Shame, Shulzie got smashed

Mrs Merkel’s former coalition partner, the Social Democratic Party (SPD) suffered the worst electoral defeat in its history and immediately announced it would go into opposition.

So what’s it like to face a real electorate after all those years in Brussels then Martin?

The SPD’s decision to return to opposition has limited her options, with a three-way coalition with the pro-business Free Democratic Party (FDP) and the Greens the only obvious option.

The FDP, which returned to parliament with 10.5 per cent after losing all their seats four years ago, have long been seen as Mrs Merkel’s preferred coalition partner.

The Greens, who won 9 per cent, are also seen as a viable partner after moving to a more pragmatic, centrist course in recent years — but they are not natural bedfellows for the FDP.

This is going to be fun. As the only viable alternatives to gain an actual majority are the grand coalition, currently ruled out, with the FDP and then either the Greens or the AfD. Or even more amusingly, Die Linke, the Corbynite left.

Isn’t coalition politics grand? The electorate moves determinedly to the right meaning the Greens must enter government?

45 thoughts on “Shame, Shulzie got smashed”

  1. Most likely there will be another election this year. After a Merkel resignation and a proper climbdown on the refugees/fakefugees issue. I can’t see anyone going into a new coalition with Merkel as she has destroyed the FDP once and the SPD twice as coalition partners.

    AfD will not form part of any coalition ever.

    To be fair to Schulz he was elected MEP on 3 occasions, under a system very similar to that used in the UK. And now Is stuck with a seat in the bundestag he doesn’t want. You wouldn’t claim Nigel Farage was not legitimately elected I assume?

  2. Merkel would prefer a coalition with SPD in fact. The parties are not that different. But last night on telly Schulz was in total attack mode (they had a panel of all the party leaders- can you imagine that happening in the UK?). I think he is serious about no coalition, and Merkel already thinking about stepping down. We’ll see.

  3. This bit will be most entertaining:
    “jurists of the German parliament issued a Gutachten (expert opinion) accusing Merkel of never providing legal arguments for opening the borders in 2015 and doing so without parliamentary approval as required by law. In short, she broke the law – and not just German law, because she opened not just Germany’s borders, but those of the E.U. as well. ..This serious misdeed is unlikely to be swept under the rug, since two of the parties that have now entered the Bundestag (FDP and AfD) insist on a parliamentary investigation.
    http://www.americanthinker.com/articles/2017/09/angela_merkels_pyrrhic_victory.html#ixzz4tfdxIhos

  4. BiG – is the AFD actually “far right” as it is being described over here? I haven’t looked particularly hard and there is probably an English language manifesto out there somewhere but you’re on the ground so I thought I’d ask.

  5. This isn’t going to be exact, cross country comparisons never are. But think of AfD as having started as a Ukip-like party. FDP even but anti-EU and euro. This will obviously attract, as Ukip did (and as the equivalent Czech party did) attract the EDL and BNP-lite crowd (the true nutters will stay out there making Nazi salutes). Add internal party democracy and the EDL/BNP-lite types have an opportunity to take over the entire thing. This didn’t happen with Ukip (yes, I know what people say, but they didn’t) nor the Czechs. To some extent that is what happened with AfD.

    All of these parties, obviously, are going to gain some of their support from the anti-immigration crowd. What is being referred to here as “far right.” But the AfD has them on the governing council at the very least, something the other two never really have done.

  6. @Interested,

    It’s difficult to give a definitive answer. It definitely has far-right elements and shows no sign of throwing them out. The potential is more concerning than the current status.

    It started life as a UKIP-lite eurosceptic party, but mathematical economics doesn’t appeal to the masses. So it’s become an anti-immigration (specifically, Merkel’s immigration) populist party. The initial founders (economics professors – real ones) have left or been kicked out.

    That in itself doesn’t make it far-right, especially not as their migration policy is very close to that of the (properly) liberal FDP, and close to mine. And as we all know I am a leftist commie CM traitor scum. (Ecks, ftr I voted FDP so you can suck on that next time you call me a leftist). It’s also revealing, but not surprising, that most former Linke voters who switched party went to the AfD.

    But – there are very definitely nasty racist and xenophobic elements, some of whom aren’t embarrassed to show it in public, and it will now always appeal to the 1% of voters with such tendencies. What is more worrying is that it might mainstream itself and then mutate into something far more dangerous. I think (and hope) a CDU volte-face will basically bury them.

    Tim Newman should comment here as he argues this proto-fascism (like Trump) is actually the wake-up call against progressivism. We should be glad it’s Trump because it could be worse. I tend to agree but Tim argues it more eloquently.

  7. The Greens, who won 9 per cent, are also seen as a viable partner after moving to a more pragmatic, centrist course in recent years

    Like closing down all coal-fired power stations?

  8. Tim Newman should comment here as he argues this proto-fascism (like Trump) is actually the wake-up call against progressivism. We should be glad it’s Trump because it could be worse. I tend to agree but Tim argues it more eloquently.

    Yeah, I spent Friday evening with a good German mate of mine, someone who could be classed as centre-right. He is happy about the rise of the AfD even if he thinks they’re complete muppets. He laments the fact that all major parties lurched leftwards some time ago, leaving people like him with nowhere to go. He hopes that the AfD will force the more reasonably parties to shift rightwards, same as Wilders made the centrists in the Netherlands shift rightwards by adopting some of his policies. He agreed with me that if you try to exclude reasonable right-wing parties from the political landscape, people are going to start voting for Nazis out of pure frustration and because they have no other option.

  9. He agreed with me that if you try to exclude reasonable right-wing parties from the political landscape, people are going to start voting for Nazis out of pure frustration and because they have no other option.

    This. In spades. Unpleasant though it might be, it’s a fairly easy sell. And no small amount of blame goes to the Lefty-Media establishment who have implicitly and explicitly called classical Liberals (FDP et al.) fascists for decades. Call reasonable people fascists for long enough, then one day the real thing comes along and the distinction is blurred to many.

  10. If you’re the BBC or The Guardian (like there’s a difference), anyone much to the right of (say) Matthew Parris or Ken Clarke is ‘far-right’.

  11. “The Greens, who won 9 per cent, are also seen as a viable partner after moving to a more pragmatic, centrist course in recent years”

    Merkel could benefit from a quick study of the Con/Lib coalition.

    She would see that the Greens would defoliate Germany’s great forests if it gave them a sniff of power.

  12. “The Greens, who won 9 per cent, are also seen as a viable partner after pretending to be a more pragmatic, centrist party in recent years in an attempt to gain power”.

    More likely.

  13. So Much For Subtlety

    Bloke in Germany – “And as we all know I am a leftist commie CM traitor scum.”

    Only where your own country is concerned.

    I would not put anything past Merkel. To stay in power she could easily do a deal with the Stasi or the Schwuppies. I would hope the rest of her party does not agree, but they would probably go along with it.

    If not, minority government? I am delighted to see the AfD win some seats. I would rather they formed government of course.

  14. The Greens *are* a bit more sensible than they were – they now want to close polluting coal-fired power stations whereas previously they closed nuclear power stations which forced RWE and E.on to open new brown coal- (lignite-)fired power stations which are the most polluting of any in Europe.
    [Pendants, if you want to check E.on, it has since transferred all its coal assets to Uniper]

  15. I don’t care who you vote for Biggie. You fuck the Fatherland up anyway you like.

    My concern is German participation in building the Dindustan Express. Which threatens us all(Did you get that gun yet Biggie?)

    Your confident pronouncements about the Fat Cows immanent fall sound like classic “all over by Christmas” OVER-confidence to me.

    Also you need plans to punish the Fat Bitch. Since she has been the ultimate cause of lots of German women/girls/little boys at swimming pools etc being raped/assaulted /what-have-you the direction and form the punishment should come from seems obvious enough. If a tad outlandish. Will even the human dregs of the Middle East have the stomach for it?

  16. There’s so much to enjoy in the consternation of others, those who were relieved at Marine’s trouncing and who thought that the tide of deplorable voters was receding.

    And lo, it came to pass that one in eight sensible Germans in the EU’s powerhouse nation voted for AfD with an even more impressive result in the Länder of the former GDR.

  17. Also “And as we all know I am a leftist commie CM traitor scum. ”

    You flatter yourself as ever Biggie.

    Leftist CM scum manqué` perhaps.

  18. Bloke no Longer in Austria (but watching German TV)

    The AfD won 25% of the vote in the old East Germany and with 27% were the largest party in Saxony.

    In Bavaria the CSU crashed ( their words ) to 38%, whereas they were expecting over 45. the AfD als won 12.5 there and Seehofer is questioning whether he wants to go into coalition with Merkel, balming her for the terrible result.

    OK something odd is happening with the AfD. Petry has won a direct seat, but is not going to join the parliamentary party. She was rather brutally ousted at the beginning of the year by the oaf Gauland and the scary Alice Weidel and has been plotting her revenge ever since. Like all these protest parties, they are a long way from developing a party discipline and this sort of blood-letting is to be expected.

  19. Look, all this detail-based analysis is fine, but what I want to know is this:

    Are the Germans going to break out the tanks and invade Poland like the old days, or are they going to stick to doing so with EU regulations and ever closer integration?

    They are clearly quite strained for space, what with the open door policy, and that liebensraun is going to have to be found somehow…

  20. Isn’t coalition politics grand? The electorate moves determinedly to the right meaning the Greens must enter government?

    That’s what’s so good about it. By doubling down on stupid, they sow the seeds of their own destruction in the near future. Just as the Democrats did in the USA.

  21. The Guardian have been fawning over Muttie, but Muttie’s party is the German Conservative Party. Surely, they’re EVILL TOREEZ.

  22. “Are the Germans going to break out the tanks and invade Poland like the old days, or are they going to stick to doing so with EU regulations and ever closer integration?”

    Are Germans allowed to own property in Poland? If so no need for tanks this time, they’ll just buy it instead………………

  23. Bloke no Longer in Austria

    Mrs Merkel will have to form a coalition.

    Jamaica ?

    No, she’s doing it of her own accord !

    Boom boom !

  24. Similar thing happened in NZ this weekend, ruling National party increased their total number of votes and the % of votes cast, beat the main opposition Labour party by 13% yet have to form a coalition with one of the lefty minor parties to continue in government.

  25. @BILH

    Not entirely factually accurate.

    National Party @ NZ GE 2014
    1,131,501 votes (47.04%), 59 seats

    National Party @ NZ GE 2017
    998,813 votes (46.03%), 58 seats

    So votes down a fair bit, vote share down slightly, seats down by one, but that one seat matters a lot when there are 120 seats in parliament and two of the three minor parties they had confidence and supply with – the centrist United Future and the what-it-says-on-the-tin Maori party – being wiped out from parliament. The ACT (which I gather would likely be the Worstallite party of choice) kept its one seat, but it does fall short.

    You’re right that National beat Labour (nice to see the Kiwis keep the “U”), but it was by 10 percentage points not 13. They thumped them by 22 pp in 2014, which was most impressive!

  26. @BIG

    I suspect the FDP would be the Worstallite-approved party in German elections, but they do seem very very very opposed to any form of transfer payments e.g. from Germany to Italy, and suspicious of Macron’s attempts to knock some sort of Eurozone chancellery/finance ministry together.

    If the euro is going to function as a currency in the long run. doesn’t somebody need to grasp the nettle and get on with implementing this stuff? Alternatively, saying that euro membership is not tenable in the long term, and that preparations should be put underway for a return to the DM, would be a coherent policy. The FDP position seems to be 100% commitment to wanting to keep using the Euro, while 100% wanting to prevent the development of the fiscal transfer mechanisms necessary to make the Euro work. That’s hypocritical free-riding of the highest order, but it must also be storing a ton of trouble for the future. Not a chicken I’d want to see coming back to roost while I was in charge.

  27. MyBurningEars – “I suspect the FDP would be the Worstallite-approved party in German elections, but they do seem very very very opposed to any form of transfer payments”

    But? I would think that Worstall might not be such a Worstallite but that Worstallites in general also opposed any form of transfer payments. Why should the feckless south get welfare at the expense of Germany?

    “The FDP position seems to be 100% commitment to wanting to keep using the Euro, while 100% wanting to prevent the development of the fiscal transfer mechanisms necessary to make the Euro work.”

    The Euro does not require any fiscal transfer mechanisms. It requires the feckless south to stop being feckless. The idea that a permanent welfare state is a necessary component of a monetary union is absurd – and pernicious. Ireland used Britain’s currency for decades but it did not get, nor did it need, British transfer payments.

    The European Union is just making this up so that they can justify their bureaucracy and continue to pay off their friends in the feckless south.

    The problem is that the Southern states will not stay within their means. They want to live off the German credit card. The solution is not to give them more money to do so. The solution is for them to work harder, export more and consume less. Economic reform with Italy is what is needed.

  28. Smfs, and leaving the Euro to the economies that are ready for it would make the adjustment easier. The pretence that all Euro nations are as mercantilist as Germany does no one else any favours apart, maybe, from Netherlands. And Germany is making out like a bandit on an undervalued currency. As such, they should contribute structural funds to under developed economies, within reason

  29. Diogenes – “and leaving the Euro to the economies that are ready for it would make the adjustment easier.”

    In the short term. The French, much less the Italians, discovered the joys of devaluation in the 1920s and since then their currency has become worthless on at least four occasions. A devaluation would be a cheap and easy way to avoid the need for structural reform, but in the long run these economies need the structural reform. It will hurt but they are better off by not devaluing and reforming instead.

    I used to have a paper that compared Jamaica and Barbados I think that made these choices. Jamaican devalued. Barbados did not. After a while Jamaica was much poorer. They discussed why that might be.

    “And Germany is making out like a bandit on an undervalued currency. As such, they should contribute structural funds to under developed economies, within reason”

    Germany is exporting more and consuming less. German companies are making out like bandits but the Germans are poorer. They have been contributing to structural funds. For decades. Spain has four dozen useless airports built with German money. Anywhere you go in the south there are vast freeways with no cars on them built with German money. How has that helped?

    It is not necessary. It is not even a good idea. Let the feckless stop being feckless. Then they can build their own damn airports.

  30. Smfs has answered for me.

    On Germans making out like bandits, I have to ask a question that has remained unanswered for years:

    Why is anyone better off earning more of a less valuable currency than less of a more valuable currency?

  31. BiG

    Cheers for the reply – appreciated. Ultimately the way the US makes the dollar work is to have a substantial federal budget that achieves transfers from state to state. Not the same thing as direct bail-outs of overspending states, but I suppose you could still argue that states that net benefit from federal fiscal policy have some extra leeway to avoid painful reform. At any rate the EU seems a long way from that, its central budget is piddling. Our opinions seem to differ on whether that’s a good or bad thing for it!

  32. The dollar would still work if there was no “welfare-style” transfer between states of the US. However, the productive states would be richer than now and the less productive states poorer than now. And you would see all states governments going under more often.

    That’s what the euro has done – made state bankruptcy more likely (as Greece, Tim can tell us how often it has technically gone bankrupt but it’s at least once), because the print to pay your creditors option (along with devaluation) is no longer there. As it is not when states like Argentina borrow dollars and fail to repay. That didn’t break the dollar either, so why anyone expected Greece to break the euro (as it demonstrably did not) is beyond me.

    Sure, Greece can leave the euro if it likes (and can work out a non-catastrophic way of doing so), and then print and devalue. But that really only buys a little time – less than in the past because everyone knows you are diluting the silver, so to speak. Against the alternative of choosing to earn and spend fewer euros while you make your economy competitive, there isn’t much difference. The only reason would be if you could redenominate all your euro debt, but that would be legally fraught – not just for the state (which has tanks and guns) but for the millions upon millions of private contracts written in euro.

    So I really see no reason why there is a need for transfers, any more than there is between myself, my neighbour who earns half what I do and my other neighbour who earns twice what I do. All three of us are net payers and receive nothing (except kiddie money) from the state, so transfers (the fact we pay different tax rates) are academic. And as you say the EU is little more than a rounding error in terms of the direct taxation cost on citizens.

    I think a case can be made (not that I am making it) for doing it on a small scale in terms of some form of social welfare, but certainly not to make an entire national economy more competitive. All the evidence from the past is that pouring money into places for free (reparations, Africa/development aid) actually damages the receiving economy.

    Tim has explained many times why a trade surplus (or deficit) is irrelevant of itself. You’re looking at just one part of the income/expenditure account. It has to be matched by foreign investment (even if that’s just buying stuff up to park cash). Germany would have a trade surplus of the same cash value even if it went back to the mark – it would have to export less stuff in exchange for that cash. So the “undervalued” (honestly, not by much, and everyone conveniently forgets it was overvalued a few years ago) Euro means the world gets more German goods cheaper.

  33. https://www.forbes.com/sites/timworstall/2016/09/11/the-euro-is-a-disaster-stiglitz-krugman-milton-friedman-and-james-tobin-agree/#50e8be646063

    So far the political damage has been contained. I suppose it is easy to sit in Germany and gloat over the suffering of other people

    The structure of the euro insists upon the most difficult, the method with the greatest human suffering, way of adapting economies to such asymmetric shocks. Which is, of course, why it is a disaster. For inflicting human misery isn’t notably thought of as being a desirable object of public policy – rather the opposite in fact, alleviating it is.

  34. Why is every piece critical of the euro:

    full of hyperbole (disaster, catastrophe, elite hubris, failed prestige project…)

    totally lacking in any proposed solution other than “smashing it up” and going back to the wonderful chaotic days of multiple currencies

    silent on the issue of other currency unions past and present, unilateral dollar/euroisation (mostly by countries vastly more fucked up than Greece), and why Hampshire doesn’t have an independent currency

    mention the equal or greater human misery that Greeks woudl be suffering if their government had printed money to pay its debts and continued spending like a drunken sailor forever more?

  35. @BiG

    You seem to be framing everything in terms of transfers between national budgets (rather than some central authority assuming control of a decent chunk of tax and spend), and hence seeing the issue in terms of the profligate (boo) vs the prudent (yay!). This naturally leads to your conclusion that the main problem with the USA would have in the event of states taking over tax & spend, would be that spendthrift states would declare bankruptcy more often, but otherwise things would be “fine”.

    This is really, really not what economists are worried about. Diogenes points you in the right direction above. I don’t understand your criticism of why such articles don’t say that Hampshire should have its own currency, or at least explain why it shouldn’t – I’ve seen plenty of pieces that explain this clearly using an English region as an example (I’ve seen Manchester used before, for example, though admittedly not Hampshire!). The answer is simple: Hampshire is very tightly integrated into the rest of the UK economy, people can easily cross in or out of the Hampshire border to commute or even migrate for work, and the UK government does the vast majority of the taxing and spending there. In the event of a bust in one or several of Hampshire’s key industries, then the situation can be stabilised by labour moving out and extra spending coming in. Vice versa if Winchester unexpectedly becomes a boom town.

    The theory is optimal currency areas. You want mobility of labour and capital, flexible wages and prices, a system of risk-sharing (like fiscal transfers) and alignment of business cycles.

    Milton Friedman explained very clearly why the USA worked as one:

    The United States is an example of a situation that is favorable to a common currency. Though composed of fifty states, its residents overwhelmingly speak the same language, listen to the same television programs, see the same movies, can and do move freely from one part of the country to another; goods and capital move freely from state to state; wages and prices are moderately flexible; and the national government raises in taxes and spends roughly twice as much as state and local governments. Fiscal policies differ from state to state, but the differences are minor compared to the common national policy.

    Unexpected shocks may well affect one part of the United States more than others — as, for example, the Middle East embargo on oil did in the 1970s, creating an increased demand for labor and boom conditions in some states, such as Texas, and unemployment and depressed conditions in others, such as the oil-importing states of the industrial Midwest. The different short-run effects were soon mediated by movements of people and goods, by offsetting financial flows from the national to the state and local governments, and by adjustments in prices and wages.

    The Eurozone already starts off with some serious ties around the hands behind its back – national borders might be easy to travel across, but for whatever reason (language? differences in education and certification? substantial divergences in labour laws?) not so easy to move across for work. Labour mobility is several times higher in the USA than the EU (think Barry Eichengreen has investigated this). Choosing not to sort out the fiscal transfer issue is taking a problem which was already bad, and making it worse.

  36. Hampshire (although I prefer Liverpool when it comes to receiving)…

    To extend it.

    If Hampshire is doing well, it makes net transfers into the central treasury (ie taxation).

    If Hampshire is suddenly unemployed, it changes to having net receipts from the central treasury (unemployment benefit).

    Ie, in addition to people moving, there is a natural tax/benefit stabiliser that helps create partial equilibriums with regard to regions that are rich or poor, or changes from existing conditions. We willingly accept it, because – despite scouse – it’s all part of the same nation (or whatever other reason one prefers).

    The EU eurozone (or more accurately, Germany) refuses to play this tax/benefit game with its new lander buddies in the south.

    In doing so, it proves that the euro is not an optimal (or even half useful) currency zone.

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