LONDON (Reuters Breakingviews) - Winning brings its own problems. Chancellor Angela Merkel is likely to land a fourth term in German elections on Sept. 24 yet may be forced to govern with a small majority in partnership with the Free Democrats (FDP). That would be bad news for Germany and the European Union.
The FDP, the traditional coalition partner for Merkel’s CDU/CSU party, failed to win enough votes to enter parliament in 2013. But three of the seven big pollsters predict the two parties will together have a slim majority this time around. In that case, her current “grand coalition” partner, the battered Social Democratic Party (SPD), is unlikely to be willing to team up again.
A different political partner would herald a new approach to economic policy and Europe. The FDP’s campaign slogan roughly translates as “Think differently” but the party touts old Teutonic economic orthodoxies. Its manifesto promises more fiscal austerity and pledges to cut government debt and taxes simultaneously. That would curtail the government’s ability to invest more in infrastructure. And while the FDP backs EU integration, it trenchantly rejects further bailouts for Greece. In fact, FDP leader Christian Lindner, who might become vice chancellor in a coalition government, has repeatedly called for Greece to be ejected from the euro zone.
Lindner, the architect of his party’s revival, is keen to show that the FDP is no longer willing to ditch campaign pledges easily for a place in government. He is therefore likely to curb Merkel’s ability to strike a big bargain on structural reforms and looser fiscal policy with French President Emmanuel Macron. Political pressure to take a tough stance on Europe will be all the greater if the far-right Alternative for Germany wins seats in the Bundestag, as looks likely.
A small majority will leave Merkel vulnerable if there’s a new crisis in the euro zone - it may only need a handful of dissenters to reject another Greek bailout to bring down the government. Merkel’s re-election might burnish Germany’s reputation for political stability. But it would not take much to damage this veneer.