Chapter 1
LOSE-LOSE PROPOSITION
Policy Change and Party Politics in the Grand Coalition
Clay Clemens
Introduction
Grand coalitions between a parliamentâs two largest parties enjoy the capacity to enact major change, whether such power sharing arrangements are common, as in Austria, or mere episodic experiments, as in countries ranging from Iceland to Israelâand Germany. For where more narrowly based governments run afoul of the Federal Republicâs âinstitutional pluralism,â an alliance of Christian Democratic Union/Christian Social Union (CDU/CSU) and Social Democratic Party (SPD) can âavoid or overcome structural gridlockâ due to a huge Bundestag majority and enough Bundesrat seats to pass any bill.1 Less clear is whether two traditional co-equal rivals will agree on policy change. One view is that sharing the risks and benefits of power leads both to see it as a possible win-win proposition, thus fostering cooperation. A second perspective, by contrast, suggests that the two partners instead see all policy outcomes in zero-sum terms, and, thus, seek to block each other, polarizing partisan competition and yielding stalemate.2 A third position is that variables like programmatic convergence, interest alliances, domination of each party by its more moderate elements, a weak opposition, and leadership skill determine whether there is agreement or gridlock.3
For some, the first federal grand coalitionâs ârather impressiveâ record from 1966-1969 vindicates the optimistic view.4 Despite reneging on a promised electoral law change, it would prove modern Germanyâs âmost successful long-term reform alliance.â5 Indeed, some saw the duopoly as so efficient that it endangered democracy by overpowering parliamentary opposition and indulging anti-democratic longings for consensus, âa substitute for the strong man.â6 To be sure, the 1960s grand coalition was âready and willing to actâ on domestic issues by âexpanding the state,â but âfundamental polarizationâ did prevent an historic breakthrough in foreign affairs (Ostpolitik).7 Moreover, facing weak mainstream opposition, the Union and SPD eventually drew apart as each sought to keep some supporters from defecting to more radical anti-system rivals.8 Still, their alliance âoptimally served the short and long term aims of both partiesââindeed, each gained votes in the 1969 Bundestag election.9
The second grand coalition formed by Angela Merkel in 2005 has drawn more critical reviews. With 73 percent of the Bundestag seats (448 out of 614), the government could pass any bill andâgiven that the Union, SPD, or both ran enough Land governmentsâhad scant fear of a Bundesrat veto (until Hesseâs 2009 election shifted the balance). Moreover, as a result of both majorities, it even had little reason for concern about the powerful Constitutional Court.10 Yet, within the first year, Der Spiegel found this âcoalition of the powerlessâ to lack decisiveness or readiness to accept any kind of risk, asking âwho is governing Germany?â By late 2008, the liberal weekly newspaper Die Zeit accepted that the alliance was âpretty much over.â11 Scholars like Wolfgang Rudzio classify âthe quality of its output as mixed,â a âhodgepodgeâ that left key policy questions unresolved, or âreached solutions hardly capable of functioning.â12 Reimut Zohlnhöfer notes that the Grand Coalition did not use its power to pass many structural reforms, settling instead for âpatch up jobs,â many âpartially contradictory.â13 While Merkel would defend her governmentâs preference for âsmall stepsâ over bold leaps, others saw it as staggering and stumbling.
Blame for this record has been placed on polarized partisan competition. Zohlnhöfer highlights highly divergent positions: âthe Grand Coalitionâs partners themselves blocked ⊠significant reform measures.â14 Journalists accused the Union and SPD of âdoing nothing that could help the other side more than its own,â as âblack and red ⊠remained alien worlds.â15 Electoral considerations are likewise cited, mainly a scramble for centrist, swing voters that diminished any zeal for bold ventures.16 Also, both Union and SPD entered the Grand Coalition at a time and as a result of declining support, having between them captured barely 70 percent of the popular vote (compared with 90 percent in the 1960s and 1970s). In a more fragmented party system, they faced three Bundestag rivals, each angling to lure away disaffected supporters. Finally, unlike in the 1960s, this Grand Coalitionâs partners had not sought to govern with each other, and settled for doing so out of desperation. That made for âan uninterrupted campaign,â as each positioned itself for the next election and, ideally, thereafter a new liaison: for the Union, an alliance with the center-right, free-market Liberals (the Free Democrats or FDP); and for the SPD a duo with the environmental Greens (with whom they had co-governed from 1998 until 2005) alone if possible, and, if not, conceivably a three-way center or even all-left coalition including the Left Party.17
Yet, had interparty friction alone been decisive in constraining policy change under Merkelâs Grand Coalition, one partner would have more often stood united against the other, generating gridlock. That was rare, or often merely a proximate cause of its âhodgepodge.â The ultimate source was generally intraparty paralysis, with neither campâs leaders able to advance ideas that enjoyed solid support in its own ranks. In short, the Grand Coalitionâs main problem lay less in its own dynamic than at one level lower.
Three Partners in Crisis: The Parties of Merkelâs Coalition
Fully explaining the policy record of Merkel government thus requires seeing it not only as two co-equal rivals waging a âWar of the Roses,â but as more fragmented with differences inside the CDU/CSU and SPD often as deep as those between them. For this Grand Coalition coincided withâand would exacerbateâan identity crisis within each of its camps. The root cause lay in societal changes that weakened the size and loyalty of each partyâs traditional support, making it vital, if not easy, to woo more swing voters away from each other, while simultaneously fending off three smaller rivals. This resulted in conflicts over orientation that fueledâand were, in turn, fueled byâstrategic dilemmas and leadership struggles.
The CDU
Merkelâs CDU entered the Grand Coalition amid unprecedented uncertainty about its traditional identity. For decades this broad center-right party had thrived (even coming close to an absolute electoral majority at times) based on representing Christian social values, economic liberalism, and cultural conservatism, a programmatic balance preserved by giving each faction an implicit veto. Yet, the social wingâprotector of solidarity-based welfare state policiesâhad lost influence as Germanyâs Catholic labor movement (anchored in the Christian Democratic Employees Association) waned in the 1980s and 1990s, and it could no longer count on patronage long provided by Helmut Kohl after his 1998 defeat and tarnished reputation in light of the donations scandal. Meanwhile, the CDUâs pro-business market wing had drawn more adherents as a neoliberal discourse gained currency in Europe amid stagnation and joblessness blamed on welfare state spending.18 Seeking to trump reforms pushed by the SPD-led government, Merkel (Chairwoman of the CDU since 2000) had prodded her party to pursue a âfundamentally new policy,â altering its old âsocial-marketâ balance by making an even bolder neoliberal shift. Her 2003 Leipzig Program proposed slashing labor costs (through more individual provision of social security), loosening job protections, cutting benefits, and reducing taxes. What she labeled âthe most comprehensive reform package in historyâ was, others agreed, âall about upheaval, not continuityââand it galvanized the market wing.19 CDU fiscal conservativesâwell-represented in the Bundestag caucus and among its regional minister-presidentsâjoined in, stipulating that any cuts in payroll or income taxes be offset so as not to increase debt.20 Others went along mainly in the hopes that it would one-up the SPD and keep the party at 40 percent voter support.
This neoliberal turn seemingly invigorated the CDU in 2004-2005, but doubts soon mounted. Given SPD charges and voter concerns that the platform would gut welfare state benefits, the social wing urged shelving key parts and fiscal conservatives grew warier that bold reform might mean larger deficits after all. Market wing leaders had to fight to keep Leipzig at the heart of the 2005 Union campaign manifesto. But, as the partyâs huge initial opinion poll lead waned over the summer and it won just 35 percent of the vote in September, recriminations flew. The social wing blamed the manifestoâs âlack of compassionâ for scaring centrist voters.21 A defensive market wing retorted that CDU half-heartedness had driven pro-reform voters to the FDP. Bitter though the Union was at having to settle for a grand coalition, Leipzigâs now isolated advocates were poorly positioned to insist that Merkel press it. She all but dropped most planks in her bid to lead the new government, reaching a deal with the SPD by instead giving fiscal consolidationâeven tax hikesâtop priority.
Intraparty debate would thus rage during the Grand Coalition. Social wing leaders insisted on returning to âbalanceâ and solidarity, even to a critique of capitalism. While not going that far, fiscal conservatives also repudiated large parts of the Leipzig Program. Thus, the market wing, while still better represented among party activists, could only deplore this CDU shift âaway from a market-oriented policy.â22 Grand Coalition politics added to the confusion. Outflanking its new governing partner, the CDU Dresden Congress in late 2006 voted to reverse even a key part of SPD-implemented reforms already in law. A year later in Hanover, the party adopted a new Basic Program again granting âjusticeâ and âsolidarityâ equal weight with âfreedomâ among key CDU principles. It also gave the party a greener image by stressing environmental themes. By contrast, Leipzig proposals would appear only in vague form, if at all. Market wing leaders kept pressing the CDU to avoid further âsocial democratizingâ itself. Yet, any momentum for returning to a pro-business or neoliberal path was blunted by the 2008 global financial crisisâinstead it fueled fresh agonizing over where the party stood regarding its basic views on state intervention in the economy.
The CDU identity crisis had a second dimension. In opposition before 2005, the party had begun to revise its traditionally conservative cultural profile on family and immigration issues above all. This process accelerated in the Grand Coalition. Younger, culturally liberal Christian Democrats aligned with Merkel pushed such âmodernization,â insisting that their party recognize societal realitiesâthe rising share of working women, single parent households, unwed couples, and gay partnerships, as well as a need to better integrate residents and citizens with migration backgrounds. They argued that adaptation would impress centrist voters and blunt efforts to depict the CDU as reactionary. Cultural conservatives fiercely resisted such âpanderingâ to the Zeitgeist and argued that abandoning the âfamily silverâ of traditional religious or national values would demoralize core supporters, driving many into the ranks of non-voters or to radical fringe groups. While this wing in...