Following Sunday's elections, there has been a scramble to assess the outcome but I think it will be a whle before we really know what the new coalition will be able to accomplish. There is a boatload of problems coming at Merkel and Guido Westerwelle and forging responses is going to be as difficult as it was in the former coalition, perhaps even more difficult. The FDP will be trying to argue for their main campaign promises - lowering taxes, reforming the taxation scales and cutting government spending. But it will be difficult to get a consensus on these issues with Merkel's team. She spent a good deal of her campaign stressing the value of Germany's social market model, with emphasis on both those words: social and market. Finding ways to cut the social end of that equation will be difficult for her, keeping in mind that the CDU and the CSU lost support on Sunday. Of course conservative criticism of Merkel was that she had drifted too far to the left in the coalition with the SPD. But her core support is also drawn from the ranks of those worried about their jobs, pensions and their future in general. She and Westerwelle must find ways of sequencing reforms so that they are digestable for a nervous public.
Merkel will bring some of her agenda from the old coalition into the new one. She is unique in that she is the first Chancellor to govern in two different coalitions. But this time she will be pressed to say clearly what her priorities are. She is in a stronger position than she was with the SPD.
The success of the FDP was generated by widespread ticket splitting, with many voters giving their second vote to the liberals as a way of ending the the prospects of a continued SPD-CDU coalition. How many of those votes were expressly cast for an FDP program is not clear.
Given the fact that Merkel's campaign was not based on specifics as much as it was shaped around Merkel, the next few weeks will unveil more of what this team is prepared to do than we have seen thus far.
Because foreign policy issues were largely absent from the campaigns, that area of the coalition's agenda will need to be worked out carefully. Westerwelle's desire to be Foreign Minister will require that he and the Chancellor maintain synergy when it comes to dealing with tough issues like Afghanistan, Iran and and other areas of uncertainty. Merkel will maintain control over the priorities, and the two will need to be singing from the same sheet. That seemed to work well between Merkel and Steinmeier for the most part of the past four years. Westerwelle's positions on foreign policy issues are not as well known as are Merkel's. It would appear that he will rely on former Foreign Minister Genscher for advice. We can expect that foreign policy experts in the FDP will also be drafted into the foreign office, like Werner Hoyer or Alexander Graf Lamnsdorff. Merkel will presumably keep her foreign policy advisors in the Chancellory.
The FDP will get four Ministries and push for five. That would include Foreign, Justice, and Finance,Science and Education and then maybe Environment.
There is no reason to think that a major shift in German foreign policy will occur. Westerwelle has expressed his interest in pursuing efforts at arms reductions and non-proliferation of nuclear weapons. That should match up with Obama's focus on getting the START treaty renewed with Russia. There will be no moves to reduce Germany's presence in Afghanistan but then again no moves to increase it either. Germany will be pressed by Washington to increase aid and police training resources.
The next step in sanctions on Iran is expected in the coming months but Merkel has made it clear she favors that if Teheran does not respond to calls for more cooperation. If zu Guttenberg remains Economics Minister, he will also support that as he had been focused on Iran in the past few years when he served on the Foreign Relations Committee.
With regard to relations with Washington, the new coalition will be dealing with a President who is under increasing pressure at home to show progress on several fronts. He could need help from Berlin. Some criticis argue that his charm offensive in Europe has not brought him significant results. That judgement depends on what expectations are held. To repeat, significant increases in troop strength in Afghanistan have not been forthcoming from Germany or anywhere else in Europe largely due to domestic political constraints and that will not change much. One opportunity for Obama to get some help would be to get something out of the December Copenhagen meeting which might assist in getting a climate bill through the Senate.
Germany's next Finance Minister - probaby Otto Solms of the FDP - wlll join the debate and discussion on how to deal with regulatory regimes. He has long been the chief party spokesman on financial issues and knows many of the players in Washington. We could however see a push from the CSU to move zu Guttenberg over to the Finance Ministry. The CSU held that office in the last conservative coalition under Helmut Kohl. It is an important and powerful Ministry with extensive veto leverage on other ministries. You have to wonder whether zu Guttenberg would want that slot given the fact that you can make a lot of enemies. The CSU will claim two ministries, the other being Agriculture.
Again, this is a second act for the Chancellor and the stage will have her front and center in the full spotlight. We will now have a better opportunity to see what she is made of.