Unlike Germany, New Zealand is a tiny country in which little of note occurs.
But we are both successful societies, with proportional democracies, strong economies, underpinned by strong public institutions and legal frameworks, and consistently believe that we are going in the right direction.
New Zealand is one of no more than a handful of countries with that combination who are also led by a highly redistributive Labour Party. Not that we the singular shining beacon in space, but it’s pretty solitary out here.
For the sake of sustaining our compact, it might be tempting to do what Germany’s Social Democratic Party (SD) is doing with the Christian Democratic Union (CD): unite together in coalition rather than see the irreversible fall of the European Union and the entire project of social democracy.
For the SD it comes down to this: the world is lost and there is stuff worth saving for as long as we can even if it really costs us. For the CD: stay in power.
For Germany, undisputed leader of the European Union in both social innovation and in economic strength, the race to save itself is particularly pressing because it has no proper government.
To sustain the giant and enduring political and social culture of Germany, some great bind needs to hold. Enter Martin Schulz, the leader of the Social Democratic Party of Germany (SD). Schulz’s party, which governed together with Angela Merkel’s Christian Democratic Union (CD) in a grand coalition for eight of the past 12 years, suffered its worst electoral result since the late 1940s in the most recent German parliamentary contest.
Here we need only be reminded of how much cost such a pact entails. In the great poem “Faust” by the German poet Goethe, Faust the learned scholar feels that none of his many achievements have provided him with real satisfaction or fulfillment. He yearns to gain fundamental satisfaction and meaning. Faust turns to magic in the hope of finding some way to get it, and only the devil can really cut that deal. So he agrees to sell his soul if the devil can give him that great moment of experience that everything in his life finally fits, reveals its total truth, and he wills it to stay forever.
The Faustian pact has high cost and reward. With only a few exceptions, social democratic parties have been steadily losing ground in Europe since the 1970s. Nevertheless, those center-left parties have played a critical role in anchoring the working-class vote to the welfare state domestically and to the European project across the continent. Social democratic parties have also been central actors in integrating immigrant communities into the democratic electorate and in maintaining pressure against the rise of income inequality. To some extent, Europe’s social democrats are the victims of their own success. They managed to create a broad consensus around the need to balance capitalism’s excesses with active government intervention. Same in New Zealand, and we only got back into power this time by the skin of our teeth.
By governing in a national coalition with center-right Christian Democrats for eight of the last 12 years, Social Democrats have often had to compromise against the interests of their traditional working-class base. Tainted — some would say corrupted — by power, they have become less pure and less effective as a progressive movement in German politics.
It’s something like Labour going into government with National. If Little hadn’t resigned and Labour continued tracking downwards from 20-something per cent, the same conversations would be in play here right now. It would probably be a disaster here as it has been for the SPD, but may also have been necessary for the centre left to survive in government in any form.
It is necessary at least in Germany, and in policy terms it would not be too hard in New Zealand either. Most of our remaining arguments are about how to redistribute taxes rather than any notable structural reforms, and the basic social compact is well set. Labour will never get in power again without coalition anyway – it’s merely a matter of who.
Schultz was damaged by his ballot-box defeat in September and immediately announced his intention to have the SPD spend the next four years on the Bundestag’s opposition benches. This left Merkel with the unenviable task of cobbling together a so-called “Jamaica” coalition (black-yellow-green) with the liberal Free Democrats (who are the yellow to the black of the Christian Democrats) and the Greens (who are, well, green), and it all died. This leaves only one realistic possibility to form a coalition government that does not include the far-right Alternative for Germany (AfD).
In a country that prides itself on its stability culture and lack of political drama, the SPD is now being forced to rethink its strategy of rejuvenating its forces in opposition. German President Frank-Walter Steinmeier — himself a Social Democrat — made it clear that he sees finding a workable majority as a political obligation for any major party worthy of its name. Caught between the call of national duty and the need to revamp their waning electoral support, Schulz and his colleagues are now faced with three choices:
Alas, it is not hard to guess what those options will bring. Another grand coalition will be near-fatal for the SPD, because it would deprive the party of its distinctive identity in the eyes of the voters. A minority government would achieve little and be picked off next time. The third option is just a big roll of the dice for everyone.
The bind for the SPD is this: don’t go into coalition and have some chance of keeping your existing if declining voter base, but then give Steinmeyer as President and Merkel the perfect scapegoat for the collapse of the government and the requirement for future elections.
Like New Zealand, Germany is one of those rare countries with a bit of a budget surplus. The SPD could seek that surplus get spent on targeted tax cuts for working people. The SPD could also insist that they double down on their climate commitments. Or insist on family reunification for the over 1 million Syrian refugees. They will need an almighty and magical mix of policy wins to get some of their lost votes back. If they don’t, they will go the way of the organised left across Europe.
Prime Minister Ardern is already seeking to form a common pact with National about poverty. This would build on common policies on NZSuper and superannuation, trade, international relations, Treaty partnerships, agriculture, economic sectoral intervention, conservation and national parks, infrastructure other than irrigation, and many more areas besides. The big compact is by no means unimaginable.
But in Germany they get to dare a little greater. On Europe, Martin Schultz wants to see a United States of Europe by 2025. Big call especially in the current climate in which the EU immigration-sharing quota system just died. New Zealand is largely keeping its head down on immigration letting Australia simply handle all its quandaries and hard tasks. New Zealand also doesn’t face a hard anti-immigration party like the Alternative for Germany, so the risk to real political tilting is small.
Germany and the SPD find themselves at the crossroads. While it is Angela Merkel who seems to be the only one holding the cards having just won a fourth consecutive electoral victory for the CDU, in many ways the SPD holds the key to the future of Germany and the future of Europe.
New Zealand is, for better and for worse, one of the very few remaining countries whose institutions, economy, and society are strong like Germany. We are now led by a strongly redistributionist Labour government.
For Germany and New Zealand, cross-parliamentary coalitions are the greatest, riskiest Faustian bargain.