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Merkel and SPD Agree to Grand Coalition: Ratification a Tossup at Best

After weeks of bickering, Merkel and SPD agreed to form another grand coalition. The hard part is next: ratification.

German Chancellor Angela Merkel and SPD leader Martin Schulz finalized a "Grand Coalition" Deal this morning.

Resurrecting the “grand coalition,” the SPD will take control of the foreign, finance, and labor and social affairs ministries, while the CDU will have the ministry of economic affairs and the ministry of defense, according to BILD.

Around 450,000 SPD members still have to agree to the deal, a process expected to take around three weeks. Only after ratification will the new federal government formally come into effect.

Now, the Hard Part

That Merkel and Schulz would agree was a near given once the talks started. After all, both are fighting for their political lives.

That it took this long to reach a deal was problematic. And opposition to the deal is mounting.

Eurointelligence Comments

Yesterday was the last day on which non-members could join the SPD and be eligible to vote in the referendum. Since the beginning of the year, the party has gained over 24,000 new members, about 5% of its previous membership. We cannot be entirely sure, but it appears to us that the vast majority - we think over 90% of those - have joined the party to vote against the grand coalition. We always thought that, if the party were to approve the grand coalition agreement, the vote would be close. In that context, 5% here or there is not a trivial number. In the Brexit referendum, it would have swung the vote in the other direction.

Nothing Grand This Time

Even if the rank and file approve the referendum, there is nothing "grand" about this coalition. Recent polls show there is less than 50% combined support for SPD and CDU/CSU.

The compromises it took to reach this deal displeased rank and file in both parties. Both Merkel and Schulz will likely be ousted if this referendum fails.

It remains to be seen is that is a plus or a minus for the referendum approval.

Mike "Mish" Shedlock

Q: Does the CDU/CSU membership get a ratification vote as well? If so, what are the chances of a CDU/CSU membership "yes" vote?

In a federalized EU, Merkel would be the equivalent of governor Cuomo or Brown. Just the head of a large state.

There will be a CSU ratification in the form of local elections in Bavaria, where the party limits it's reach (by agreement, the rest of Germany is CDU territory). Will see how this coalition goes down with voters. Since the elections in the fall, the lefty SPD sank even further, as did the conservatives-in-name-only CDU/CSU, according to the polls. So they have no choice if they want to continue in the destruction of the once powerful country.

No CSU referendum - The SPD referendum was a promise - I think it could be canceled but I am not sure about that. Some challenged the legality of it.

Schulz's less than easy task is to convince SDP members that endorsing the coalition deal will see his party well-placed to assume sole governance in a couple of years time when Merkel goes and the coalition collapses, perhaps triggered by evident voter dissatisfaction in general or some disagreement within the coalition on a point of policy of great concern to voters. In other words, Schulz's message has to be let us cosy up to the Union now in order to defeat it in the near enough future. There might be some historical precedent offered by Brandt, who entered a grand coalition with Kiesinger only to replace him as head of an SDP led government (with the FDP) in 1969. Tricky for Schulz, especially given the SDP's present unpopularity and his own.

(edited)

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