2021 German federal election: Implications for development cooperation

On September 26, 2021, Germany held a historic federal election. With Angela Merkel stepping down after 16 years in power, this was the first election since World War II in which an incumbent Chancellor did not stand for re-election. The result was a volatile and unpredictable race.

After a remarkable come-back, the center-left Social Democrats’ (SPD’s) candidate for Chancellor, Olaf Scholz, claimed victory, defeating the conservative Christian Democrat bloc’s (CDU/CSU) candidate, Armin Laschet, by a small margin of 1.6 percentage points; however, neither party won a large enough share of the vote to govern alone, meaning that either could lead the next government if they find the necessary allies to build a majority. Both the Social Democrats and conservative bloc have announced that they want to be at the helm of Germany’s next government.

Due to the distribution of votes, it would be almost impossible for either party to form a coalition without the environmentalist party, the Greens, and the business-friendly Free Democratic Party (FDP). Therefore, these two parties will play a key role in deciding what the next German government looks like. While the Greens favor a “traffic light” government (SPD, Greens, FDP), the FDP would prefer to be part of a “Jamaica coalition” (CDU/CSU, Greens, FDP). First exploratory talks between the parties indicate a traffic light coalition is the most likely outcome.  

All parties in the likely coalition agree on the 0.7% ODA/GNI target but have different priorities

All three parties involved in the potential traffic light coalition are committed to the international target to spend 0.7% of Germany’s gross national income (GNI) on Official Development Assistance (ODA); however, within development cooperation, the parties’ focus areas differ.

  • The Greens' key priority is combatting climate change globally. The party suggests spending €10 billion (US$11.2 billion) on international climate finance annually. They would like to finance a global transformation by pooling expenditures for development cooperation, international climate finance, and parts of humanitarian assistance.
  • The FDP is a strong supporter of multilateral development cooperation. The party aims to support multilateral initiatives focused on “least developed countries” (LDCs) and to spend 0.2% of Germany’s GNI to fund multilateral initiatives by 2030, at the latest.
  • The SPD prioritizes development programs focused on LDCs, to which the party would like to allocate 0.2% of GNI.

One substantive difference between the Greens and the FDP is their position on fiscal policy, which could determine Germany’s future level of ODA. While the FDP wants to maintain Germany’s constitutionally enshrined 'debt brake', limiting the country’s annual new debt to 0.35% of its gross domestic product (GDP), the Greens have pledged to reform the debt brake to allow for more flexibility in deficit spending. Increased flexibility in deficit spending would increase the chances that Germany would be able to maintain its current ODA levels.

The stark differences between the parties in key areas such as fiscal policy, energy, and the economy mean that governing negotiations are expected to be lengthy and complicated. Amidst these competing interests, the topic of development cooperation is at risk of falling through the cracks during the negotiations. It is now up to the German civil society organizations (CSOs) and development advocates to ensure that development cooperation is prominently anchored in a future coalition treaty by reminding the negotiating parties of Germany’s global responsibilities.

Until a new government is formed, Germany lacks leadership on the international stage

Until a new coalition is formed, the outgoing government will remain in office as a 'caretaker government' led by Merkel. Merkel, as acting Chancellor, will continue to represent Germany on the international stage, including the G20 summit in Rome at the end of October and the 2021 United Nations Climate Change Conference (COP26) in Glasgow in November; however, given the political constraints of the caretaker government, Merkel will hardly be able to set the tone at these summits. While the caretaker government can pay all expenses necessary to maintain legally existing institutions and to finance legislative measures that have already been adopted in the 2021 budget, the caretaker government will be reluctant to make new funding commitments. 

With Germany’s upcoming G7 Presidency in 2022, the pressure is on for parties to form a new coalition in a timely manner. Depending on how long it takes to agree on a deal, the new governing coalition might be forced to hit the ground running.

 


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