Vote to end German political instability is essential
Acceptance of a coalition deal with Angela Merkel by the Social Democrats will end uncertainty and be of benefit to China and the global economy
China and the European Union count on Germany having a strong government to ensure global stability and growth. A provisional coalition agreement between chancellor Angela Merkel’s Christian Democrats and Martin Schultz’s Social Democrats raises hopes that almost five months of political uncertainty could soon end.
Members of the latter will vote early next month on whether to accept the deal and they would be wise to approve it. To do otherwise could have dire consequences for closer European integration and more widely, open economies, multilateralism and global governance.
Schultz was under pressure from his party not to again join a Merkel-led government; previously as a junior partner, it has lost voter support and the ability to forcefully push a pro-EU agenda.
But the chancellor could not allow the world’s fourth biggest economy to endure for much longer without a government and was reluctant to limp on as a minority leader or face another election, so offered enticing incentives.
She has handed over the key finance and foreign ministries, giving the Social Democrats significant power and influence and perhaps hastening the end of her chancellorship.
Among them are structural weaknesses in the euro, rising nationalism that opposes greater European integration and ailing southern economies.
China has every interest in seeing such problems dealt with; it needs the 28-nation grouping to help promote multilateral trade and globalisation, for its belt and road initiative, to attain climate change targets and reform the global governance system.
Together, China and the EU account for a quarter of the world’s population and a third of global GDP.
Germany has great economic and political power within the EU and is integral to ensuring the grouping’s success.
Complicating matters is Merkel’s weakened standing and Schultz’s decision to step aside as party leader and not to take the post of foreign minister. Elections in Italy on March 4, the same day the results of the Social Democrats’ referendum are to be announced, increase the uncertainty. But with German political stability in the balance, a vote of approval is essential.