The German election is fast approaching and with the current polls and coalitions are practically inevitable. The 2013 Grand coalition – CDU/CSU and SPD was effective and the government was successful in implementing a lot of legislation in a harmonious way.
Even at times of conflict such as the dual citizenship, both parties have arrived at a harmonious consensus.  Their key achievements being some constitutional reforms, parental leaves, retirement age, minimum wage and the phasing out of nuclear power.
Is another grand coalition good for Germany?
In general, the grand coalition was successful and Germans enjoy a smooth period under the CDU/CSU-SPD government. However, both parties are not very keen to discuss a remake during the campaigning period as there is little left to collaborate on.
The question that arises is whether the grand coalition is preventing Germany from enjoying a liberal democracy. Controversial issues are normally avoided during grand coalition and there is no strong opposition to address difficult matters.
CDU/CSU and SPD are the strongest parties in parliament. Even though the popularity of the German socialist party has decreased overtime, the appointment of Schulz at the beginning of the year has increased the party popularity to record high.
Early March, SPD narrowed the gap with the chancellor to 2%-3%. It might be related to the unpopular migrant crisis where Mrs Markel faces backlash and failed to project a good image.  However, Angela Merkel has managed to widen the gap during the recent months.
 

 
It is unlikely that coalitions could be avoided, any coalitions will not drastically change the management style of Germany in relation to the current government. it might have a more bigger impact on the western economies.
 

Possible coalitions

CDU/CSUand SPD

Despite being very popular over the last 4 years, CDU/CSU and SPD is not in favour of another another coalition. Both parties have performed a lot of work together during the first 4 years avoiding controversial topics and it is difficult to foresee what else can both parties collaborate on.

CDU/CSU and Green

Suggested by the finance minister and already partners in 4 state governments, this coalition is highly probable.

CDU/CSU and FDP

A Liberal party and a democratic party has been popular and worked in the past. But FDP failed to reach the percentage threshold and left without a representation in Bundestag in 2013 federal election.

CDU/CSU, Green and FDP

Such a “Jamaica” coalition is a possibility Merkel is ready to explore. It will be a challenging coalition that includes a pro-business and eco-friendly party.

SPD, the Left and the Green

The left wing has never formed such coalition before and they did have the possibility to form such a coalition in the last federal election but SPD choose to join the CDU.

SPD, FDP and Greens

Known as the traffic light after the colors is the favourable outcome by the German socialist party.

 

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By: Deepta Bolaky
GO Markets