Merkel's back for Germany. What does that mean for Europe?

Across Europe, governments have had Sept. 22 on their agendas for months.

It wasn't to mark any event at home, but rather Germany's federal election: German Chancellor Angela Merkel has been loath to push any policy in the European Union that would perturb her electorate. And thus “what's next” for the EU has effectively been on the back burner for the past half a year.

Ms. Merkel won a stunning victory last night, almost capturing an absolute majority for the first time in over 50 years. She ultimately came just short of that feat, so her conservative Christian Democratic Union (CDU) will have to forge a coalition, most likely with the Social Democrats (SPD), which trailed more than 15 points behind.

But her strong mandate is clear. Last night's results put Merkel on course to surpass Margaret Thatcher as the longest-serving female elected leader of Europe. They also seal her position as the world's most powerful woman, putting Europe's destiny more squarely than ever in her hands.

But Europeans expecting major changes from Germany postelection, even with a government that turns leftward with a possible SPD coalition, are most likely going to be disappointed, say European analysts. A coalition could take months to build, delaying any forthcoming changes. And ultimately Merkel won such a clear mandate because Germans like her slow and hesitant approach on Europe. 

Ulrike Guérot, the German representative for the European Council on Foreign Relations, says that “there is a mismatch of expectations” between what Europe seeks from Germany and Germany's ability to follow through.

Europeans, who historically wanted Germany restrained, now expect it to play a leading role in forging a more functional Europe. Germans, however, prefer to lead by example, rather than dictate, says Ms. Guérot. “Germany's influence on the system has grown, and this is a new situation for both sides.”

Status quo

The CDU won 41.5 percent of votes, making it their strongest outcome since 1990 and exceeding preelection expectations. They trounced the SPD, which garnered only 25.7 percent of votes. Given the imbalance, many analysts expect the status quo, even if the CDU and SPD form a so-called grand coalition.

On Europe, that means further caution on the part of Berlin, which will likely continue to follow Merkel's “step by step” approach to dealing with the eurocrisis, demanding that ailing economies of the south undergo deficit cutting and economic reform in return for being “bailed out.”

That also means Germany will continue to move slowly on the next big reform in Brussels, a banking union, and perhaps even more slowly now with signs of EU weariness appearing throughout Germany.

Merkel's caution is in part a natural inclination, but she is held back by the political structure of Berlin, with parliamentary oversight and a constitutional court that must weigh in on Germany's plans to shape Europe. But perhaps the biggest obstacle to change is the German mind-set – underscored by election results – that Germany is giving enough, but not too much.

“Germans are afraid of the side effects of the eurocrisis, and they believe that Ms. Merkel was able to protect German money against the demands of foreigners,” says Gero Neugebauer, a political scientist at Berlin's Free University. “[Germans] believe we should help [ailing economies], but they have to contribute to their own fates first.”

That position has been causing widespread discontent in some pockets of Europe. Struggling countries have pointed to Germany as the reason that they are having such a hard time returning to job creation. The 2013 Transatlantic Trends survey by the German Marshall Fund of the United States showed that Europe was split over Merkel's handling of the economy, with 47 percent of Europeans surveyed approving and 42 percent disapproving. There was sharp disapproval in Spain, Portugal, and Italy, at 82 percent, 65 percent, and 58 percent respectively.

"The perception that the majority has of Merkel [in Spain] is that she is the one driving the politics of austerity, the one demanding social spending cuts,” says Jaime Pastor, an expert on political science and social movements in Madrid. Germany demands that Europe become more like Germany, he says. “But not all countries are in the position to do this.”

First things first

Before anything happens in Europe, first the CDU will have to forge a coalition, after their current partners, the Free Democrats failed to make it into the lower house, or Bundestag, in a stinging defeat for the market-friendly party. The CDU will now likely turn to the SPD. But the two will have to undergo tough negotiations, which could take months. Support for the SPD fell after the last grand coalition during Merkel's first term in 2005, and in this election the domestic policies between the CDU and SPD have split, especially over issues of minimum wages and taxes on the rich.

"Given the issues that we set out and those that the CDU focused on in the campaign... [achieving a grand coalition] is very, very difficult," SPD vice chairwoman Manuela Schwesig said on local radio.

If they do successfully form a coalition, there is not likely to be radical change on the European front, despite hopes in some corners that SPD representation in the German government could mean more leftist policies on Europe.

All of the major German parties supported Merkel's approach on rescue packages when it appeared that the euro might not survive, and so they would have a hard time doing an about-turn now, says Andreas Busch, a professor of politics at Göttingen University. And “Merkel wouldn't accept a coalition that forced a major U-turn,” he adds, noting that any abrupt change would run counter to her very essence.

“She is steady as she goes,” driven by a type of Protestant ethic “that hardship will ultimately bring improvement,” Dr. Busch says.

Voters in Berlin, who sought a change from the status quo, agree that a coalition between the CDU and SPD means virtually no – or at most, very subtle – change. “A grand coalition is not going to change a thing,” says Sophie Wennerscheid, outside of a polling station in a gentrified neighborhood of Berlin. She voted for The Left, which ultimately got 8.5 percent of votes. The Greens, another popular party in bourgeois areas of Berlin, got around 8 percent.

New moves in Europe and abroad?

Merkel has already overseen the deepening of European economic integration, notes Jan Techau, the director of Carnegie Europe in Brussels, in a recent opinion piece in The New York Times.

But last month she announced that perhaps it was time to return powers to national governments from Brussels. It is unclear what that might actually look like, but it reflects growing weariness of EU bigfooting overall, which has been noted in several polls.

One released last week by Open Europe and Open Europe Berlin, conducted by YouGov Deutschland, shows support among Germans for slimming down the EU. By a margin of 2 to 1, German respondents said the next chancellor should push for decentralizing powers from the EU to national, regional, or local levels.

That might be one reason that the euroskeptic Alternative for Deutschland party nearly crossed the 5 percent threshold to make it into parliament, after just arriving on the scene this winter. They received 4.9 percent of votes.

This political fragmentation in Germany might make it harder for Merkel to navigate. But Mr. Techau says that he has three hopes for the next government: that it invest more in foreign policy and NATO, so that Germany becomes a stronger contributor both intellectually and politically; that it finish the political construction that was put in place to deal with the crisis, including the banking union; and finally that it “will come up with a clearer idea of how Germany envisions the political shape of postcrisis Europe,” he says.

The first might be hardest, as Merkel's desire to keep Germany out of foreign crises, most recently in Syria, is widely supported in German society.

But if the crisis flares again, she might push some bolder moves on the EU front. She might also do so as she looks toward her legacy. “The biggest 'if' is 'will she use the capital which she has accumulated over the past years to do something really bold after Sept. 22?' ” says Stefan Kornelius, international affairs editor at Süddeutsche Zeitung who just wrote a book on Merkel.

“The eurocrisis will be the most decisive policy of her life. Whether she manages to solve it, or gets lost in it, will [determine] how she is viewed in history,” Mr. Kornelius says.