Uncertainty Surrounds German Election Outcome
The upcoming German federal election has never seen such uncertainty over the possible outcome. The main reason for this is the close call for three parties to reach the necessary 5% of the vote to enter the Bundestag.
The FDP is considered the most likely to miss the mark, while the Left and the BSW may both make it. This raises the question of whether the Left can hold onto its three direct mandates, which allowed it to enter the Bundestag in 2021 despite not reaching the 5% threshold.
The direct mandate clause, which was temporarily reinstated by the Federal Constitutional Court, was meant to prevent the CSU from being excluded from the Bundestag despite not reaching the 5% mark. This could have led to an absurd situation where the CSU, which won a majority of direct mandates in Bavaria, would not be represented in the Bundestag.
For the CDU, this is a lucky break. In the 2021 federal election, the CSU, as part of the CDU/CSU alliance, received 5.2% of the vote when extrapolated to the national level, just barely missing the 5% mark.
The SPD, which received 25.7% in 2021, now faces a predicted 14.5-16% of the vote, a 10% point drop. The AfD, meanwhile, is predicted to receive between 20-21%, but the actual result may differ from the polls.
The new Bundestag will have 630 members, a smaller number than the previous one and a majority of 316 is needed for a government. Depending on the outcome of the small parties, it is possible that two parties will not have enough seats to form a government. The only exception is a CDU-AfD coalition, which would have a majority.
A coalition including the Greens would be difficult, as the CSU has categorically ruled it out. A CDU-SPD-Greens coalition is also unlikely, as the CSU would likely lose the decisive votes to play a role in federal politics.
The CDU/CSU alliance has also ruled out coalitions with the Left and the BSW. Practically, this means that if the CDU/SPD coalition does not have enough seats, government formation will be extremely challenging, unless the FDP unexpectedly enters the Bundestag.
The AfD, as the largest opposition party in any scenario, will likely have a significant impact on the new Bundestag, with a high probability of more investigative committees being established, as 25% of the members are required for the creation of such a committee.
The new Bundestag is expected to convene on March 25, with the new members taking office. As long as government formation is delayed, the old federal government will remain in office, albeit with limited powers, as the 2025 federal budget has not yet been passed. The record for the longest government formation, 171 days, was set in 2017 and the current record of 73 days was set in 2021. A swift government formation is only likely if all three small parties fail.
However, external factors may still influence the outcome, as seen in the recent normalization of US-Russia relations, which could put pressure on a course change. For instance, US airlines may resume direct flights to Russia, while European airlines would lose long-haul routes to Asia. Similar scenarios could play out in other economic sectors.
The only way to achieve a course change would be the previously taboo CDU-AfD coalition. The longer government formation takes, the higher the external pressure and the higher the likelihood of a CDU-AfD coalition emerging.