Immigration, taxes and debt: points of contention in negotiations to form a government in Germany

To govern is, above all, to negotiate. And even more so If no party has obtained a majority of votes sufficient to govern alone, as has happened in the German elections of February 23. The winner of the elections and the conservative candidate, Friedrich Merz, met on Tuesday for an hour and a half in the Federal Chancellery in Berlin with the outgoing Chancellor, the Social Democrat Olaf Scholz, to organize the transition to the future government. Conservatives and Social Democrats will have to negotiate in the coming weeks an agreement to form a grand coalition that will allow them to govern Germany together for the next four years.

The Union – formed by the Christian Democratic Union (CDU) and its sister party, the Christian Social Union of Bavaria (CSU) – has already ruled out an alliance with the far-right party Alternative for Germany (AfD) to govern. The far-right party was the second most voted party in these elections, behind the conservatives and in front of the social democrats, but no party wants to ally itself with the far right. The CDU-CSU and the SPD, which together have 328 seats of the 630 in the Bundestag, have no choice but to make a pact, even though their electoral programmes are very different and clash on many points.

Merz is convinced that he can negotiate "a good agreement" with the social democrats and hopes to be able to form a coalition government before Easter. Political scientist Wolfgang Schröder believes that "it is perfectly possible to imagine that an agreement could be reached relatively quickly." "The pressure to reach an agreement is immense. Not only is there geopolitical pressure, not only is there the desperate situation of these two parties, but above all they have the AfD hot on their heels and the fear that if this coalition does not work out, the Alternative for Germany could continue to rise," explains the political scientist in an interview. The German political scientist, who is a researcher at the Berlin Centre for Social Research (WZB), believes that "nevertheless, the SPD will not simply accept everything that the CDU presents to it."

SPD leader Lars Klingbeil has already warned that the Social Democrats will only form a coalition government with the conservatives if the majority of party members approve it first. After the Hamburg mayoral elections on Sunday, March 2, actual coalition negotiations between the conservatives and the Social Democrats could begin, or at least exploratory polls.

Disagreement over border control

One of the points where the Social Democrats and conservatives clash is immigration, as was already evident during the election campaign. The SPD accused Merz of having broken the cordon sanitaire on the far right after the conservative leader managed to approve a five-point plan on immigration in the Bundestag, the lower house of the German parliament, with the votes of the far right at the end of January.

Merz thus intended to show voters his party's change of course on immigration and the break with the open-door policy for asylum seekers of the former conservative chancellor Angela Merkel, in an attempt to stop the loss of votes to AfD. Merkel opened her doors to more than a million refugees, most of them Syrian, in the midst of the European migration crisis. However, Merz's strategy did not work. More than a million former CDU-CSU voters this time cast their ballot for the far right at the ballot box.

The vote in the Bundestag with the AfD also affected the relationship with the SPD, the Christian Democrats' only possible coalition partner. The conservative leader advocated during the campaign for permanent control of the Schengen borders, the detention of migrants with expulsion orders and the rejection of asylum seekers from other EU countries at the German border. The Social Democrats, on the other hand, are against border closures and widespread rejections at internal borders.

On the other hand, while the CDU-CSU promised during the campaign to reduce corporate tax from 30 to 25 percent to ease the burden on companies, the SPD is against it. The Social Democrats propose a "Made in Germany" bonus to reward those who invest in Germany.

Social policy is another area where the conservative CDU-CSU and the Social Democrats are divided on issues such as basic benefits, pensions and the minimum wage. Future coalition partners should also decide whether to reform Germany's debt brake, which is anchored in the Basic Law (the German constitution) and strictly limits public borrowing. Merz rejects a rapid reform of the debt brake. The SPD, on the other hand, is in favour of reform in order to have more funds for, for example, infrastructure modernisation and defence.