Why the German election matters, despite Angela Merkel's inevitable victory

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The choice of coalition partner reflects a wider cultural struggle for the country (Source: Getty)

Every election or referendum has a defining image.

For Barack Obama’s 2008 campaign, it was his “Hope” poster. For last year’s presidential election, it was Donald Trump’s “Make America Great Again” red caps. And for the EU referendum, it was the big red bus emblazoned with the slogan “We send the EU £350m every week. Let’s fund our NHS instead”. I still get asked about this at every event I speak at.

The defining image of the 2017 German federal election is one of the Christian Democratic Union (CDU) posters. “Enjoy the summer now, and make the right choice in the autumn,” says a young woman lying carefree in a meadow.

Read more: Merkel forced to defend her response to refugee crisis in TV debate

As with previous elections, Angela Merkel spent the summer hiking and the last few weeks laying low. Opposition parties have campaigned fruitlessly, while journalists have lamented the lack of stories to cover, describing it as a “sleepy” election campaign.

But, once again, her plan is working. Merkel has essentially depoliticised German politics. The CDU has been polling comfortably at around 40 per cent for weeks. Merkel is by far the preferred Chancellor over the Social Democratic (SPD) candidate Martin Schulz, and she is set to win a historic fourth term.

Across the world, politicians marvel at the fact that her approval rating is now higher (59 per cent) than it was when she first took office in 2005 (58 per cent).

Yet this does not mean that the election result on 24 September is entirely inconsequential. The result will have a significant impact for two reasons: the composition of the coalition, and the impact on the Brexit negotiations and future EU integration.

These are two themes which I explore in my latest election review for the Legatum Institute, co-authored with Claudia Chwalisz from Populus.

The composition of the new Bundestag will see the Chancellor’s power diluted, as six parties are set to enter parliament. The interesting question therefore is the direction in which Merkel chooses to take her next government, as she will not win enough support to govern on her own.

A re-run of the current CDU-SPD “grand coalition” is not impossible, but neither party wants this. As Merkel once famously told David Cameron: “the little party [in a coalition] always gets smashed”.

Moreover, given the current state of opinion polls, it would also leave the rightwing populist Alternative for Germany (AfD) as the strongest party in opposition, with a powerful voice for the next four years – a situation similar to Ukip’s pressure on the British government, running up to the 2015 General Election.

Otherwise, the three main options are likely to be a “black-yellow” coalition with the economically liberal Free Democrats (FDP), a “black-green” coalition, or a “Jamaica” coalition with both the FDP and Greens.

The choice of coalition partner reflects a wider cultural struggle for the country. Migration, foreign policy, environmental issues and labour market regulation are some of the key dividing lines between the Greens and the Free Democrats. The former is to the left and the latter is to the right of the CDU.

It might be that Merkel does not have much choice in the matter if the polls are correct: small fluctuations of one or two percentage points will make all the difference. Each combination would result in very different policies.

The election will also affect the direction of travel of the EU. Were Schulz – who has spent his career in the European parliament – to become Chancellor, his instinct would have been to teach the UK a lesson for Brexit and to fully support president Juncker’s plan to increase the pace of European integration, outlined in the State of the Union address on Wednesday.

But Merkel understands that the success of the UK and the EU are interlinked, both politically and economically, so she will take a more pragmatic approach on both issues.

The ideal outcome for Britain is a coalition with the FDP, which holds the most favourable stance towards Britain in the negotiations, saying it would call for an amicable compromise in the Brexit talks.

On further EU integration, Christian Linder, their leader, has made it clear he does not support President Macron’s proposals for greater Eurozone integration and a common Eurozone budget, stressing the need for fiscal discipline.

He has also rejected the latest Greek bailout, calling instead for partial debt forgiveness on the condition that Greece is kicked out of the common currency.

There was relief in Whitehall earlier this year when Schulz’s surge petered out, and Merkel’s victory became inevitable. But ministers and officials will still be tuning in at 5pm next Sunday, when the result of the exit poll is announced.

And if the FDP look set to join a coalition, Brexit ministers might even raise a toast.

Read more: Angela Merkel says Brexit changed her view on the EU