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Germany's close election limits its ability to lead Europe
Ian Bremmer's Quick Take: Lots going on the German elections. Probably the most important though, everything around Europe and Russia and Ukraine and the United States kind of dominating the headlines right now. Germany went pretty much the way we all expected. The polls have been very, very steady over the course of the past couple of months. The big question was whether or not you could have a two-party or a three-party coalition that really depended on whether or not parties that were small would get over the 5% hurdle that allows them representation in Germany's parliament, in which case it would be harder to put together a government. You'd need three parties or whether they would stay out. The latter turned out to be the case. Didn't find that out until three A.M. in Germany. Very unusual how close in that regard the election was for those smaller parties, and that means you're going to get a grand coalition, a two-party coalition center-right and center-left.
They don't agree on a lot of policies. It is hard to get good outcomes politically from that kind of a coalition, but it's not unusual in Germany. The other big news, the Alternative für Deutschland performing about as well as they were expected to over the course of the past couple months, they came in a solid second. They won across former East Germany and they got single digits across former West Germany. But that's better than they performed last time around, even though their popularity has been high for a while now, certainly if you think about their trajectory over the some 12 years since they were founded, this is now a party that has a solid shot of being number one in 2029 next German elections, especially if the Germans are unable to turn their economy around. Though on migration, most of the German political spectrum has aligned with where AfD, more or less is just as we've seen across many countries in Europe, like in Italy and in the UK and France and elsewhere.
Okay. So that's the near-term outcome. Still a grand coalition is going to have a hard time spending a huge amount of money on defense or on Ukraine aid or on German growth. And there is some urgency in seeing if you can at least pass more German defense spending outside of their hard fast debt break while the present Scholz-led three-party coalition is in place. Why? Because there is a constitutional majority blocking capacity among the hard left and hard right parties, Die Linke and the AfD in Germany, which means that unless you get one of them on your side, you're not going to be able to do that spending. So the big takeaway here is Germany is probably going to have a really hard time really stepping up as a leader on doing far more in Europe for Europe than even you've seen under Scholz. It's going to be a more powerful government, but not the kind of power that they really need.
So here's a situation where Friedrich Merz, who will be the next German chancellor coming out immediately and saying that they can no longer count on the United States, that even NATO's existence as we look forward to the June NATO summit is open to question that Germany and Europe are going to have to have European defense without the United States, independent of the US claiming that American intervention in Germany's election in favor of the AfD considered by the other German parties to be a neo-Nazi party is as striking and dangerous in intervention and unacceptable as Moscow interventions into Germany's democracy. In other words, the German leadership, the next German chancellor, understanding that the US is an ally, believes that Trump and his administration is an adversary, is an enemy. And that is a truly shocking thing to hear from the incoming German government. Having said all of that, saying it is one thing, taking action to ensure that the Europeans are capable of defending themselves is quite another, and they're nowhere remotely close to that.
Macron in the United States today will be meeting with Trump shortly, meeting with him by himself. Kier Starmer from the UK later this week, same. Are their positions coordinated? More than they have been. But can they do enough? Can they put enough on the table in terms of financing, in terms of boots on the ground in Ukraine absent an American backstop? No, they can't. And I think as a consequence, the baseline expectation is that the US effort at rapprochement with Putin is going ahead. That the US effort of cutting a deal with Putin on Ukraine over the heads of the Ukrainians and the Europeans is largely going ahead. And this of course bodes very badly for the future of Ukraine and Zelensky, but also really does undermine the existence, the strength of NATO as the world's most important collective security agreement. I don't see Trump as wanting to end all military cooperation in Europe.
He just met with the Polish president. It was a very short meeting, supposed to be an hour was 10 minutes. But the important thing for the Poles was announced, which is the US is still committed to maintaining American troops on the ground in Poland. Why? Because Poland is not only very friendly to the US, but it's also moving towards 5% of GDP spend on defense in this year. And it's also said that they're not sending any troops to Ukraine in a post-ceasefire environment. Why not? Well, number one, because they need troops on the ground in Poland. But number two, because the Russians have said that they won't accept any European troops, and right now that's Trump's position. So Poland doesn't want to undermine their important defense protector, the Americans and President Trump. All of this is to say that there's probably going to be more division inside Europe as a consequence of these policies that Trump is putting forward. It's going to be very hard for him to maintain strong unity of Europe, even as they are facing more existential challenges economically in terms of their competitiveness, their growth, and most importantly in terms of their national security. So that's where we are right now. Enormous amount of news coming down the pike this week. Haven't even talked about the latest on Israel and Gaza and China and everything else. But if this is the big news, might as well cover it. Talk to you all real soon.
Friedrich Merz attends the closed meeting of the CSU parliamentary group in the Bundestag at Andechs Monastery, Germany.
Germany’s Merz steps into controversy
Friedrich Merz has reminded Germany and the world that his center-right establishment party, the Christian Democratic Union, is now in a tight spot. The party leader suggested in an interview televised on Sunday that the CDU would be open to partnering with the hard-right Alternative für Deutschland party, at least at the local level.
"It's natural that we have to look for ways to ensure we can continue to work together" in places where AfD members win local elections, Merz said.
In the process, he implicitly acknowledged the reality that the AfD is polling at about 20% nationally and at about 30% in Germany’s East. But he was also breaking a taboo against mainstream acceptance of a party that, according to Eurasia Group, our parent company, has embraced an “openly xenophobic, anti-democratic, pro-Kremlin agenda.”
That’s why Merz quickly faced a backlash from both inside and outside the CDU, and on Monday morning he used Twitter to backpedal. “Our decision stands: There will not be any cooperation with the AfD, also not at the communal level,” he tweeted.
But the damage was done. Merz hopes to become Germany’s chancellor in 2025, and his biggest challenge in defeating the governing left-wing coalition will be to hold together a party in which western state members treat the AfD as untouchable while those in eastern states treat it as a fact of life. With contradictory statements within a matter of hours, he’s not off to a strong start.
AfD holds "Future for Germany" rally in Erfurt.
Why is Germany’s far right surging?
For extremely obvious reasons, it’s always a little unsettling when the far-right is having a good moment in German politics.
That’s exactly what’s happening now as the avowedly anti-immigrant and Euroskeptic Alternative for Deutschland Party, known as AfD, is now neck-and-neck with the Social Democrats, the party of Chancellor Olaf Scholz. The AfD, which is polling at 19% (to the SPD’s 20%), is closing in on becoming the country’s second most popular political faction. The Christian Democratic Union Party still holds the top spot at 27%.
What explains AfD’s recent upward trajectory, and what does it tell us about the state of German politics 18 months after former Chancellor Angela Merkel left the stage, ending 16 years at the helm?
AfD’s raison d'être. Founded in 2013, the group’s main shtick at the time was agitating against the European Union’s planned bailout of indebted countries after the eurozone crisis. The founders wanted to ditch the single market and bring back the German Deutschmark. (Spoiler: It didn’t happen.)
But when millions of refugees starting streaming into Germany in 2015 in the aftermath of the Syrian civil war, the AfD morphed into an anti-immigrant – and anti-Islam – party and has since called for the German constitution to gut the right to seek asylum.
Evoking outrage has been par for the course for AfD party stalwarts, and in some instances, it’s perhaps the entire point. Consider that the AfD leader of the central state of Thuringia has called for Holocaust memorials to be taken down, while former party leader Frauke Petry once said that refugees should be prevented from crossing into Germany … by using armed force.
It’s in former East Germany – where grievances about economic inequality and second-class citizenship have festered since the end of the Cold War – that AfD’s populist, ethnocentric messaging has gained the most traction.
Still, when Germans last went to the polls in Sept. 2021, AfD was polling at around 10% on average, and the far-right group is now reaping nearly double that at 19%, having seen a four-point bump over the past 12 weeks alone.
“This is not a blip, and not some sort of short-term thing,” says Jan Techau, Germany director at Eurasia Group and former speechwriter to German Defense Minister Boris Pistorius. “We've seen buildup over some time, and now it seems like AfD is solidifying.”
So what explains this seismic shift?
Economic misery and the blame game. Anti-establishment parties almost always get a boost when the economy is hurting. Stubbornly high inflation over the past year – in large part due to the war in Ukraine – has provided an opening for the AfD’s populist message to resonate not only with the extremist right but also with disillusioned conservatives and those opposed to the status quo.
Indeed, although inflation has begun to ease, food prices are still up 15% year-on-year, an enormous strain for working-class Germans.
What’s more, that economic instability has coincided with a rise in asylum-seekers trying to reach the European Union this year by boat – from South Asia, the Middle East, and Africa – has presented the perfect boogeyman for populists and nativists across the bloc, including in Germany.
Consider that in the first four months of this year, initial asylum applications in Germany increased by 78% compared to the same period in 2022. This is in addition to the more than 1 million Ukrainians who’ve crossed into Germany since the war began, though these migrants don’t engender the same national scorn.
While public support for arming Ukraine is at 57%, AfD’s recent rise in popularity suggests that its argument that sanctions against Russia hurt Germany’s economic interests is resonating with at least some voters.
Many AfD backers are “disenfranchised conservatives who see no other alternative because they feel the mainstream conservatives have become too liberal” and aren’t responsive to their bread-and-butter needs, Techau says.
The traffic light turns green. The German coalition government that came into office in 2021 is a varied one. The three-party coalition, the first in Germany’s modern history, includes Scholz’s SPD, the progressive, climate-conscious Greens, and the business-friendly fiscal hawks of the Free Democratic Party. The coalition is known as the “traffic light” owing to the colors of its three members.
With the Greens heading the economy portfolio, climate reform has been at the forefront of the government's domestic agenda, even more so since Russia invaded Ukraine and the EU made a collective pledge to kick its Russian natural gas habit.
Accordingly, the government has sought to slow the use of oil and gas heating systems by 2024, mandating that new heating systems are powered by at least 65% of renewable sources. The government's push to install heat pumps in homes and offices – a very expensive undertaking – has resulted in a massive pushback that the AfD has naturally used to its advantage. (AfD parliamentary leader Alice Weidel has called the government plan a “heating massacre.”)
Techau says that failure to sell this policy to voters has perhaps been the government’s biggest downfall. “When they started to legislate, they were quite ambitious and weren't able to explain it in a way that convinced people,” he says, adding that “people started to react quite negatively to this.”
Extremism abhors a power vacuum. The departure of Merkel after almost two decades at the top left a pair of sensible brogues that no successor has been able to fill. While her CDU/CSU remains the most popular, its support has certainly been slipping since 2020. As a result, some conservatives susceptible to economic populism have been lost to the AfD in recent months.
Tachau says the fact that current CDU leader Friedrich Merz is very unpopular has been a boon for AfD. “He’s not seen as a possible future chancellor, and that means that a good number of voters will go elsewhere,” he says.
This dynamic is exacerbated by the fact that Scholz’s SPD never had that much of an edge to begin with – winning just 10 more seats than the CDU in 2021. Perceptions of Scholz as unable to control infighting with his coalition over how to roll out domestic policies have only added fuel to the fire.
“The ideological leanings and the clumsy craftsmanship of Scholz's coalition, especially on migration and energy, have massively aggravated the situation,” Techau says, adding that while “they are not to be blamed alone, as much of the anger is structural and has built up over a long time, the coalition's performance over the last 18 months made the whole situation boil over.”
Could AfD really rule? All of Germany’s major political parties have committed to putting up a Brandmauer – a firewall – between them and the AfD, meaning that they have agreed not to sit with the formerly fringe group in any governing coalition. But if the far-right party gets more and more popular, could that change by the next election?
For now, Techau doesn’t think so. “In Germany, the ghosts of the past are always quite present,” he says.
However, even though the AfD could be kept out of a government by other major parties forming a broad (and unstable) coalition, that too would only feed into the AfD’s narrative of ostracization and otherness.
Indeed, such a move “would only turn into a shallow mechanism to keep them out,” Techau says. His takeaway? “No matter which way you do it, you're doing it wrong.”
Police secures the area in Berlin after 25 suspected members and supporters of a far-right group were detained during raids across Germany.
What We’re Watching: German coup plotters, Peru’s self-coup, Xi’s Saudi visit, TSMC’s big investment
A thwarted German Jan. 6?
Is there a single German word for "narrowly averted right-wing coup attempt"? We aren't sure, but on Wednesday German authorities arrested 25 people accused of belonging to a domestic terror organization with plans to overthrow the government and replace it with German nobility in a throwback to pre-Weimar times. Some 3,000 police conducted raids in several German states as well as in Austria and Italy, detaining people associated with the Reichsbürger, a right-wing German conspiracy group, the far-right Alternativ für Deutschland party, and at least one Russian citizen. You’ll likely remember that a member of the AfD – a euroskeptic party that has capitalized on anti-immigrant sentiment in recent years to grow its base – tweeted after the Jan. 6 riot at the US Capitol that "Trump is fighting the same political fight — you have to call it a culture war." Harboring beliefs that Germany is being run by a “deep state'' (sound familiar?), the group reportedly planned to launch an armed attack on the Reichstag, Germany’s parliament. This is just the most recent reflection of a far-right extremist problem in Deutschland. Last year, the German government placed the AfD under surveillance for its far-right extremist affiliations, and early this year the government found that more than 300 employees in Germany's security apparatus harbored far-right views.
Peruvian president ousted after trying his own coup
Peru's Congress voted Wednesday to remove President Pedro Castillo after he tried to dissolve parliament and declared a state of emergency to rule by decree in a bid to thwart an impeachment vote. Castillo's sudden move sparked mass resignations within his cabinet and the military, while his critics called it an autogolpe or self-coup like the one former President Alberto Fujimori successfully pulled off 20 years ago. Back then, the army helped the right-wing strongman stay in power for a decade — but this time the leftist Castillo had neither the support of the army nor Fujimori’s popularity. By nightfall, he was arrested. In his 17 months in power, Castillo, a former schoolteacher who rides on horseback and waves a giant pencil, has taken political instability to a record high even by Peruvian standards — he’s reshuffled his cabinet five times, had six criminal probes filed against him, and survived two impeachment bids. What happens next? VP Dina Boluarte was sworn in for the top job as Peru’s first female leader, but she may not last long: Peru churned through three presidents in a month in 2020 almost a year before Castillo won a nail-biter runoff election against … Fujimori’s daughter.
Xi goes to Saudi
China’s President Xi Jinping doesn’t leave the country often these days, but on Wednesday he began a three-day trip to Saudi Arabia. Xi, the leader of the world’s largest oil importer, is expected to sign trade agreements worth more than $29 billion with the Saudis, one of the world’s leading oil behemoths. In recent years, however, Russia has surpassed Riyadh as the top oil exporter to Beijing, and Saudi Crown Prince Mohammed bin Salman is keen to address that. The trip will also include a China-Arab and China-Gulf Cooperation Council summit. Indeed, the visit is a sign of the deepening relations between the two states at a time when relations between the US and Saudi Arabia, longtime allies, have steadily deteriorated due to personal animosity between President Joe Biden and MBS. Crucially, Beijing is now Riyadh’s largest trade partner, with exports to China surpassing $50 billion in 2021. And earlier this year, MBS and Xi cemented a $10 billion deal to create a Saudi Aramco oil refinery complex in China. To be sure, these close ties have been in the making for some time as Saudi Arabia has sought to diversify its trade portfolio, and Beijing has looked for new ways to expand its global economic clout. Washington will be watching very closely for new signs of cooperation.
Taiwan’s big investment
Twenty years ago, the US produced 37% of the world’s semiconductors, a product essential for the functioning of everything from smartphones and automobiles to digital-age weapons and fighter planes. Today, that percentage stands at just 12%, exposing the US economy and its military to supply-chain problems that create dangerous shortages. Adding to the risk, about 90% of the world’s most advanced chips are now produced in Taiwan, a self-governing island that Washington treats as an ally and Beijing insists is a breakaway Chinese province. These are two of the reasons why it’s a big deal for the US that the Biden administration and Taiwan Semiconductor Manufacturing Company, the world’s largest chipmaker, announced on Tuesday that the company would more than triple its planned investment in a new US plant to $40 billion – one of the largest foreign investments in US history. TSMC has also pledged to build a second plant by 2026 that produces some of the most sophisticated chips currently in production. The plan will leave the US less vulnerable to the kind of chip shortages it saw during the pandemic and could see during any future conflict between China and Taiwan. Nor will it hurt President Joe Biden that this investment will eventually create thousands of tech jobs in Arizona, one of the most hotly contested battlegrounds on the US electoral map.