The German Federal Election: Will Angela Merkel Stand Her Ground?

The German Federal Election: Will Angela Merkel Stand Her Ground?

Fabrizio Bensch/Reuters

More on:

Germany

Elections and Voting

European Union

United States

Politics and Government

Experts analyze the September 24 German federal election, Angela Merkel's fight to win a fourth term as chancellor, and the implications for Germany's relations with the European Union and the United States.

STOKES: Good evening, and welcome to our CFR session on the upcoming German election. I know you are all on tenterhooks to see who’s going to—in our prediction here who’s going to win.

My name is Bruce Stokes. I’m director of global economic attitudes at the Pew Research Center here in Washington and a former senior fellow at the Council on Foreign Relations.

We have with us today, to my extreme right, Helga Barth. This is not a comment on her politics, because she’s the minister—(laughs)—and head of political affairs at the Embassy of Germany here in Washington.

Next to her is Karen Donfried, who many of you may know is the president of the German Marshall Fund and my former employer. (Laughs.)

And next to me is Helga—Holger, what am I saying?—Holger Stark, who is the editor of Die Zeit and the former Washington Bureau chief of Der Spiegel here in Washington.

The question we’re going to talk about this evening is: Will Angela Merkel stand her ground in the German election, and what this means for Germany and for transatlantic relations after the election. We are—as we said, this is on the record. We are pleased to welcome CFR members from around the country and actually around the world who are participating in this meeting via livestream, so this is an international gathering.

And I’d like to kick it off, if I could, by asking Helga first, if you could. I would say most of the people, most of the members here and those who are listening online, probably understand the German system a bit or they wouldn’t be interested in the election. But just for those who might not be so familiar with the German electoral system, could you briefly explain to us just how it is that the Germans choose a new government, with maybe a little history on what happens after the election in terms of forming a government? Because my recollection is sometimes this can take a long time when there’s a coalition.

BARTH: This time it will take a long time, yeah.

STOKES: Yes. Yeah.

BARTH: OK. Well, thank you—thank you very much for inviting me to this—to this event. Thank you to the organizers. And I’m very—I mean, I’m intrigued that you’re all interested in the German elections, of course. (Laughter.)

STOKES: It’s such a small and insignificant country. I’m not sure why either. (Laughter.)

BARTH: Small and—absolutely.

Well, our system is actually a very resilient one. We just talked about that briefly. We owe this to our—to the American—to the American government, our allies, because it’s not actually a system that perhaps in the postwar period we would have chosen ourselves. But it’s greatly crafted because there is no absolute power, and voters actually don’t get to vote for the chancellor. So this is a huge difference, also, to Austria, for example, and of course it’s different with the American system.

So we vote for parties. Parties have candidates in the—in the districts. And every voter has two votes. So one vote you—if you’re smart, you give it to one of the larger parties because small parties never—just never make it past the 50 percent threshold or never make—never make the majority, I would say. It’s not a 50 percent—they never make the majority. So this is the directly—the person who’s directly voted into parliament. It’s 598—while there are exceptions, I don’t go into that because then it gets—it becomes pure math—598 members of parliament, huge because Germany’s a tiny country in comparison to the U.S., 61.5 million voters. And half of the seats in our parliament are people who are directly voted into parliament. So this is either CDU or SPD, as either Chancellor Merkel’s party, the Christian Democrat Union, or it’s the Social Democrats. And there was one exception for a couple of years. This was someone voted for by—a Green candidate in Berlin, and then of course there are the PDS and Die Linke members of parliament who are also directly voted into parliament. And 299 people are—they are on lists that are set up by their parties, and they are not directly into—voted into parliament.

So this is how we do it. And we usually—Germans like voting, I mean, in comparison to some other people. We just looked at our—Holger just looked that last time it was 70—

STARK: Seventy percent.

BARTH: Participation was at 70, 71.5 (percent), and we thought it could have been higher. We don’t know about the 24th of September. Given the choices, perhaps it could be under 70 (percent). But we—well, we are optimistic.

STOKES: Bear in mind that’s higher than the United States by a long shot. (Laughter.)

BARTH: And then this morning I really thought very carefully what I should wear because there are no uniforms for German diplomats, of course, but all colors in German politics play a role, so. (Laughter.) And you can now read in newspaper articles: Last time the chancellor wore a necklace that was black and green, so this was an indication that she would have preferred to be in coalition with the Greens instead of doing another grand coalition with the Social Democrats. So all colors are political. Orange, CDU. Green, of course the Greens. Yellow, this is the Liberal Democrats, who probably will make—we have a 5 percent threshold—will make—I mean, they will be—they will be in parliament again. Other colors: AfD, a new party, right-wing I would say, populist, what is their color?

STARK: Blue.

BARTH: Blue. Blue, sorry. (Laughter.) I didn’t think about that. This is—this is Foreign Ministry—

STOKES: Yes. (Laughs.)

BARTH: I thought about Foreign Ministry blue. This is the color of my ministry, so I’m still on the—on the safe side. (Laughter.)

Bruce asked me to say something what’s going to happen after the elections. They all sit down. We’re going to know the results by 24th of September—it’s a Sunday—12.8—at 12:00 p.m. and 10 minutes, because then they’re going to publish the exit polls. They’re usually quite exact already. But then this is about we’re going to have another coalition government, and all colors or almost all colors come into play. Will it be another grand coalition? Possible. Will it be a coalition between the chancellor’s party and the Liberal Democrats and the Greens? So this is open. But what we all know, it’s going to take a long time because for all coalitions, sitting down they ask all kinds of stakeholders what are we—I mean, what is really essential for—what could be essential for this government, and then they write up an agreement. And this is really negotiations where you—I mean, you need time. And you’re going to see the next German government by end of November if you’re optimistic, early December if you’re a bit more pessimistic. It’s going to take time.

STOKES: Thank you.

Holger, let me ask you a question. Could you give us a little background on the parties and the candidates, and more importantly your assessment 10 days out on how this is likely to unfold and what do you expect to be the outcome? And are there going to be any surprises?

STARK: Yeah. Thanks, Bruce, and also for the invitation. It’s great to be with you guys here.

So let me start with the boring stuff: Who will be the next chancellor? (Laughter.) It will be Angela Merkel if no miracle happens.

The more interesting question is: Who will be the party to team up with? And I think it’s worth to watch two smaller parties. That’s the Green Party and that is the Liberal Democrats, because they are the preferred potential coalition partners. That says something about the shift in German politics over the last 10 years, because the Greens, who were never considered to be a good partner for a conservative party, now they are. Everybody can imagine that they will make it into the chancellery, including the conservatives in the CDU. So the question will be: If the CDU comes between 35 and 38 percent, will the Greens make something like 10 percent, 11 percent, and would that match the 50 percent to form a new government?

STOKES: Just to be—just to be clear, my understanding is you don’t need quite 50 percent.

STARK: You need the majority of those 598 seats.

STOKES: Right. So it can be slightly less than 50 percent.

STARK: Exactly.

STOKES: Yeah, yeah, yeah.

STARK: It could be 47, 48 percent. That could be enough. So—

STOKES: Yeah, yeah yeah. For those of you who want to do the math, you know, right? (Laughter.) Yeah.

STARK: And there are a lot of people, especially within the Green Party, who are—who are doing the math right now because they all want to be in power. So the Greens could be one option.

The Liberal Democrats could be another option. Remind yourself they didn’t make it the last time, so it’s a pretty brand-new party, although they are—they have a long tradition. But the leading figures, they all exchanged. There’s a young charismatic leader, Christian Lindner, who’s playing it very smart and who will play definitely a very important role in the next parliament. And the question is, are they mature enough to make it to 10 to 11 to 12 percent? And then former black-yellow coalition, as we—as we tend to say, which would be a coalition of a little bit more conservative values combined with a free-market approach. We had this in times over the last decades, several times in Germany, so that wouldn’t be a big surprise.

But the big question, the white elephant in the room, that is the question how the right-wingers that Helga mentioned already, the Alternative für Deutschland, AfD, will come into play. They never made it into the German parliament, so there is no history on that. We were pretty sure have it for the first time since World War II that a right-wing party—an extreme right-wing party will be a member of the German parliament, and they even could make it into the third place. They are in the polls around 10 (percent), maybe 11 percent. There’s an unpredictable number of people who will vote for them. It could be 12 (percent), it could be even 13 percent. And that would change not the next government, but it could change the whole rhetoric that we see in German politics. It would change the dialogue. It would funnel a lot of money into that.

STOKES: You didn’t seem to think that there’s a good chance for a grand coalition again. Is that what you’re saying? And that’s just the SPD and the CDU together. Why would the SPD not want to do that? Why would the CDU not want to do that?

STARK: Well, the numbers would add up, definitely. It would be 35 plus something percent and 24, 25 (percent) for the Social Democrats, so the numbers would work. But the country is tired of a grand coalition.

The SPD is bleeding out. They lost over time. Merkel is just too strong and too smart chancellor for junior partner to grow as a part of that coalition. So no one really is waiting for that. And even the Christian Democrats are mostly tired of that coalition. So that is the least option that everybody would prefer.

It could be that the math at the end of the day shows this as the only possible opportunity. But if possible, all parties would stay away from that.

STOKES: Karen, you run one of the major German-American think tanks, and you’ve had the European portfolio of the National Security Council in part of the Obama administration. What do you think are the implications for German-American relations and transatlantic relations of a renewal of the Merkel mandate? And do you expect any new developments in U.S.-European relations in the wake of the election, say with regard to Russia or NATO or any of the other kind of issues that seem to be at the center of the transatlantic relationship these days?

DONFRIED: Well, it’s—I want to play off something that Helga said, which talked about how resilient the German system is and about the boring outcome, which is Chancellor Merkel continues on. I think, from a U.S. perspective, we all focus on Merkel because we have a presidential system, not a parliamentary system. And the fact that Angela Merkel has proven to be as resilient as she is and this is now a boring election is surprising. If we a year ago had been having this conversation, we would have said, boy, is Angela Merkel a spent force. She’s closing out her third term as chancellor. Germans have had it. I mean, that crazy refugee policy she pursued, which was so unpopular. And the fact that she is far and away the most popular politician in Germany 10 days before the election is really striking. So I just think we should remind ourselves that this was not a foreordained outcome. And this woman, whom one would have thought an unlikely chancellor from the beginning—a woman running for the Christian Democratic Union who is married, divorced, remarried, has no children; who is from the East; who’s a scientist. So she is quite a striking political figure in Germany.

STOKES: And in our—in our survey in 10 European countries, she could be the leader of any of those countries.

DONFRIED: Yeah.

STOKES: I mean, she could win in the election.

DONFRIED: And we think about American publications that have talked about her as the leader of the free world and the expectations of her across Europe. If she wins, what does that mean for the European project? So just a moment that it may feel boring right now, but it’s actually quite something that we’re at the place we are.

And, you know, because Americans are only focused on Merkel, they’re not thinking about what Holger was talking about, which is the coalition. And this continuity at the top that we’re very likely to see I would argue masks important political shifts in Germany. There are going to be seven parties in the German parliament, which we’ve never seen in the postwar period.

We’ve talked about the shock of one of those parties, a far-right party. There’s not been a far-right party in the German parliament since the end of World War II. And not only are they going to cross that 5 percent threshold—so this was one of the innovations to keep small parties out of the German parliament, was to set this 5 percent threshold—it gives them a lot of benefits if they are in parliament. And it looks like they may be the third-largest party in parliament. So if you did have a grand coalition, which may be unlikely, your leading opposition party would be the far-right Alternative for Germany.

So that, in my mind, is significant because the forces that we see roiling our own country and roiling every European country are there in Germany. Yes, the majority of German voters are likely to choose stability and security. But these forces that, you know, citizens feel they are losing their identity through migration, through globalization, that’s there, and it’s being expressed in the vote for the AfD and the vote for Die Linke. And we just should not forget that.

The current grand coalition—even if you had another grand coalition, the current grand coalition government in Germany has 80 percent of the seats in the German parliament. A grand coalition won’t actually come close to that if it were to be reestablished because of these many other parties that are going to be there.

Now, what does that mean for the U.S.? I think for President Trump, frankly, it doesn’t matter. He has two main issues he cares about when he looks at Germany. One is what he calls a massive trade surplus, and the second is far too low defense spending. And he is going to continue to beat that drum. Merkel as chancellor, she has already said 1.2 percent of GDP is not enough for German defense spending, and by 2024—(laughs)—will hit 2 percent of defense spending. That’s not—

STARK: When I retired.

DONFRIED: Right. (Laughter.) That’s not going to be a happy answer for President Trump.

And just so you understand the magnitude of that, if Germany hits 2 percent of defense spending, that would be an additional $30 billion of defense spending, given the size of the German economy. And the trade surplus is going to continue to be a very difficult issue.

STOKES: Well, let me—let me ask you a follow-up question, though. In our most recent survey, only 11 percent of Germans have confidence in Donald Trump and only 35 percent have a favorable view of the United States. Now, that’s a drop of 75 percentage points in confidence in the U.S. president and 22 points in the favorability of the U.S. Those are the two biggest drops we’ve ever seen in U.S.-German relations. Now, how does—and any of you can answer this question—but you’ve got a German government, democratically elected, whose voters are telling them, Merkel will say as the chancellor, that we don’t like the United States and we don’t have any confidence in the U.S. president. So how does the German leader then try to work with the United States—(laughs)—in that environment?

DONFRIED: Well, so Bruce has a deep history in public opinion survey research. Do you think a drop like that is statistically significant? (Laughs.)

STOKES: Our methodologists suggest to me it might be, yes. Yeah.

DONFRIED: So I think the Trump factor is fascinating in this election because the Social Democratic candidate, Martin Schulz, has tried to use President Trump’s lack of popularity in Germany to his benefit by saying Chancellor Merkel has been far too cozy with Donald Trump, and that’s why you need me. But if we’re honest, Donald Trump has helped Angela Merkel because the fact that Germans don’t trust us right now means that they reach back to the person they know best and trust most, who’s Angela Merkel. And, you know, the nickname for her in Germany is “Mutti,” you know, “Mother,” and she is that symbol of stability.

So it’s interesting because it really has played both ways, and she’s been critical of certain things that President Trump has done. It came up, of course, in the TV duel. And I think we could debate whether “duel” was the right noun to describe that debate. But when Martin Schulz was raising this issue and being very critical of Donald Trump, she said, look, there are a lot of things he’s done that I don’t like—whether that’s withdrawing from the Paris Climate Accord, whether that’s Charlottesville—but she continues to believe this relationship with the U.S. matters profoundly for Germany, and she will do her best to have that be a constructive relationship. And much as Germans say they don’t like President Trump, I think they probably share that basic tenet. But you, as Germans, should speak to that.

STARK: No, I agree, Karen. I think Karen is right.

I think after the election some things will change, definitely. If you look at the small parties from the left and from the right, they both ride the ticket of being close to Russia. Don’t forget how close Germany still is just geographically towards Russia. And the AfD and the leftists, they both have an important wing which is very much in favor of constructive relations towards Russia. So we will have smaller parties in the parliament which will push constantly to reach out to the Kremlin and try to lower the tone, to lower the sanctions, and to get something achieved with Russia.

And both bigger parties tried to distance themselves a little bit from the United States during the campaign. Martin Schulz said if I’m going to be elected as the next chancellor, I will demand the withdrawal of the American nukes from German soil, which is a big thing still. And Angela Merkel, you remember that famous speech that she gave in the beer tent in Trudering on May 28th, where she said, well, we have to realize that we are a little bit on our own now, and that we have to take care of our own security. She said it in her very moderate tone and her very decent language. And I agree fully with Karen that she sticks to the transatlantic relationship, but nevertheless there’s a new pragmatism in Germany all over the place, even in the chancellery, that something in foreign policy has to change for Germany and that we can’t rely any longer on the transatlantic solidarity because we don’t know how predictable President Trump will be. So I expect some significant changes within the next government.

STOKES: Helga, part of your job is to explain Washington to Berlin, and part of your job is to explain Berlin to Washington. And we all, you know, have empathy for you as a result. (Laughter.)

BARTH: Thank you very much.

STOKES: But, you know, this relationship has had its problems in the past: the Vietnam War; under Reagan, we had those debates over missiles; under George W. Bush, it was the Iraq invasion; under Barack Obama, it was the NSA spying scandal. You know, we don’t know what will happen in the months ahead in U.S.-German relations. But there are some things that are looming that directly could result in tension in U.S.-German relations. You’ve got the threat by the White House to not certify the Iran deal, and we know from our surveys the German public wants to keep the Iran deal. We’ve got the potential, at least, that Congress might ratchet up the sanctions against Russia. And there is the question of action on steel that could directly hit German economic interests. How potentially destabilizing is that in German relations, do you think? And if anybody else wants to jump in, too.

BARTH: Yeah, we—well we—thank you for your sympathy. We actually have to do a lot of explaining on both sides. We do a lot of explaining about the EU, what the EU really is here, a lot with staffers on the Hill who don’t always deal with the EU, but really with people in the administration because they fairly new, and we sense there is—there’s a somehow new hostility towards the EU. And our identity is really a multilateral one. I mean, Germany and the EU, Germany in NATO, Germany in the United Nations. Very often, we just—if you give us roles without these larger entities, we feel very insecure and don’t know what to—how to respond to that.

What I found quite intriguing in both platforms of the Social Democrats as well as the Christian Democratic Union is that the U.S. is now a partner only, and at least the Christian Democratic Union has the U.S. as a friend always before. I don’t know whether this is very significant.

We had expected that the U.S. would be more—and especially President Trump—would figure more prominently in our election campaign because there is much—I mean, sometimes you get a sense there—we are almost the antithesis to what the president has in mind. I mean, we are—we think multilateralism is actually a good thing. Climate policy, withdrawing from the Paris Agreement. Get a handle on the—at least on the nuclear program because do you want to see Iran with the nastiness in its regional role, to add a nuclear dimension on that? So there are really many issues.

Actually, I don’t think that relations are becoming so—maybe I’m accustomed now to this new mode in working in D.C. I don’t know. I’m not so worried what—that we could—we could get on a new level or there would be a new dimension after the elections, because we have to take the long-term perspectives.

And there—of course there are issues where there’s a shared interest. And the steel issue seems to be off the table, at least for now. But I mean working on—we have joint interests vis-à-vis China, for example. And people who are in this city who are worried about the German trade surplus, they don’t mind to discuss trade issues with us because we share the same experiences. We don’t find an open market for our products and our companies in China. So that’s something we focus on.

Where do we have interests in common—that’s important.

STOKES: That’s great. Unless someone else wants to jump in here, I think I’ll turn this over to the—to the audience.

At this point, what we want to do is invite members to join our conversation with questions. I would remind you this session is on the record. This is not Chatham House rules or—we never really agreed on whether we call them CFR rules, but we in the old days used to call them Chatham House rules. But this is on the record. If you could wait until you—a mic is passed to you. And when you ask your question, if you could give us your name and your affiliation so our questioners know who’s asking the question. And if possible, direct the question at a particular panel member so everyone up here doesn’t feel obliged to answer every question, because then we’ll only get three questions done.

But who would like to go first? And one question at a time, please. Amitai.

Q: Amitai Etzioni, George Washington—I’m sorry—Amitai Etzioni, George Washington.

Some of us believe that new French proposals to integrate the economic agenda of Europe even more, which Merkel is supporting, is like pouring gasoline on fire, the fire being that it’s a high level of economic and administrative integration not followed by genuine community-building. So most people still identify with their nation. And if you have such highly centralized economic control, you have to impose pains on nations, such as Germany for Greece, or quotas on immigration. And so it should—from a sociological viewpoint, you want the opposite. You want to scale back a little on economic integration, build up community-building.

Now, the saving grace: I heard that Chancellor Merkel will drop these ideas after the election. So I’d like clarification on this.

BARTH: I didn’t understand. What did you say, what she’s going to drop after the elections?

Q: I want to know if you agree that the French proposals make things worse where they are bad enough. (Laughter.)

BARTH: I can’t—I can’t speak to that.

STOKES: Let me ask—

Q: I don’t think an embassy member—

BARTH: That’s a question—that’s a question for Karen. (Laughs.)

STOKES: Yeah, let me—let me raise that more broadly about, you know, would the German public support that kind of move and let’s give the government some space to do something?

DONFRIED: I think it’s probably dangerous for you to comment on whether—

STOKES: Yeah, yeah, yeah. But one of—one of you. Yeah.

DONFRIED: So, you know, what I think is interesting about this is it has been suggested that if Macron delivers domestic economic reforms, then a reelected Chancellor Merkel and whatever coalition will then make concessions in terms of eurozone policy: a common eurozone budget, one economics or finance minister for the eurozone, et cetera, et cetera.

And it’s never been clear to me that Macron and Merkel mean the same things. So that’s going to be very interesting to see after September 24th, because there’s been speculation that what Macron sees when he talks about a common budget is more resources for France and Southern Europe, but that what Germany sees through these mechanisms is actually exercising discipline on Southern European policymakers sort of by using them as methods for German policy preferences.

So it’s not entirely clear to me that they’re talking about the same thing or perhaps they’re talking past each other.

You may have—

STARK: No, I fully agree. I think the good thing is that there’s a clear commitment from Macron’s side to Europe. Probably Merkel will make no clear decision right now, and I have my doubts if this is something that should be achieved soon. But the—

STOKES: Not sure the German finance minister would support this, right?

STARK: Well, I’m pretty sure he probably wouldn’t. But what we—what we are seeing right now is—reemerging as a French-German bridge as a backbone as the future of Europe. And that’s definitely something we need in Europe.

STOKES: Over here. Yeah.

Q: Hi, Frances Cook at State Department and now consultant.

Merkel has been very courageous in her leadership on the Ukraine effort in Europe. I keep seeing hints, particularly in European media, that she’s getting tired of the role, that German companies are suffering a lot because of the Russia sanctions. Like, 500, I think, offices have had to close in Russia, and there’s concern about this new pipeline.

German businesses are very important for her political success. Do you think she might put this role a little bit lower on her priorities after this election, or do you think she’ll come back reinvigorated?

DONFRIED: My view—this is the non-German—is I think she is very committed to continuing to pursue this policy. I think Angela Merkel in many ways is a conviction politician. We often don’t think of her that way, and she’s often talked about as—I mean, when you were—when we were answering the other question, you know, there’s this verb now in German, “Merkelen,” which means that instead of taking a big decision, you actually don’t take it and you sort of kick the can down the road and you change your policy over time—

BARTH: You listen to people and—(laughter)—

DONFRIED: —and build a consensus and—

BARTH: Yeah, it’s important.

DONFRIED: But you know, if you take that example, she decided her policy on sanctions against Russia knowing she did not have the support of most Germans for that policy. And she has stuck to it from the moment that Russia illegally annexed Crimea, Ukraine’s sovereign territory. And we’ve seen her stick to it even when there was a change in U.S. leadership.

So my expectation is that unless there’s a change in Russian behavior, she will stay true to that. And it’s very important because you would not have a consensus among the 27 or 28 EU member states without Merkel playing that role, because there are smaller EU member states who would like to see those sanctions lifted, and she’s the key member state in that.

STOKES: In the middle here.

Q: Tom Petri, a member of the Council.

I think my question is for Mr. Stark but maybe others on the panel. Could you discuss a little bit the difference in the voting attitudes in East—in former East Germany and the main part, and whether they’re converging, and what the differences are going to be or expected to be in this election?

STARK: Yeah, thank you very much. Good question. Important question. And there’s still a huge divide between the former east and the former west. In East Germany, in many parts the social democrats are a really small party, sometimes even in one-figure digits. We will see the left party still in a very strong position, and we probably will see the Alternative für Deutschland on the right hand in a very strong position.

So the extremes are way stronger in East Germany, and the center is way weaker. So that—more than 25 years after the wall came down, there is still a huge divide, which is—which is stunning.

STOKES: Let me tell you, from our surveys in Germany over the years, except for this year for reasons I can’t explain, every year on almost every question, there was an east-west divide so that a generation after unification, there were still two Germanies on values questions, on policy questions, which is a profound challenge, obviously, to trying to govern the country.

Q: Trudy Rubin, the Philadelphia Inquirer.

Just following up a little bit on the last question, how did Angela Merkel get past the migrant/refugee issue? It does seem almost miraculous. And is it that Germany has somehow figured out how to integrate, or are there other issues that subsumed it? And does she have a formula that’s going to allow her to keep floating above the choice that she made?

BARTH: I think it’s actually—it’s actually various reasons. The numbers are down. I mean, the—we don’t have this huge influx of refugees any longer. And you see the government working very hard on various issues that are related to that. And that’s—there you see this incremental approach where the chancellor really excels. I mean, there is disagreement with Turkey to hold back refugees. There are now agreements with various North African countries to hold back refugees. And actually, I—there’s something, like, well, so-to-speak, buffer zones, buffer countries, and the Balkan route is closed, and people are sent back to their countries of origin. I mean, this is not huge numbers, but you see the—you see more efforts on the side of the government. And then people are—I mean, there’s a lot of training, language courses for those people who came in 2015.

But the—I think everybody sees a huge—a huge challenge, and it’s—I mean, this—it’s not a challenge for this year or next year. It’s going to take a generation. Everybody knows about that. And in the meantime, people hope that at least in Syria at some point people will go back. I mean, some people will think that their future might be—might be back home in their home country when we reach peace there. I mean, not very visible now, but—and—but I think more Germans are confident that the government has somehow—is trying to get a grip on this—on this whole issue, because it’s not just the refugees who came in 2015, but we see something like, I mean, an exodus happening in so many African, south countries. So people have realized this is a—this is—this is a huge problem. At least we have the political leaders who are dealing with that, who are active.

And that would be my explanation. I don’t know—

STOKES: I mean, it is interesting. The perception may be better than the reality because only 9 percent of these people actually have jobs now.

BARTH: Yeah.

STOKES: So it’s not exactly as if they’ve been integrated yet into the economy. Now, it’s only been two years, but it’s—that’s not a good number.

BARTH: A generation. No.

DONFRIED: I think it is surprising that this hasn’t been more of an issue actually in this election. So the numbers are down, but they’re still significant, right. In 2015, you had 890,000. Last year it was under 300,000, I think, 280,000. This year the number will be smaller. But I’m sitting in a country where we’re talking about cutting in half our number of 50,000. So these are orders of magnitude larger than what we have.

And there’s been some domestic security issues related to this. We remember New Year’s Eve in Cologne. We remember the Berlin Christmas market. So there have been some security consequences related to the concerns about identity. And people have talked about how this has been the sleep campaign, that what the CDU has done so well is made everybody feel that it’s OK, we are managing it. You remember at the time at the height of the refugee crisis in 2015—

BARTH: (Inaudible.)

DONFRIED: —Chancellor Merkel stood up and said, “Wir schaffen es.” And people seized on this and said, what are you talking about? We’re not managing it by any means. These people are streaming in. We have no idea who they are. We don’t know how to give them shelter. We can’t integrate them.

And I was really struck watching the TV debate, because in her closing statement she said, “Zusammen schaffen wir es.” She used exactly that language which she had been ridiculed for, which said to me that she believes she has succeeded with this policy and she wants to remind German voters that they can trust her, because she even managed that one.

So it is—the psychology of it is interesting.

BARTH: And all the major parties are agreeing on that. That’s the—that’s the interesting thing and why I personally as a private citizen think that AfD will be a—will get more than an 8 percent share of the vote, because they are—in this respect they are the alternative. They are the ones who quite aggressively address the issue. I mean, we have just looked at some of these posters. Amazing—I mean—

DONFRIED: “Burkas? We prefer bikinis.” And then you see three bikini-clad women from the back, you know. You know, “Islam? Not in our kitchen.” And there’s a cute little pig on the—I mean, they’re—

STOKES: Subtle, very subtle. (Laughter.)

Q: Well, they are made by an American.

STOKES: Yes. OK, right here. Right here in the front.

BARTH: Is that true?

DONFRIED: So hopefully you should think, wait a minute.

Q: I’m Jim—I’m Jim Gilmore, the former governor of Virginia.

I think the American-German relationship is the most important one that America has. But my question is about the European Union. There’s been a lot of reports that many members of the European Union resent Germany and that there are forces pulling European Union apart because of German policy.

My question is, what are those German policies that are causing that resentment, particularly dangerously in the east? And what—is Germany going to do anything to try to repair that, since they seem to want the European experiment to succeed?

BARTH: That’s a question for you, Karen.

DONFRIED: OK, I—so I would argue there was probably no one in the world who breathed a larger sigh of relief when Emmanuel Macron won the French presidential election than Angela Merkel, because she gets that, that German leadership in much of the European Union is seen as German domination. You see resentments of Germany in the east. You see resentments of Germany in the south.

And there’s also no country in Europe for which the European Union is more important than Germany, because she looks to the EU as a way to manage German power. Germany is the largest economy, strongest economy in the EU. It has the largest population of any EU member state. And so she needs a partner, and that is what Macron is.

So what you’re going to see is she’s going to try to build this partnership, and we’ll see how she does it. Will she fundamentally change German policy towards the eurozone, or will it be more through defense policy? We’ve seen Germany and France already make important strides forward on a common security and defense policy. But she needs someone to partner with her in reinvigorating the EU, because she understands Germany can’t do it alone. It’s not strong enough to do it alone, but also it breeds deep resentments when Germany tries.

STOKES: Just sharpen that, though.

STARK: Yeah.

STOKES: Yeah, I mean, just—can you talk also about Poland and Hungary and, you know, issues other than France that Germany has to manage going forward?

STARK: Well, let me—let me put it in a—in a broader picture. She’s very—or Germany is very much under pressure in the refugee question from those countries, Bruce, that you just mentioned—

STOKES: Right.

STARK: —but also when it comes to economy terms and her policy of austerity. Angela Merkel and the whole German government is sticking very much to plans of saving money, spend what you have, don’t spend more, stick to an austerity plan. Remember how that played out in Greece. And in Greece, demonstrators were walking through the streets and showing her—portraying her as a—as a new Hitler. Similar tendencies in Spain and in Italy, not in the same dimension, but financially, Germany is very much under critique from the southern part of Europe, and when it comes to the refugee policy more from the eastern countries.

So on one hand, Germany clearly is the motor and the engine of the new European Union and certainly the strongest country and in that position probably—thank you for making that point—the most important ally for the United States.

On the other hand, Merkel must be very carefully not to distance herself too much from the rest of the European Union and also on the domestic front, having in mind that the Germans don’t want to pay for all these Southern European countries. So she can’t give too much money to the process because she knows it will cost her a lot from her home base.

So she needs to balance all those questions and carefully. She did quite well so far, I would say. But as Karen pointed out correctly, she is extremely relieved that Emmanuel Macron is a—or seems to be a reliable partner so far.

STOKES: How tough is she going to be on Brexit?

STARK: I mean, it’s interesting. She is very hesitant in commenting that too offensively. She—I think she knows of the importance of the U.K., but she also knows that it’s very important that Europe sticks together and you will have a precedence if you give too much. So she leaves the tough talk to Brussels, but she’s not someone who will give away other things.

STOKES: Right here, yeah.

Q: Thank you. I’m Hani Findakly, an investment banker with the Clinton Group.

I’d like to see if you could address the economic priorities and economic strategy of Ms. Merkel. Germany benefitted over the last five years from a large devaluation of the euro thanks in part to Greece and has raised its growth rate from—by 1-percent-plus to 2-percent-plus. That’s a very powerful economy in Europe.

You made an issue about the trade with China and the impact of that trade on the German economy. What is the chancellor’s sort of strategy and vision? Is it to stay at that 2-percent growth rate, or is it—or is it a way to start growing beyond that?

BARTH: I think everybody was quite surprised about the—about the 2 percent. Of course growth rates are wonderful, but I think that the chancellor has been—I mean, actually she was the first person I ever heard mentioning what we call the “Industrie 4.0.” This is—this is a new digital economy. So I’m always reading also the economics pages, but for her to—I mean, for years she has been giving really a lot of thought and energy how—I mean, this is the next transformation of all economies and how are we going to survive in this—I mean, this is the new dimension of globalization. And where will people work? How is labor going to be protected?

So I think that’s really the one question she’s thinking about all the time. And I don’t think this—we will stop to be traders. We’re still going to have a huge trade surplus. And I’m not going to reiterate what my foreign minister has said when he was minister of economics: If you don’t like it, just put out better products and export them to other countries. (Laughter.) I thought it was very—this was very cool.

But we give more thought to imbalances in trade, and I think domestic consumption has played a much bigger role than ever before in our—in our growth rate. So—

STARK: It’s fascinating—just one sentence—

STOKES: Yeah. Yeah.

STARK: It’s fascinating that the economy doesn’t play a major role in the election campaign.

BARTH: No, not at all.

STARK: You could say it’s going well, so why should we talk about it? Merkel tried several times. She tried to make the point of digitalization as one of her punch lines, but it doesn’t work well. People are just satisfied and thinks things shall go on forever like this.

STOKES: Back here in the back. Yeah.

Q: Thank you. I’m Ching-Yi Chang with Shanghai Media Group.

This question is to Minister Barth. We know one of the Trump factors is actually making Germany and China working closer together on climate change and also on other issues. So since you’re used to working in China, I’d like to know, how do you—will this election change the relationship between Germany and China and what the relationship will be in the future?

BARTH: I think nobody should expect equidistance between Berlin and Beijing and D.C. There has been close cooperation between China and Germany in—on some subjects, but of course the U.S. is our ally and friend. So it’s not in the party programs, but I would still say it. The U.S. is our party and friend, and the—China is a partner—a partner, and we have—we have on many issues—I mean, look at our political and economic systems. Look at all these questions concerning—wow—human rights, market access, and protection of intellectual rights, there are huge differences between Germany and China.

So we’ve seen all the—I mean, there are real advances from Beijing, but we know how to—I don’t know—we understand it’s something that comes in a very specific political situation. So our relationship—transatlantic relationship is still much stronger.

STOKES: Back there in the back.

Q: Hi, Todd Lindberg now with the Hudson Institute.

Who’s the next foreign minister? What are the possibilities there?

STOKES: I guess that’s for not the foreign ministry.

STARK: Well, I’ll throw in one name. If it will be a Christian Democratic party together with the Liberal Democrats, then Alexander Graf Lambsdorff from the liberals could be a potential candidate. So I would—

STOKES: He’s now a member of the European Parliament.

STARK: He’s now a member of the European Parliament. He’s—

STOKES: And the son of—

STARK: Son of the former—Otto Graf Lambsdorff, who was a minister under the Helmut Kohl government, and he’s well known in foreign policy. But again, this Liberal Democratic Party, as I said, it’s renewed. There are not too many permanent figures, so there could be a surprise. If there would be a smaller party, then probably the foreign ministry would go to the smaller party in a coalition.

DONFRIED: But it is interesting, because on the Free Democrats, Christian Lindner, who Helga mentioned earlier—he’s the 38-year-old charismatic leader of the Free Democrats. And when you look at campaign ads, the FDP ads are a colored background with a black-and-white shot of Lindner looking very debonair.

He has said in interviews that it was a mistake for the FDP, when they were last in government in 2009, to not take the finance ministry. And so there’s speculation about whether, if you had a CDU/CSU coalition with the Free Democrats, might they actually choose something else, which would be interesting. And if it’s a grand coalition, I don’t know. Sigmar Gabriel seems very happy as foreign minister. (Laughs.)

BARTH: Absolutely.

DONFRIED: I think he stays. And if the—

BARTH: Mr. Schulz, too.

DONFRIED: Yeah.

BARTH: Some people say it’s going to be our Ministry of Defense could be, for the first time in many years, a conservative foreign minister and the first female politician as foreign minister, so.

STOKES: Since you raised her, and since the game of politics is always about speculating about the next election even before this election’s over, who are the potential candidates in the CDU after Merkel, assuming—I think widespread assumption in the press and elsewhere that if she wins reelection, this is going to be her last term.

STARK: Let me say, Helga, on this, and then jump in.

BARTH: I would say this is years from now. (Laughs.)

STARK: Yeah. Yeah, yeah, yeah.

Well, there is an interesting point beyond the personal speculation, and this is if you talk to Merkel’s close advisers, they all say this is the last time. So probably latest in two years from now, we will see the internal fightings begin. Who will be her successor? And that’s not only something that we will see on a personal part, but also on the question where does this conservative party, the CDU, goes to? Under Angela Merkel, it shifted very much to the center. They gave away the conservative right wing of the party.

But there is something like a reestablishment of people who try to regain that ground. It centers a little bit around Wolfgang Schäuble, the finance minister right now. There are some younger names in the game like Jens Spahn, who is Wolfgang Schäuble’s undersecretary of finance right now. There’s a regional minister of interior in Baden-Wurttemberg, Tomas Strobl, who is engaging in that.

So we see a couple of people already forming something like a bloc of influence, because they all know this is probably the last four years. And in a year or in two years from now, the question will rise. And I don’t know if it’s Ursula von der Leyen, who’s a very charismatic politician but she got damaged very much in the ministry of defense; Thomas de Maiziere, who was for some time mentioned as one of the potential successors. He got damaged as well.

BARTH: The same ministry.

STARK: In the same ministry, and also partly through the refugee crisis. So we might see some new figures popping up then. And it will be very interesting to see those internal fightings in the CDU.

STOKES: And Merkel has a reputation among Germans of killing off all the opposition, right?

STARK: She’s very successful in killing.

STOKES: So at some point, it does seem to me, if, in the next few years, the question is, does she change her behavior and try to groom a person to be her successor? Or does—or are her instincts that until I’m gone, there’ll be no number two?

STARK: I would predict that she’s trying to preserve her legacy, and that is her number one question. She probably is not engaging too much in killings in the future because that’s not necessary anymore.

BARTH: She’s never done that. (Laughter.)

STARK: But—

DONFRIED: She did it to her mentor, Helmut Kohl.

BARTH: All of them took themselves out of the game, I would say. (Laughter.)

STARK: But read the new government and the new positions already through the aspect of who could be a potential successor and who’s quietly disappearing.

STOKES: Yes.

BARTH: I’d like to add another speculation about the next foreign minister. It could be a Green foreign minister; Cem Ozdemir, for example.

DONFRIED: First Turkish-German foreign minister.

BARTH: Yeah. Swabian-German.

STOKES: Right here. Yeah.

Q: Ricki Tigert Helfer, Grameen Foundation and formerly the Federal Reserve and the FDIC.

For many of us who care about strong leadership in the world in a very troubled time in the international terrain, Angela Merkel looks like our savior. She seems to be wise. She seems to be sensible in many ways. And she seems to understand the competing forces.

But all of this talk about her successor leads me to ask the question: To what extent, once she becomes, we hope, chancellor again, will she be a lame duck? To what extent will it reduce her power to actually come to terms with the issues that have to be resolved among countries with respect to the EU and elsewhere?

STARK: Remind the differences in the political system. I mean, there will be certainly a phase in the last month where she will be kind of a lame duck. But it’s not similar to the United States that we are going to elect a president and then there is just one new candidate. It’s still a coalition. It’s still party politics, coalition politics. So I would guess that we will have a phase of stability for at least three more years, and then it might open up.

STOKES: OK, we have time for one last question, if there is one. Right here.

Q: Andrew Pierre from Global Insights.

We haven’t had much discussion of Russia and policy towards Russia. Do you see a possibility that a French-German-led Europe, perhaps with Britain behind them, would initiate a more—I don’t want to say adventurous, but more imaginative policy towards Russia in order to balance somewhat the nonpolicy, at best, of our own president?

STOKES: Karen, do you want address that one?

DONFRIED: Well, it’s interesting, because, you know, just to stay consistent with what I said earlier, I do think Angela Merkel will continue on the path of holding Russia responsible for what it’s done and doing in Ukraine. So I don’t expect a change there. But interestingly, the Germans were irritated by the legislation passed by our Congress, which put in place tougher sanctions on Russia, along with language that would affect Nord Stream 2, companies that were helping to build that pipeline.

And so that gets complicated. You know, it gets back to the role German business plays in a conservative party in Germany.

BARTH: And extraterritorial sanctions in principle.

DONFRIED: And I was going to connect this to—

STOKES: We have a history of extraterritorial sanctions.

DONFRIED: But I was going to connect it to the Iran deal, because that—it is very sensitive when the U.S. Congress passes legislation that we then apply extraterritorially. And what the administration has been suggesting might happen, if the president were not to certify Iran again, is it would then go to Congress and they might put in place sanctions. So I do think this is a very sensitive issue, not just with regard to Russia; first point.

Second point. The one time this became an issue in the campaign was when Gerhard Schröder, the former Social Democratic chancellor, announced he was going to join the board of Rosneft. And interestingly, the current Social Democratic candidate, Martin Schulz, immediately said I think this is terrible.

And so, you know, you do see the different dimensions of Germany’s relationship to Germany. And geography in many ways is destiny.

BARTH: It’s important. I mean, Russia really is our immovable neighbor. They’re there. They’re important. And a weak Russia is not in anybody’s interest, actually. That doesn’t mean that I would support lifting the sanctions. But if we become more creative and we show some imagination, that’s pretty natural.

STOKES: Well, thank you very much. Thank you all for a stimulating set of questions and a discussion. And I’d like to thank our panelists and thank those who are watching—the members who are watching online. And we will reconvene at some point again, I’m sure, to hash over all these issues again.

Thank you very much. (Applause.)

(END)

 

Up