After a slow campaign start, the centre-left Social Democrats (SPD) and their candidate for Chancellor Olaf Scholz, who were part of outgoing Chancellor Angela Merkel’s governing coalition, have managed to transform the initial perception of German voters, and climb to the top of the chart. The conservative Christian Democratic Union (CDU) and its leader Armin Laschet have slumped to an all-time low, and may be forced to take a seat in the opposition.

The Greens, with their candidate for Chancellor Annalena Baerbock, have emerged as the third largest party, clearly showing the response among voters to the climate crisis. The traditional kingmaker of the past, the liberal party (FDP), is in fourth position, and remains crucial to forming the government. The populist right wing Alternative for Deutschland (AfD) has moved down the ladder but will still be present in Parliament, which shows that they are entrenched in Germany’s political landscape.

Once the final results are declared, the long process of forming the government will be tried by both the SPD and CDU.

Paths to government

Angela Merkel was Chancellor for 16 years — from 2005 to 2021. What did she do right to be able to serve for so long?

Merkel is the third leader from the CDU to have had an extraordinarily long tenure as Chancellor. The other two leaders were Dr Konrad Adenauer (1949-63), who laid the foundation of West Germany, and Dr Helmut Kohl (1982-98), who was called the Chancellor of Unification.

Merkel broke the glass ceiling to become the first woman Chancellor from the conservative party, and was kept in the post by a combination of political, economic, and social factors. Her middle-of-the-road approach made her appear a safe bet when things were not stable politically, and won her support at the domestic and European levels.

While many in Europe saw her as the only strong leader on the continent, to others she appeared as being risk-averse in a typically German way — which brought the assurance that she would lead without rocking the boat. With the CDU being the largest party in the last four elections, and Merkel facing no significant challenge to her leadership from within, she could drive the negotiations for coalition governments, but she did not always to get the optimal outcome. Thrice she formed a government with the Social Democrats, termed the “Grand Coalition”.

How are the economy, society, and politics of Germany different today from what they were when Merkel became Chancellor?

A number of political, economic, and social developments in Europe and the world had their impact on Germany. Merkel benefitted from economic reforms initiated by her predecessor Gerhard Schröder — including a reduction in taxes, merging of unemployment and welfare benefits, and increasing the flexibility of the labour market. As a strong export-based economy, Germany under Merkel outperformed France, the UK, Spain, and Italy in Europe, and posted robust exports behind only China and the US.

During her tenure, unemployment in Germany came down by an order of 3 million, and 5 million more people got jobs. The innovative “kurzarbeit” short-time work scheme saved thousands of jobs, and prevented layoffs by giving firms subsidies to keep workers on the rolls during the financial crisis and the pandemic.

However, Germany has been slow to adapt to digitalisation — and OECD data show it ranks 34th out of 38 industrialised countries in Internet speeds.

Traffic light coalition

As Germany has seen demographic change, Merkel remains popular among the baby boomers, the generation born from the time World War II ended to the mid-1960s. Thirty years after reunification in 1990, the memories of World War II are receding — but the East-West divide continues despite the pumping of money into the erstwhile East by successive German governments. Unemployment figures are still higher in the new states as compared to the rest of Germany. And a significant percentage of the population (about 10%) thinks that the country should leave the European Union.

All these developments have had an impact on the political landscape. The traditional two-and-a-half-party system of the Christian Democratic Union/Christian Socialist Union (CDU/CSU), SPD, and FDP has changed. The Greens have risen as a major force, and more recently, the AfD has sought to offer radical solutions, creating a fractured political field. Some analysts link the strengthening of the AfD — which became the third largest party in the German Parliament in 2017 — to the influx of large numbers of refugees in 2015 following Merkel’s decision to open the country’s doors to them. The AfD’s rise is also in line with the trend seen elsewhere in Europe, and the emergence of right wing governments in Poland and Hungary.

What impact has Germany under Merkel had on Europe and the world?

The financial crisis of 2008 was followed by the Eurozone crisis. Germany paid the largest amount in the EU’s first bailout of Greece in 2010. Merkel’s push for an austerity-based approach to the crisis made her very unpopular in Greece and other European countries struggling with balancing budgets and pushing a growth agenda.

In 2015, the refugee crisis swamped Europe, and Merkel pushed to take in the swelling numbers who landed on European shores. Her famous line “Wir schaffen das” — “We can manage this” — drew criticism from far right groups in Germany, as well as from her European allies who complained they were not consulted. Poland, Hungary, and Austria refused to admit refugees as per the quotas decided by the European Union, while Germany took in a million of those who arrived in Europe.

Merkel has been seen as the crisis manager of the EU — a role that was evident in Europe’s Brexit negotiations with the United Kingdom. She has also been called the “climate chancellor” for her role in pushing a low-carbon future for Germany and Europe. Although Germany adopted the “Energiewende” transition to a more renewable and sustainable economy, the reinvention of its large industrial economy in a competitive environment has not been easy — three-fourths of Germany’s energy requirements still come from oil, coal, and gas.

At the political level, neither she nor the EU could come up with stronger action against Russia after its annexation of Crimea in 2014 — and Germany subsequently chose to go ahead with the controversial Nord Stream 2 pipeline to supply gas to Europe.

After the 2016 US elections that put Donald Trump in the White House, Merkel came to be seen as the new “leader of the free world”. Following the outbreak of Covid-19, Germany led the European effort to address the impact of the pandemic in a timely manner with solidarity.

In what areas and directions did India’s bilateral relationship with Germany evolve under Merkel?

Since the inauguration of the India-Germany strategic partnership in 2001, relations have grown in a robust manner. India is one of the few countries with which Germany holds Cabinet-level Inter-Governmental Consultations (IGC). Five IGC meetings have been held so far; they signal growing political engagement and economic partnership that has led to strong institutionalised arrangements to discuss bilateral and global issues.

At the fifth IGC held in 2019, for which Merkel visited India, the focus was on sustainable growth and a reliable international order. Although trade and investment have been at the heart of the bilateral engagement, the IGC has expanded its scope to artificial intelligence and digital transformation, and pushed forward the ‘Make in India Mittelstand’ programme. The other areas of cooperation include science and technology, sustainable energy, smart cities, and circular economies.

At the political level, India and Germany have been at the forefront of the push for UN Security Council reform. At the cultural level, there has been joint investment in higher education to enable greater people-to-people contact and collaboration in education.

What are the unfinished tasks that India must now take up with Merkel’s successor?

It will be a while before a stable ruling coalition comes into being and a new government takes office in Germany. What assumes priority on the political agenda will be decided in part by the nature of the coalition. Broadly, however, there will be continuity in the previously agreed agenda, and a focus on bilateral trade will dominate the economic side of the partnership.

Germany has put out its own strategy for the Indo-Pacific, which has to be read with the EU’s approach. New Delhi has to engage Berlin on enhancing this aspect of the equation.

There is scope to scale up defence cooperation. A focus on high-end technology transfers and sustained research and development hubs being created in India, will provide a boost to infrastructure creation and scientific cooperation.

A major area of cooperation relates to climate change and building more sustainable energy solutions in India, and offering it to third countries with co-branding.

Another would be investment in higher education and fast-tracking high-skilled Indian employment in Germany.

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