Germany cobbles together another coalition

published 8 December 2017

874-Merkel-634 — Angela Merkel is out to build a Grand Coalition

Another "grand coalition" between the SPD and CDU/CSU in Germany is looking likely. Chancellor Angela Merkel and SPD leader Martin Schulz met last week for preliminary discussions. "As a group, Germans are thought to value political stability" says Speigel.de. However, "a repeat of the SPD-conservative coalition is the kind of stability that wouldn't be good for the country". This is because the last four years have made clear that "a grand coalition is a static alliance, one that is good at spending money but not as adept at moving projects forward".

This type of political manoeuvring, though a short-term solution to political volatility, "can end up making the underlying causes of that volatility worse" says Amanda Taub in the New York Times. The trouble with the grand coalition is that the bland consensus politics it produces appears to justify populist parties' claim that "all mainstream parties are the same, controlled by elites who do not listen to the people".

Meanwhile, Merkel is at risk of losing the support of her own party especially that of "rightwing Christian Democrats who accuse her of relentlessly shifting the party to the political centre" notes the Financial Times' Guy Chazen. Indeed, "they feel that in the constant give-and-take with a leftwing partner, the Christian Democrats lost what little conservative identity they still had". Still, "the grassroots' frustration does not mean Ms Merkel's days are numbered". Not only has "the CDU hierarchy closed ranks around their chancellor", but "she has no obvious challengers". She looks all set to lead her fourth government.

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Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

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