There are two conclusions to be had from the thumping victory German Chancellor Angela Merkel won for her Christian Democratic Union: There will be no sudden change in her policy on the euro crisis, and you have to hope that she holds onto the finance ministry in her next coalition government.
Given that I think Merkel’s euro crisis policies are misguided and involve far more risk to Europe and the German taxpayer than they have been led to believe, that may seem counterintuitive. Shouldn’t Germany's leader have more flexibility now that the elections are over? And if you don't like her economic policies, shouldn't you root for a change of finance ministers?
Merkel’s remarkable 41.5 percent win is a vote of confidence in precisely the minimalist euro crisis policy she has been following, and that came through in the language Merkel used after the result. True to her modest style, Merkel didn’t hail any kind of triumph, or even note that she has performed the unique feat of driving all center right challengers to the CDU and its Bavarian sister party from parliament for the first time in more than 50 years. No, Merkel said she would “treat this result with great care,” and would be sure that anytime that the euro crisis “will cost something, I’ll say so.”
For Merkel, the anti-euro Alternative fuer Deutschland party, which nearly made it over the threshold to take seats in parliament after just a few months in existence, will be a significant concern. The 4.7 percent that the party scored without question pushed Merkel’s previous coalition partners, the pro-business Free Democratic Party, under the 5 percent barrier. They are a new threat.
If things go wrong with the euro and Germans blame Merkel for spending too much of their money on feckless Greeks and Spaniards, the AfD will gain at her expense. This highlights the fragility of a victory that rests as much on luck as on her undoubted political acumen. The German economy has surged through the financial crisis for reasons that have little or nothing to do with her policies, and the euro crisis remains a threat because she has blocked the policies required to resolve it. In 2012, for example, an anti-bailout party came within a hair of winning power in Greece. Things could have turned out differently.
Merkel in essence now has to choose between two potential coalition partners, the left of center Social Democratic Party and the more left of center Greens. The first seems more likely, and tradition states that the junior coalition partner gets one or both of the two top jobs after Chancellor -- foreign minister and finance minister.
In the last government, the Free Democrats secured the foreign ministry, where Guido Westerwelle was an unmitigated disaster. Just to name one mistake from which the German foreign policy establishment is still reeling, Westerwelle managed to leave Germany separated from its allies and in lock-step with Russia and China by abstaining on the vote to support a United Nations mandated no-fly zone in Libya in 2011. It may be true that the intervention in Libya didn’t work out so well, but Germany paid a significant cost for its abstention in terms of trust among its North Atlantic Treaty Organization allies. It is still paying for the misstep -- for example, by providing the patriot missiles requested by Turkey during the Syria crisis. German foreign policy has been a vacuum that now needs filling.
The Social Democrats have good candidates for both jobs. Frank Walter Steinmeier was foreign minister in Merkel’s last grand coalition government, from 2005 to 2009, and would be a huge improvement on Westerwelle. Yet he may not want the job again. Peer Steinbrueck, the SPD’s failed candidate for Chancellor, also worked with Merkel in her first coalition, as finance minister. But he has ruled out working for Merkel again.
That leaves Sigmar Gabriel as the most likely first pick for the SPD for either job -- as party chairman he should have the first choice. He doesn’t have a finance background (he was environment minister when the SPD were last in government), and his party has campaigned for election on a policy of tax increases and higher spending, which doesn’t seem to be doing so well in France. And while the euro crisis needs better policies, it needs a strong German economy more.
There is an outside chance of a good SPD minister to run the economy in Joerg Asmussen, currently on the European Central Bank’s executive board. But as a non-politician, he is unlikely to get the job. So, boringly, and unhappily for Europe, another four years of Wolfgang Schaeuble is looking like the most likely outcome.
(Marc Champion is a Bloomberg View editorial board member. Follow him on Twitter.)