Germany’s opposition Social Democratic Party has finally picked a leader to be its candidate for Chancellor in next year’s general election—former Finance Minister Peer Steinbrück.
Steinbrück is from the SPD’s more conservative wing and, in fact, is best known for having served as finance minister in Merkel’s first Cabinet—a grand coalition between the Christian Democrats and the Social Democrats. In that capacity he disparaged “crass Keynesianism” and got bad press from the English-speaking left. The SPD is way behind the Christian Democrats and with the Germany economy humming along nicely there seems to be little real hope of winning the election. But in Germany’s multiparty system that’s not all there is to it. Right now Merkel is governing in a coalition with the her party’s traditional partners, the Free Democrats, but their popularity has collapsed and the Green Party is doing well. If those poll numbers hold up, they mean that a third Cabinet Merkel would be another grand coalition with the SPD (like her first Cabinet) rather than another conservative coalition like Germany has now.
Whether or not that’s the right choice for Germany, it’d almost certainly be a better outcome for the world at large. The Free Democrats represent some of the most euroskeptical elements in Merkel’s coalition, and a grand coalition would be more likely to offer generous terms to southern Europe and minimize global financial distress.