Analysis

Coalition without consensus: Germany in 2015

22 Dec 2014
|
Region: 
EU/Eurozone

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For almost exactly one year the German Grand Coalition government has preserved Angela Merkel in power and handed the centre-left SPD exceptional influence over energy and microeconomic policy. The trade-offs at the heart of the coalition were possible only because apparent German economic strength allowed a ‘consensus’ on simultaneous fiscal discipline, expansive energy spending and a deepening of the German social safety net. 2015 will be the year that this consensus starts to unravel, as Germany comes under increasing economic pressure. Both sides of the coalition are now focused on reasserting their own diagnosis and prescriptions for German growth and Ms Merkel is perched above this fracturing partnership. Can she control it? What choices will it force on her? And given Germany’s centrality to policy choices at the European level, what does this German domestic landscape imply for the rest of Europe?

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