High noon for Angela Merkel as crunch talks loom

Angela Merkel faces her political high noon on Sunday with long-delayed coalition talks in a bid to dodge fresh elections and a second voter drubbing.

Some 105 days after leading her Christian Democratic Union (CDU) to its worst election result in 68 years, Merkel on Sunday heads for talks at the headquarters of the centre-left Social Democratic Party (SPD).

Under the beady gaze of Willy Brandt, the late SPD legend who guards the party building now as an oversized statue, Merkel’s bid for a fourth term is a tense high-wire act with four separate unknowns to carry as she goes.

The first: Merkel will need to offer substantial concessions to win over SPD leader Martin Schulz. He wanted to rebuild his party in opposition after his own election meltdown but was urged to at least hold exploratory talks with Merkel.

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Given that, the SPD will sell its support only at a high price: greater spending on welfare and infrastructure, health reform and greater readiness to back French euro reform plans.

"In education, health, and old-age care and much more, we are not a modern land," said Schulz on Friday to the Bild tabloid.

But those SPD plans, and a call to finance relief for small and medium incomes with taxes on top earners, are as unpopular with the Merkel camp as an SPD demand to consolidate Germany’s two-tier health insurance system into one fund, paid into by all.

Then there is Europe: Merkel and her CDU allies do not share SPD enthusiasm for all of French EU reform proposals, particularly those seen as a burden on German taxpayers.

A second unknown for Merkel: how much she can give the SPD without getting backs up in her own party?

Conservative CDU figures, after years as passive hostages to Merkel’s centrist political path, want to claw back support with clear, right-wing conservative fiscal and law-and-order policies.

Immigration policies

Failure on this front handed the far-right Alternative für Deutschland almost 13 per cent of the vote in September, they say, an analysis shared by the CSU, Merkel’s Bavarian allies and a third unknown in talks.

Next September it faces a crucial state election and, after years of protesting but eventually backing Merkel’s liberal immigration policies, the CSU is adopting a tough refugee policy to appease would-be voters – to the fury of the SPD.

Which leads to the greatest question mark: whether the latest coalition talks in Berlin will ever lead to a government.

After all, the five-day exploratory session starting on Sunday is talks about talks: whether the parties see enough common ground to make formal coalition talks worthwhile.

SPD leaders have taken an open-ended approach: any formal talks will be book-ended by two votes, of delegates and rank-and-file members respectively. If either reject the prospective coalition deal, Angela Merkel is out of options – unless, that is, she drops her opposition to some sort of minority arrangement.

Elections are as unappealing an option for the traumatised SPD as the CDU/CSU. All are loath to hand the AfD another electoral triumph, particularly the CDU because another poll would throw open an awkward question: is party leader Angela Merkel now an electoral asset or a liability?

Voter ambivalence

On this question, polls suggest German voters are ambivalent. Party support is largely unchanged from September and two-thirds believe Merkel is no longer the leader she once was. But the same poll for public broadcaster ARD this week said almost two-thirds agreed that Merkel was still “a good chancellor”.

Political strategist and pollster Richard Hillmer, a long-time Merkel adviser, said the wily German leader may yet master the many unknowns ahead.

But as Europe waits for Berlin, he says German voters have yet to be convinced the would-be coalition partners have far-reaching ideas to address their deep insecurity at a time of massive change.

Just 45 per cent of Germans favour another grand coalition – the third since 2005 – while 52 per cent said they had no opinion what kind of government would be best for Germany.

“The big parties lost massive support since the refugee wave of 2015,” Hillmer says , “and, if grand coalition [talks] fail it could come to larger political fluctuations.”