SPECIAL BRIEFING ON PARLIAMENTARY ELECTIONS - Kreab

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SPECIAL BRIEFING ON PARLIAMENTARY ELECTIONS - Kreab
KREAB SPECIAL BRIEFING GERMANY EDITION 3, SEPTEMBER 2021

SPECIAL BRIEFING
ON PARLIAMENTARY
ELECTIONS

                01 | RESULTS
                       SPD wins with 25.7 percent

                02 | OLAF SCHOLZ
                       What does Olaf Scholz stand for?

                03 | COALITIONS OPTIONS
                       Coalition negotiations will be complicated

Source: Photo by Tom Radetzki on Unsplash
SPECIAL BRIEFING ON PARLIAMENTARY ELECTIONS - Kreab
KREAB SPECIAL BRIEFING GERMANY EDITION 4, SEPTEMBER 2021                                                                                                                                    01 RESULTS | 02 | 03   CONTENT

GERMAN FEDERAL ELECTION

SPD    25.7%
SOCIAL DEMOCRAT OLAF SCHOLZ
WINS ELECTIONS
                                                                                             Angela Merkel                      Armin Laschet              Olaf Scholz           Annalena Baerbock
The social democratic SPD with 25.7 percent (2017:
20.5) is the winner of the German federal elections.
Close behind lies the former governing conserva-
tive Party CDU/CSU with 24.1 percent (2017: 32.9).
With its candidate Laschet, it achieves its worst
result in history. With strong gains, the Greens reach                                                                  THE 2021 ELECTION CAMPAIGN WAS MORE
third place with 14.8 percent (8.9) – but fall short                                                                    EXCITING THAN PREVIOUS ELECTION CYCLES.
of expectations. The liberal democratic FDP was
able to improve slightly to 11.5 percent (10.8). The                                                                    The departure of Chancellor Merkel marks the end of an era in German politics.
right-wing nationalist AfD most recently third strong-                                                                  For the first time, 3 candidates competed for the most important political office
est party decreased to 10.3 percent (12.6). The Left                                                                    in Germany. Throughout the election campaign, media and public discourse
with 4.9 percent (9.2) could not reach the 5 per cent                                                                   predominantly revolved around the performance of the top candidates from the
minimum barrier, but thanks to its three direct man-                                                                    CDU, SPD and Greens, with a specific focus on their perceived missteps.
dates it may nevertheless enter the Bundestag with
the full strength of its election result. This is what the
German basic mandate clause stipulates.

Source: Photos by Angela Merkel © CDU/Laurence Chaperon | https://www.bilder.cdu.de, Armin Laschet © CDU/Laurence Chaperon, Olaf Scholz © Federal Ministry of Finance, Annalena Baerbock © gruene.de
SPECIAL BRIEFING ON PARLIAMENTARY ELECTIONS - Kreab
KREAB SPECIAL BRIEFING GERMANY EDITION 4, SEPTEMBER 2021                                                                                                           01 RESULTS | 02 | 03              CONTENT

FACTS & FIGURES
                           German Federal Elections 2021: preliminary results                                                  Distribution of seats in the 20th German Bundestag

                                                                           Gains and losses compared to 2017                     According to preliminary results of the German Federal Elections 2021

   25.7
          24.1                                                                           6.4
                                                                           5.2

                                                                                               0.8                 1.4   1.2
                 14.8                                                            –8.8                –2.3   –4.3
                        11.5
                               10.3

                                                   6.2                                                                                                    735 seats in total.
                                      4.9
                                             2.4
                                                                                                                                                  CDU/
                                                                                                                                        SPD       CSU     Greens    FDP    AfD    Left   SSW (1)
       CDU/                                                                   CDU/
   SPD CSU Greens FDP          AfD    Left   FW Other                     SPD CSU Greens FDP         AfD    Left   FW Other

Source: The Federal Returning Officer. As of: 27/09/2021 Chart: www.bundestagswahl-2021.de
SPECIAL BRIEFING ON PARLIAMENTARY ELECTIONS - Kreab
KREAB SPECIAL BRIEFING GERMANY EDITION 4, SEPTEMBER 2021                                                            01 | 02 OLAF SCHOLZ | 03     CONTENT

WHAT DOES                                                                                         While the CDU has fallen sharply in voter favour, the SPD,
                                                                                                  the Greens and the FDP have made slight to significant

OLAF SCHOLZ
                                                                                                  gains. From this, Scholz derives a clear mandate to govern
                                                                                                  with a “Traffic light” coalition (SPD–Greens–FDP)

STAND FOR?                                                   With OLAF SCHOLZ,
                                                             the election is now being won by
                                                             a candidate who, in the public
                                                             perception, stands for the con-
                                                                                                                                 47%
                                                             stancy and stability of the grand
                                                             coalition. The highly experienced           According to polls, with
                                                             former Head of Government of
                                                             the Federal State of Hamburg and
                                                                                                         significantly more people
                                                             previous finance minister wants
                                                             to implement social reforms and
                                                                                                         want Olaf Scholz (47 percent)
                                                             strengthen Germany’s climate
                                                             policy. In addition, he wants to
                                                                                                         as chancellor than
                                                             strengthen the role of Europe. His          Armin Laschet (20 percent).
                                                             plan is to finance reforms through
                                                             tax increases for higher earners.           The gains as well as the
                                                                                                         strong poll numbers for
                                                                                                         Olaf Scholz could give him
                                                                                                         a moral advantage in the
                                                                                                         upcoming public debate on
                                                                                                         forming a government.

Source: Photo by Olaf Scholz © Federal Ministry of Finance
SPECIAL BRIEFING ON PARLIAMENTARY ELECTIONS - Kreab
KREAB SPECIAL BRIEFING GERMANY EDITION 4, SEPTEMBER 2021                                                                                     01 | 02 | 03 COALITIONS      CONTENT

WHAT COALITIONS
ARE POSSIBLE AND LIKELY?

                      AT LEAST ON THE FEDERAL LEVEL – it will most likely be the first
                      time since the early 50s that a three-party coalition is likely to materialise      Five different coalitions are theoretically possible but
                      instead of a two-party coalition between a large and a smaller coalition partner.   likely to very different degrees. Another special fact is
                      This result could be a foretaste of the evolving party system with three to four    that after this election a coalition is not only possible
                      comparably sized parties between 15–25 percent, in which there are no longer        under the election winner SPD. One thing is certain,
                      any classic people’s parties.                                                       the coalition negotiations will be complicated.

Source: Photo by Ricardo Gomez Angel on Unsplash                                                                                                    READ MORE NEXT PAGE
SPECIAL BRIEFING ON PARLIAMENTARY ELECTIONS - Kreab
KREAB SPECIAL BRIEFING GERMANY EDITION 4, SEPTEMBER 2021                                                                                  01 | 02 | 03 COALITIONS                         CONTENT

           WHAT COALITIONS ARE POSSIBLE AND LIKELY?                                                         Possible coalitions
                                                                                                            Following the German Federal Elections 2021
                                                                                                            (according to preliminary results)

                                                                                                            Black-Red-Green

                                                                                                            Black-Red-Yellow
   “TRAFFIC LIGHT” COALITION
                                                                                                                 “Traffic light”

SPD–FDP–Greens: reasonably likely. On the one hand, there are overlaps on                                      Grand coalition

foreign & European, climate & energy and societal policy topics. On the other                              “Jamaica” coalition
hand, there is great potential for conflict on social reforms, economic & finan-
                                                                                                              Red-Red-Green
cial policy as well as transport policy. The coalition is only possible if SPD and
Greens offer major concessions to the FDP. Social reforms and sanctions in                                        Red-Green
climate policy would hardly be possible, tax increases completely impossible.                                    Black-Green
In economic and financial policy, the FDP would insist on a high degree of influ-
                                                                                                                 Black-Yellow
ence. Permanent conflicts amongst the coalition partners would be inevi-
table. In addition, this coalition is not very popular among FDP members.                                                     majority of seats    no majority; 735 seats in total
                                                                                                                           As of: 27/09/2021. Chart: http://www.bundestagswahl-2021.de/

   “JAMAICA” COALITION                                                                  “KENYA” COALITION

CDU/CSU–FDP–Greens: conceivable, but not very likely. The parties                    CDU/CSU–SPD–Greens: possible, but unlikely. In foreign and European
have a lot of common ground on foreign and European policy, and they have            policy, as well as after recent rapprochements in climate and energy policy,
recently been converging on energy policy and digitalization. However, cli-          this coalition has some overlaps. On top of the aforementioned strategic and
mate, economic and social policy remain major conflict topics. Whereas the           historical reasons, the strong differences in terms of economic and social
Green Party wishes to restructure the social-ecological system and redistrib-        policy also make this coalition more unlikely.
ute wealth in society, CDU/CSU and FDP are focusing on tax cuts, innovation
and budget consolidation. Among members of the Greens this coalition is
very unpopular, even more than the “Traffic light” coalition among FDP
members. CDU/CSU would like to continue governing but are cautious about
their claim on the day after the election. Within the conservatives, voices
are also being raised calling for a reorganisation in the opposition.

                                                                                                                                                       READ MORE NEXT PAGE
SPECIAL BRIEFING ON PARLIAMENTARY ELECTIONS - Kreab
KREAB SPECIAL BRIEFING GERMANY EDITION 4, SEPTEMBER 2021                                                        01 | 02 | 03 COALITIONS   CONTENT

               WHAT COALITIONS ARE POSSIBLE AND LIKELY?

Other coalition options, such as CDU/CSU–SPD, SPD–Greens, CDU/CSU–Greens
and CDU/CSU–FDP have already been ruled out mathematically.                                PREVIEW
                                                                                           In our next Special Report we will look at develop-
                                                                                           ments concerning the ongoing coalition negotiations.
                                                                                           Which coalition will prevail? Which party will gain
                                                                                           which ministries? Which orientations and agendas
                                                                                           will shape the next government?

                                                                           OUTLOOK
                                                                           For tactical and strategic reasons, a longer
                                                                           phase of initial talks and explorative con-
                                                                           sultations is now to be expected. For the
                                                                           formation of coalitions it will not be the
                                                                           two stronger parties, but the Greens
                                                                           and the FDP, which will ultimately prove
                                                                           decisive. After strongly distancing itself
                                                                           from the Greens in the election campaign,
                                                                           the FDP has already made initial state-
                                                                           ments in which it has come closer to the
                                                                           Greens on climate policy. The two parties
                                                                           have already announced that they will hold
                                                                           initial talks in a small group.

                                                                           An agreement on a possible coalition is
                                                                           not to be expected before the end of 2021,
                                                                           and a coalition agreement will likely not be
                                                                           reached before February or March 2022.

Source: Photo by Christian Lue on Unsplash
SPECIAL BRIEFING ON PARLIAMENTARY ELECTIONS - Kreab
KREAB SPECIAL BRIEFING GERMANY EDITION 4, SEPTEMBER 2021

                          SABINE CLAUSECKER
                          Managing Partner | Kreab Germany
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                          CARSTEN HOLTKAMP
                          Senior Partner | Kreab Germany                           and with our clients.“
                          carsten.holtkamp@kreab.com
                                                                                 		SABINE CLAUSECKER Managing Partner, Kreab Germany
                          Dir +49 (0)30. 81 884 181
                          Franklinstraße 27 | 10587 Berlin | Germany

                          PAUL SCHOTTHÖFER
                          Director of Corporate Communications | Kreab Germany
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                          Dir +49 (0)30. 81 884 141
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