Armstrong Economics Blog/Germany
RE-Posted Sep 17, 2017 by Martin Armstrong
Violent protest are starting to rise in Germany against Federal Chancellor Angela Merkel. Keep in mind that Merkel has never won 51% of the popular vote. She rules Europe solely by a coalition. DWN reports that she was confronted with shouts of “Hau ab!”, whistles and “hatred”. They are appearing with poster reading “Merkel hatsten Deutschland”. It is unusual for German to engage in such civil unrest.
When Martin Schulz became the leader of the SPD, it rallied sharply to 31%, which was just one point behind the CDU/CSU at 32% back in March 2017. As people I know in the EU Parliament told me, wait until the Germans get to know Schultz. That threshold seems to have arrived.
CDU/CSU now polls at a staggering 16-point lead with 37% of the popular vote, compared to just 21% for the SNP. Meanwhile, the far-right Alternative for Germany (AfD) are trailing well behind the main parties at 11%, down from 15% back in January 2017. However, the AfD is polling well above the five per cent margin required to win seats in Parliament. The party rose to prominence two years ago at the height of the European migrant crisis and the wave of populism that came partly as a result of the influx of refugees into Germany. Therefore, we are looking at the first time since WWII that a far right party even get one seat in Parliament.
The DAX is clearly targeting the week going into the election but the Euro appears to be ignoring the German election.
Chancellor Angela Merkel rules Europe by a grand coalition government in the German Bundestag relying on the FDP. While the CDU will win the majority of seats, it will still not be enough to rule alone. Note that the FDP has taken a sharp drop and the AfD has risen sharply. Therefore, Merkel’s grand coalition is not yet a shoe-in. There will have to be some backroom manipulation to keep the status quo.
Germany has a notoriously very complex voting system for electing its Bundestag, or lower house. The system seeks to combine the benefits of both direct and proportional representation while guarding against the electoral mistakes of German history, which saw political fragmentation during the Weimar Republic between WWI and WWII. While the turnout for the last two election fell sharply to just 70%, this election is far more heated and should see a sharp increase – which is not good for Merkel’s Grand Coalition.
A person casts their vote for two candidates, The German ballot is divided into two columns. The first column is black and the second column in blue, each representing a direct vote for a candidate and then for a political party. Worst still, Germans while on the surface you may be casing a vote with two choices – one for a district representative and one for a party, there is more to it than just that.
The first vote or “Erststimme” for the district representative, follows a first-past-the-post system like elections in the United States. The voter selects his or her favorite candidate to represent their district in the parliament. Every candidate who wins one of Germany’s 299 constituencies – which are divided up per 250,000 inhabitants – is guaranteed a seat.
To fill the other half of the 598 seats in Germany’s Bundestag, voters then cast their ballots in the second vote or “Zweitstimme.” This vote goes to a political party instead of a single candidate. It also determines the percentage each political party gets in the Bundestag.
Now comes the complexity. The ballot also allows voters to split their vote among parties!. So you can split your vote casting one for their local CDU candidate in the first vote, but casting their ballot for the Liberal Democrat FDP in the second vote. This is how Merkel maintains the Grand Coalition.
Therefore, we clearly have the risk of the AfD wining seats for the first time. So while Merkel will most likely still be Chancellor, the mix is going to cause some backroom deals.