From PINR
One month after the German general elections, the German parliament met for the first time on October 18. As expected, the Christian Democratic Union and Christian Social Union faction (C.D.U./C.S.U.) and the Social Democratic Party (S.P.D.) agreed to form a "Grand Coalition," even though during the election campaign both sides said repeatedly that they wanted to avoid such a scenario. Angela Merkel, who is the new chancellor, and her C.D.U./C.S.U. partners have appointed six ministers, while the S.P.D. will appoint eight.However, many German and international specialists believe the negotiations could last another month, and -- which is more alarming -- there is widespread belief that such a Grand Coalition will not succeed in carrying out a coherent set of economic, industrial and foreign policies because of the inevitable inner battle between the two big parties. [See: "Angela Merkel's Forecasted Win and Germany's Foreign Policy"]
Conclusion
The German political situation reflects the country's basic characteristics in the post-Cold War era. However, such characteristics can change, but its pace will probably be slow. With a Grand Coalition, better relations with the U.S. can be expected, but this will not necessarily mean that a structural change will occur, especially as the S.P.D. is set to maintain the Foreign Affairs minister.
On the economic front, Berlin needs to maintain its historical leadership in exporting high quality goods to the world, but also must guide the euro-zone by being a credible political and economic leader. In order to do so, some reforms are needed, but if the price to pay is the end of Germany's social agreement, national elites may accept a "trade off" between a diminished capitalist vitality and the preservation of its social model. Today's Grand Coalition may be seen precisely as the concrete political representation of these concerns.
The fundamental lesson of the Schroeder years has been that preserving the German social model is still decisive to gain and maintain consensus. Any dramatic change in the next two years looks far from likely. The real question is whether the Grand Coalition will prove viable and last for a significant period of time, and what political changes could result from possible collective failure of the "traditional" parties.
