BGA Cable German State Elections in Saxony and Brandenburg - Berlin Global Advisors
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02 September 2019
BGA Cable
German State Elections in Saxony and Brandenburg
Key take aways
• Both the CDU and SPD suffered historical lows in Saxony (SN) and Brandenburg (BB) but will very likely
continue to govern in each of the states.
• CDU and SPD continue their unprecedented decline and are losing their status as ‘Volksparteien’, while the
AfD on the right, and the Green Party on the left are becoming increasingly popular.
• The immediate impact on Angela Merkel’s government will be limited as both governing parties (CDU and
SPD) fared better than predicted in the polls. However, the “Grand Coalition” will likely enjoy only some
weeks of “breathing space” before the next state election in Thuringia on 27 October 2019, in which the
AfD will likely gain significant votes again.
• In the East German context, the AfD scored historical heights and is the strongest party over both states
but falls short of becoming the strongest party in either state. They are now the main challenger to a unified
front of established government parties, who will likely just include the Green Party in their respective
coalition.
• Despite their relatively weak showing, the Green Party will be needed for any stable government formation
in both states now. Thus, they will further increase their political relevance at the federal level, making a
federal level coalition between the CDU/CSU and the Green Party more likely, or even a left-wing coalition
among the SPD, the Green Party, and DIE LINKE.
• To the same extent that the Green Party is extending its pivotal role for any future government in Germany
at the federal and state level, the AfD is extending its role as “anti-establishment” opposition against a
united block of established parties. This development, which perfectly caters to the AfD’s populist claims,
is unsettling for Germany: almost all post-electoral statements suggest that CDU, SPD, and the Green Party
(and DIE LINKE) intend to continue with business as usual. which will most likely help the AfD in future
elections.
• The September 1st ballots underline the existing deep, and further deepening divisions within Germany:
while political competition between the center-right and the center-left is mostly stagnant (and respective
parties continue to lose), the main divergence now runs between the Green Party and the AfD. On top of
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trading services of any financial instruments. BGA - Berlin Global Advisors GmbH consulting efforts always require monetary compensation based on a pre-arranged
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material provided by BGA - Berlin Global Advisors GmbH should never be construed as an offer or solicitation to buy, sell, or hold securities. The information contained
in our communications should be viewed as information and is solely a demonstration of the firm’s scope and capabilities to assist your firm’s primary research efforts
on potential geopolitical, policy and regulatory outcomes. It is not intended to be investment advice. BGA - Berlin Global Advisors GmbH does not recommend, imply,
or suggest any investment strategy on any financial instrument nor does it provide any opinion on the present or future value of any financial instrument. ACCORDINGLY,
UNDER ARTICLES 36(1) & 36(2) OF THE MiFID ORG REGULATION THIS COMMUNICATION IS NEITHER INVESTMENT RESEARCH NOR NON-INDEPENDENT RESEARCH02 September 2019
BGA Cable
German State Elections in Saxony and Brandenburg
this comes a divide between East-and West (the strength of a considerably more right-wing AfD in the east,
and by considerably more left-wing Greens in the west), between post-materialist urban and traditionalist
rural dwellers, between internationalist and nationalist policy priorities. In sum, German politics will very
likely become less stable, less centrist, and more populist in the future.
• Another worrying trend-confirming aspect in the mid-term perspective is the failure of the FDP, the most
pro-market, pro-business and welfare-state-critical political party, to enter either parliament. In terms of
welfare, economic, and financial policy, the AfD must be considered a national-social pro-welfare state and
pro-regulation and anti-big-business party, particularly in their more radical eastern German chapters.
Thus, parliaments in Brandenburg and in Saxony are now dominated by more or less pronounced welfare-
state, pro-regulation, and re-distributive political parties.
• Those who are concerned about the aforementioned developments, and in particular with the rise of the
right-wing populist to radical AfD, should be aware that this election took place at the end of a long era of
unprecedented economic boom, prosperity, and employment in Germany. On Sunday, 83% Saxony (SN) resp.
85% Brandenburg (BB) of voters considered themselves to be in a good or very good economic situation. With Europe’s
main economic powerhouse now probably heading towards recession, and towards rapidly shrinking room
for fiscal re-distribution aimed at appeasing voters, one should be concerned about election results in times
of economic crisis and high unemployment.
• The recent popularity of the Green Party will likely suffer a setback with increasing government
participation, and in particular with the end of the economic boom: when basic materialistic concerns re-
surface for millions of voters, the room for post-materialist desires will shrink considerably. It would be
mostly the AfD who would profit from an economic crisis, drawing voters from the CDU/CSU, SPD and the
Green Party who do not go to DIE LINKE.
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BGA - Berlin Global Advisors GmbH is not a registered investment advisor or a broker-dealer. It is not affiliated with, nor does it recommend any firm that performs any
trading services of any financial instruments. BGA - Berlin Global Advisors GmbH consulting efforts always require monetary compensation based on a pre-arranged
negotiated fee, never is it provided in exchange for, or used as an inducement for any other services at BGA - Berlin Global Advisors GmbH or at any other firm. Any
material provided by BGA - Berlin Global Advisors GmbH should never be construed as an offer or solicitation to buy, sell, or hold securities. The information contained
in our communications should be viewed as information and is solely a demonstration of the firm’s scope and capabilities to assist your firm’s primary research efforts
on potential geopolitical, policy and regulatory outcomes. It is not intended to be investment advice. BGA - Berlin Global Advisors GmbH does not recommend, imply,
or suggest any investment strategy on any financial instrument nor does it provide any opinion on the present or future value of any financial instrument. ACCORDINGLY,
UNDER ARTICLES 36(1) & 36(2) OF THE MiFID ORG REGULATION THIS COMMUNICATION IS NEITHER INVESTMENT RESEARCH NOR NON-INDEPENDENT RESEARCH02 September 2019
BGA Cable
German State Elections in Saxony and Brandenburg
Election outcomes in detail
• Brandenburg (BB) is a very sparsely populated eastern German state with some 2.5mn inhabitants and a
(2017 nominal) GDP per capita of EUR 27,675 (Germany: 82.5mn / EUR 39.477). This is the third-lowest
GDP among the 16 German states.
• In BB, the SPD had always been by far the strongest party and provided the state’s Prime Minister since
German re-unification in 1990. Since 2009, the SPD has been governing Brandenburg in a coalition with the
neo-Communist party, DIE LINKE (successor of what was the East German state party, the SED).
• Note: The 9.1% for ‘Other’ in BB contains 5% for Free Voters, a BB-specific voter-list party comprised of
mostly left-wing local political associations and initiatives. They will also sit in the new parliament.
Party BB state 2014 BB federal 2017 BB EU 2019 BB state 2019
SPD 31.9% 17.6% 17.2% 26.2%
CDU 23.0% 26.7% 18.0% 15.6%
LINKE 18.6% 17.2% 12.3% 10.7%
Greens 6.2% 5.0% 12.3% 10.8%
AfD 12.2% 20.2% 19.9% 23.5%
FDP 1.5% 7.1% 4.4% 4.1%
Others 6.6% 6.2% 15.9% 9,1 %
• The 88 seats in the BB legislature will be distributed as follows (wins/losses): SPD 25 (-5); CDU 15 (-6),
LINKE 10 (-7); Greens 10 (+4); AfD 23 (+15); BVB/Free Voters 5 (+2).
• It is quite likely that the SPD, despite a historical low in BB, will continue to govern - in a new three-party
coalition with DIE LINKE and the Green Party. This would be the fourth coalition of its kind at the German
state level (Bremen, Berlin, Thuringia).
• Likewise, in Saxony (SN) with some 4.1mn inhabitants and a (2017 nominal) GDP per capita of EUR 29,856
(best value among the new eastern German states, but still significantly trailing the weakest western
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BGA - Berlin Global Advisors GmbH is not a registered investment advisor or a broker-dealer. It is not affiliated with, nor does it recommend any firm that performs any
trading services of any financial instruments. BGA - Berlin Global Advisors GmbH consulting efforts always require monetary compensation based on a pre-arranged
negotiated fee, never is it provided in exchange for, or used as an inducement for any other services at BGA - Berlin Global Advisors GmbH or at any other firm. Any
material provided by BGA - Berlin Global Advisors GmbH should never be construed as an offer or solicitation to buy, sell, or hold securities. The information contained
in our communications should be viewed as information and is solely a demonstration of the firm’s scope and capabilities to assist your firm’s primary research efforts
on potential geopolitical, policy and regulatory outcomes. It is not intended to be investment advice. BGA - Berlin Global Advisors GmbH does not recommend, imply,
or suggest any investment strategy on any financial instrument nor does it provide any opinion on the present or future value of any financial instrument. ACCORDINGLY,
UNDER ARTICLES 36(1) & 36(2) OF THE MiFID ORG REGULATION THIS COMMUNICATION IS NEITHER INVESTMENT RESEARCH NOR NON-INDEPENDENT RESEARCH02 September 2019
BGA Cable
German State Elections in Saxony and Brandenburg
German state), the CDU had always been by far the strongest party and provided the state’s Prime Minister
since German re-unification. Since 2014, the CDU has been governing Saxony in a coalition with the SPD.
• Similar to BB, the CDU suffers a historical low in SN, but clearly remains the strongest party and will most
certainly continue to govern - probably with the SPD and the Green Party.
Party SN state 2014 SN federal 2017 SN EU 2019 SN state 2019
CDU 39.4% 26.9% 23.0% 32.1%
SPD 12.4% 10.5% 8.6% 7.7%
LINKE 18.9% 16.1% 11.7% 10.4%
Greens 5.7% 4.6% 10.3% 8.6%
AfD 9.7% 27.0% 25.3% 27.5%
FDP 3.8% 8.2% 4.7% 4.5%
Others 10.1% 6.7% 16.4% 9.2%
• The 119 seats in the Saxony legislature will, for the time being, be distributed as follows (wins/losses):
CDU 45 (-14); SPD 10 (-8); LINKE 14 (-13); Greens 12 (+4); AfD 38 (+29).
• NOTE that the AfD had been limited in their number of seats in a decision by the Saxony electoral
committee, the larger part of which has already been ruled illegal by the state’s constitutional court. The
currently remaining 30 (party list) seat limit (plus 8 directly won constituencies by candidates not on the
list) will also be challenged in court. If successful, the AfD will hold 39 of 120 seats. A respective court
decision on behalf of the AfD may force a repetition of the election.
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BGA - Berlin Global Advisors GmbH is not a registered investment advisor or a broker-dealer. It is not affiliated with, nor does it recommend any firm that performs any
trading services of any financial instruments. BGA - Berlin Global Advisors GmbH consulting efforts always require monetary compensation based on a pre-arranged
negotiated fee, never is it provided in exchange for, or used as an inducement for any other services at BGA - Berlin Global Advisors GmbH or at any other firm. Any
material provided by BGA - Berlin Global Advisors GmbH should never be construed as an offer or solicitation to buy, sell, or hold securities. The information contained
in our communications should be viewed as information and is solely a demonstration of the firm’s scope and capabilities to assist your firm’s primary research efforts
on potential geopolitical, policy and regulatory outcomes. It is not intended to be investment advice. BGA - Berlin Global Advisors GmbH does not recommend, imply,
or suggest any investment strategy on any financial instrument nor does it provide any opinion on the present or future value of any financial instrument. ACCORDINGLY,
UNDER ARTICLES 36(1) & 36(2) OF THE MiFID ORG REGULATION THIS COMMUNICATION IS NEITHER INVESTMENT RESEARCH NOR NON-INDEPENDENT RESEARCH02 September 2019
BGA Cable
German State Elections in Saxony and Brandenburg
BGA Expert
Andreas Beckmann, Senior Analyst
Since 2006, Andreas Beckmann has been an independent political analyst and consultant
based in Berlin and Brussels. He works closely with BGA partners on numerous projects.
His main areas of expertise include financial regulatory issues –particularly the manifold
aspects of the Eurozone sovereign and bank debt crisis, defense and security issues on a
domestic German and international level – including IT security, and the German
residential real estate market. Andreas has a combined 30 years of work experience. He
served for two years as an officer cadet in the German Army and worked more than
14 years in the academic field as research and teaching assistant in the area of applied political science. Moreover,
Andreas has a record of active engagement in German party politics, including several years in party and (local level)
public offices.
Berlin Global Advisors (BGA) is a partner-led international consulting firm providing geostrategic advisory,
transaction support, corporate affairs, and public diplomacy services to financial investors, companies and
governments.
Kurfürstendamm 53 10707 Berlin | An der Welle 4 60322 Frankfurt |17 Bruton Street Mayfair W1J 6QB London | 122 E. 42nd St. #2005 New York 10168
www.berlinglobaladivsors.com
5
BGA - Berlin Global Advisors GmbH is not a registered investment advisor or a broker-dealer. It is not affiliated with, nor does it recommend any firm that performs any
trading services of any financial instruments. BGA - Berlin Global Advisors GmbH consulting efforts always require monetary compensation based on a pre-arranged
negotiated fee, never is it provided in exchange for, or used as an inducement for any other services at BGA - Berlin Global Advisors GmbH or at any other firm. Any
material provided by BGA - Berlin Global Advisors GmbH should never be construed as an offer or solicitation to buy, sell, or hold securities. The information contained
in our communications should be viewed as information and is solely a demonstration of the firm’s scope and capabilities to assist your firm’s primary research efforts
on potential geopolitical, policy and regulatory outcomes. It is not intended to be investment advice. BGA - Berlin Global Advisors GmbH does not recommend, imply,
or suggest any investment strategy on any financial instrument nor does it provide any opinion on the present or future value of any financial instrument. ACCORDINGLY,
UNDER ARTICLES 36(1) & 36(2) OF THE MiFID ORG REGULATION THIS COMMUNICATION IS NEITHER INVESTMENT RESEARCH NOR NON-INDEPENDENT RESEARCHYou can also read
