and to a new coalition. It is much harder for a party to switch leaders at the end of a term. FAZ argues that Merkel's position within her own party will be much weakened at that time.

The paper notes - as we have done before - that the real battle will not be over with the party congress on Sunday. SPD activists are much more hostile to the grand coalition than the regional leaders who will be casting their vote. And that would be the most catastrophic scenario for Martin Schulz. If the congress votes in favour of a coalition, but the SPD members vote against it later in the referendum.

Jasper von Altenbockum notes the fundamental contradiction with the German obsession for coalition agreements. The pre-agreement, which ran to 28-pages, is as detailed as final agreements used to be. The fundamental misunderstanding behind this process is that governing is not about contracts, but an exercise to deal with the unforeseen.

As far as the actual coalition agreement is concerned, it is little different from the Jamaica-agreement, except on Europe, where the differences are substantial. It was the number one item in this agreement, and number 13 in the other. In most other policy areas, there is little difference to the Jamaica agreement. The reason is that the CDU is the party at the cross-roads in the German political spectrum, which is why its agenda always ends up on the top.

Our other stories

We also have stories on the Franco-German paper on eurozone reform; on the stickiness of core inflation; on how Europe is playing in the Italian elections; on whether Greece should go for a precautionary credit line; and on a controversial decision by the French prime minister.

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