Germany cobbles together another coalition

Another “grand coalition” between the SPD and CDU/CSU in Germany is looking likely.

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Angela Merkel is out to build a Grand Coalition
(Image credit: 2017 Getty Images)

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".

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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Dr Matthew Partridge
MoneyWeek Shares editor