Kasper
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Now that Merkel has declared that she'll run again it's about time that we have a thread about this in here. Obiously it's not as thrilling as the US elections and not too many users will be interested (I expect at least one proper rant from @PedroMendez about the incompetence of the SPD, otherwise I'll be disappointed) but anway, it's still Europe's biggest country after all.
A little background information about the government and the electoral system:
(it's from 2013 but the system is the same anyway)
For those who can't watch it, it's a Mixed Member Proportional system.
The Bundestag has 598 seats. Half of them (299) are elected in single-member constituencies by first-past-the-post voting, while the other 299 members are allocated from party lists to achieve a proportional distribution in the legislature. That means as a voter you vote once for a constituency representative, and a second time for a party. If a party receives more seats than its vote share entitles it to (overhang seats), additional "compensatory" seats are added to the total of 299 to give other parties a proportional number of seats.
The main important parties (there are loads but I'll only list the relevants):
CDU (+CSU)
Merkel's party. They've been in government now since 2005 with different coalitions. They stand for liberal conservatism, in Germany they're basically middle-right in an international sense they've become very centrish (they're closer to the Democrats in the US than to the Republicans for example).
SPD
The social democratic party, traditionally the second biggest party in Germany. They're the junior partner in the government coalition right now and were the last to have a chancellor before Merkel took over (Schröder, from 1998 to 2005). They're very comparable to Labour in Britain, once representing the working class they've moved further and further to the center to appeal for more votes and kinda lost their way by doing that. Will most likely still get the second most votes but it's highly highly unlikely that they'll take over from the CDU.
The left
Democratic socialism, left-wing populism. The party furthest to the left in Germany (not counting some small marxist/communist parties). I've listed them third since they got the third most votes in 2013 but they can easily also get 5th or 6th, hard to tell right now. They've got a lot of voters from the SPD in recent years and they're the only party in parliament right now that regulary criticize Germany's foreign policy. Examples are criticism of the EU burocracy/lobbying (although they don't want to leave the EU), anti-NATO stance, etc.
The Greens
As the name alreadys says, they stand for green politics. They kinda stand between the SPD and the Left, they've also become a lot of more mainstream which has cost them a bit in recent years, since - despite their socialist policies - they can't really connect with the working class (who vote either SPD or the Left) and therefore mostly have a basis amongst students and the liberal intellectual middle/upper class. There are a lot of rumours around that they would consider forming a coalition with the CDU after the election (which was unthinkable 20 years ago) but we'll see.
The FDP
The "Free democratic party" also known as the liberals. They've some funny similarities with the british LibDems. They were in government as a junior partner from 2008-2013 but suffered heavily from this term as 2/3 of their voters ran away at the 2013 election and they failed to reach the 5% threshold to enter parliament for the first time since WW2. They claim to have a liberal position but they've kinda gotten the image of the "party of the rich" as their policies were mostly about economic liberalism (low taxes, privatisation, free unregulated markets, etc.). It's going to be interesting if they get back in, if they do they'll definitely the first choice for the CDU to form a coalition.
AFD (Alternative for Germany)
And finally, the much talked about Alternative for Germany. New founded party in 2013, they started as a eurosceptic, neoliberal party and have since then become increasingly right-wing populistic. They established themselves during the refugee crisis as the supposingly "only alternative" to Merkel's politics and therefore stand for anti-immigration politics. Ironically they're also very hardcore neoliberal and anti-socialist yet get a lot of votes from people who'd suffer under their political agenda. It's hard to tell right now where they end up, I think everything from 10-25% is possible but it's highly unlikely that they'll end up in government since every other party has ruled out to build a coalition with them.
So, the SPD is still deciding who they'll set up as their chancellor candidate, the favorites are Sigmar Gabriel (the one on the right on the picture), who has been chairman of the SPD since 2009, and Martin Schulz, who has been president of the European Parliament since 2012. Olaf Scholz has an outsider chance. It's highly unlikely tho that either of them will end up as the chancellor, Merkel is just too strong.
More interestingly is, what kind of coalition we'll end up with, I'll list the options below:
CDU/SPD (The grand coalition) - It's been the government coalition of this term and could happen again. They'll quite likely have enough votes, question is if the SPD wants to be again the junior partner.
CDU/FDP - Coalition from 2009-2013. Both parties would be up for it but's its highly questionable if they get enough votes.
CDU/Greens - Would be something new, there are a few rumours about it. CDU and Merkel would probably be up for it, not so sure about the Greens. Bit unlikely that they'll have enough seats anyway.
CDU/FDP/Greens - The Jamaica coalition. A mixture of the two above. Given that Greens and FDP make the 5%, it could be possible, I don't think that either the Greens or the FDP would be too thrilled about the perspective tho.
SPD/Greens - Was the coalition from 1998-2005 and both would probably be up for it again. Highly unlikely to get enough seats tho, a lot of would've to change in the next year for that to happen.
SPD/FDP/Greens - Traffic light coalition. Not really likely, as the FDP would probably block that.
SPD/Greens/The Left - A lot of people on the left have asked for this for quite a while (and they would've had enough seats in 2013) but for some reason the SPD keeps ruling this option out before the election, mostly because of "The Left" stance on international politics. So still quite unlikely, although I wouldn't rule it out.
Anything else is basically impossible, since no one wants to enter a coalition with the AfD.
Important note: The meaning of the term "liberal" in Germany (Europe) differs quite a bit from how it is used in the US/around the world. See the posts from @ctp and @Rawls on the first page.
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