Germany ends 2017 without a government

It was just before midnight on November 19 that Chancellor Angela Merkel’s dream of a so-called "Jamaica coalition" collapsed. The political constellation consisting of the conservative union parties (CDU/CSU), the business-friendly Free Democrats (FDP) and the pro-environment Greens — whose colors together reflect those of the Caribbean country's flag — was to not be.

Christian Lindner, the FDP leader, stood up from the negotiating table in the Parliamentary Association building and declared that his party had had enough. The FDP could not support policies they didn’t believe in, he said. Outside, Lindner said a few words into the microphones, then vanished into the night.

Disappointed and aghast, the chancellor was left with the negotiators from her own Christian Democratic Union (CDU), its Bavarian sister party, the CSU, and the Greens. Merkel thought she had almost secured her fourth term in office, had believed the new Jamaica coalition was possible — and now this. Weeks of exploratory talks revealed political gulfs between the parties that even Merkel, the experienced strategist, couldn’t bridge.

Read more: Angela Merkel fails, yet still comes out on top

Germany is changing

So in 2017 Merkel failed to achieve what she had managed three times before: presenting a new cabinet a few weeks after the election and a sheaf of papers bearing the title "Coalition Agreement." The new distribution of power in the Bundestag had left her with much less room to maneuver after the right-wing populist Alternative for Germany (AfD) entered parliament for the first time, securing 12.6 percent of the vote.

Read more: AfD: Meet the new far-right bosses, same as the old bosses

The CDU, in turn, lost so much support that the only way it could form a dual alliance was with the Social Democrats (SPD). One reason for the CDU's disappointing election result was Merkel’s controversial refugee policy, which had led to a rift with her Bavarian sister party, the CSU, and had polarized German society. Never before had the chancellor been heckled on the campaign trail with shouts of "Get lost!" and "Merkel must go!" Now she had gambled on the Jamaica alliance, in vain. Once again, the prospect of forming a government was wide open.

Merkel: Home alone

Germans are seen as having staying power — in politics, too. Helmut Kohl, who died last year, was chancellor for 16 years. Angela Merkel has been in office since 2005 and feels well qualified to follow in his footsteps. The problem is, she can’t find partners to support her anymore. Her critics say that whoever governs with, or rather under, Angela Merkel gets marginalized, and is essentially governed into the ground.

The last three federal elections clearly demonstrated this. In 2009, after the first grand coalition between the SPD and the CDU/CSU, the Social Democrats' share of the vote dropped dramatically. Then in 2013, after four years in government with Merkel, the FDP didn’t even get the 5 percent of the vote required for representation in the Bundestag, and it took them a very long time to recover. Another grand coalition followed, which again did not pay off for the SPD: On 24 September, 2017, the Social Democrats suffered the worst election result in their history. The once-proud national party plummeted in the polls, gaining just 20.5 percent of the vote.

A brief window for change

Yet 2017 started so promisingly for the SPD. At the end of January, Vice Chancellor Sigmar Gabriel, whom few Social Democrats saw as a heavy-hitting challenger for Merkel, stepped down as leader of the SPD. He presented Martin Schulz, the long-term president of the European Parliament, as his successor and the SPD’s chancellor candidate.

The Social Democrats responded to the decision as if it were a long-awaited omen of liberation. They celebrated Schulz, the former bookseller from Würselen, as their savior and redeemer. The SPD gained thousands of new members. Schulz was elected party leader with a sensational 100 percent of the vote. The Social Democrats shot up in the opinion polls, and at times they were put ahead of the CDU. It seemed that the winds of change were blowing.

But the Schulz hype turned out to be just a flash in the pan. One after another the SPD lost state elections in Saarland, Schleswig-Holstein, and in the party heartland of North Rhine-Westphalia (NRW). The political rule of thumb is that you can’t win on a federal level if you lose in NRW.

And it proved just so: Angela Merkel remained unfazed by the euphoria around Martin Schulz; she made up ground in the polls and by early summer was clearly ahead again. For his part, Schulz failed to capitalize on being a fresh face on the domestic political scene and not having been part of Merkel’s coalition cabinet. He misdirected his energy during the campaign and didn’t press the chancellor hard enough on policy detail.

Read more: German Social Democrat: 'We failed miserably as a party'

On election night, when it became clear that the SPD had suffered heavy losses, Schulz took appropriate action. Addressing his supporters at party headquarters in the Willy-Brandt-Haus, he announced that the grand coalition had been voted out. His words were met with a storm of applause. "I have therefore recommended to the SPD party leadership that the SPD should go into opposition," he said. In opposition, his party would "fundamentally reposition itself" and put clear blue water between itself and the CDU. It hadn't been possible to do this as part of a coalition government, he said.

Steinmeier opposes fresh elections

But when the Jamaica idea bit the dust, Martin Schulz’s phone rang. German President Frank-Walter Steinmeier asked the SPD leader to visit him at his residence, Schloss Bellevue — along with the party leaders of the CDU and CSU. From that point on, the SPD could say goodbye to the prospect of regenerating in opposition. The head of state’s message was clear: As the second-largest party in parliament, the SPD also shared some of the responsibility for ensuring that Germany got a stable government again. Failure to form a coalition and consequent new elections were not, he said, an acceptable solution.

So, once again, all eyes are suddenly on the SPD, the party which Merkel described after the vote as "not fit for government." There’s no talk of that now, not since the power-conscious CDU leader started homing in on the "Grand Coalition 3" project, dubbed "GroKo 3." Merkel’s party backed her when the Jamaica exploratory talks collapsed. The CDU also resolved its quarrels with the CSU. All that’s missing is a coalition partner.

'Open-ended talks'

Schulz was forced to make a move. Eventually he announced that he was prepared to enter into "constructive, but open-ended" exploratory talks with the CDU. At the SPD party conference he was given a mandate to negotiate, but many Social Democrats urgently warned against entering into a grand coalition under Merkel’s leadership for a third time. They fear the SPD would not be able to implement key elements of its program, such as greater state coordination of health insurance or allowing refugees' immediate family members to join them in Germany.

In its unease about a repeat of the unpopular dual alliance, the SPD is now putting forward alternative models, such as a so-called cooperation coalition, which would only commit to certain common goals, leaving contentious points open. Merkel isn’t keen on these proposals. A grand coalition would have a clear majority of 399 in the new Bundestag, which now comprises 709 representatives, making it the largest in history. If she can’t bring about a coalition agreement, Merkel will be on shaky ground. It’s far from given that the CDU would still close ranks behind her if another election were called.

New talks in a new year

For now, the situation remains unresolved. The majority of voters don’t like this. Business leaders are pressing for a solution, and allies in Europe are raising their eyebrows. French President Emmanuel Macron recently wished Angela Merkel "bon courage" — good luck. His plans for reforming the EU can’t progress without a new German government.

Exploratory talks are set to begin on January 7. Schulz has promised his party that he will include it at every step, so he wants to hold a congress to get the approval of party delegates before exploratory talks would progress into formal coalition talks. The bigger hurdle, however, would come after that: The SPD’s 440,000 members will be allowed to vote on whether or not it should enter into another grand coalition. The general prognosis is that there is little chance of a new government being in place before Easter. So the extraordinary election year 2017 ends with the old grand coalition carrying on with business as usual, until the new grand coalition has — perhaps — been cobbled together.