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Currency, United States Finance

Merkel's political future may hinge on one big gamble

German Chancellor Angela Merkel started her unprecedented political career with a risky act by breaking ranks with her supporter and former leader Helmut Kohl. And she might also end her career in politics with a risky act by now preferring snap elections over a minority government.

“I don’t have a minority government in my plans, but we now have to wait for what the coming days will bring,” Merkel said in an interview with broadcaster ARD on Monday.

Talks between Merkel’s CDU (Christian Democratic Union), the pro-business FDP (Free Democratic Party) and the environmentalist Greens fell apart at the weekend with lawmakers citing irreconcilable differences. This would be the first time since World War II that a German election hasn’t produced a government.

While Merkel is not a risk taker or a gambler, she can take bold decisions. And the time for another one seems to have come about again. Considering all the constitutional constraints though, snap elections are not likely to happen before February.

“Mid-February would be the earliest possible date for snap polls,” said Carsten Nickel of Teneo Intelligence in a research note.

“The exact timeframe, however, depends on how quickly (President Frank-Walter) Steinmeier proceeds in the coming days towards proposing a candidate for chancellor to the Bundestag.”

The dominant narrative in Germany is that the FDP has ruined the deal without need and are therefore responsible for this unprecedented situation.

Both the CDU and the Greens say that the FDP called off the talks on purpose. Indeed, the FDP leader Christian Lindner, had a well-prepared speech when he “spontaneously” walked out.

What this narrative undoubtedly does is weaken the FDP ahead of a potential new election. Germans don’t like irresponsible behavior.

The same holds true for the Social Democratic Party (SPD). It is also blamed for not taking on its responsibility to put the “nation first, and the party second” in times of crisis as Gerhard Schröder, the former chancellor, once said. The SPD has stated repeatedly that it wants to stay in opposition and rebuild rather than join a coalition government.

Merkel, even in her weakened position, seems to have understood this easy truth. She said she will keep her promise to run again even in new elections. And the CDU and its Bavarian sister party the Christian Social Union (CSU) — despite all the past criticism — seem to be closing the ranks around her.

Inside the CDU party, hopes are high that Germans again in insecure times will support their long-time leader, rather than trying another experiment.

But another uneasy truth of the past two years is that voters are no longer easy to predict. Even if the odds look positive for Merkel, new elections are also a big gamble. One, she seems, to be ready to take.

For more insight from CNBC contributors, follow @CNBCopinion on Twitter.

Source: cnbc
Merkel's political future may hinge on one big gamble

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