German elections: Little change for EU

Be it progress on the banking union, a third bailout for Greece or an exit strategy for Ireland when it leaves the bailout programme, the standard line in Brussels is: "after the German elections."

And yet hopes for a dramatic shift in Germany's stance in Europe after these elections are likely to be disappointed.

On Europe, there are no major differences between Chancellor Angela Merkel - who is seeking reelection for a third mandate - and her Social-Democratic rival, Peer Steinbrueck.

Steinbrueck criticises her piecemeal approach and says he would have been more honest with the German public about the real cost of the euro-rescue.

But, as a former finance minister, he also insists on countries sticking to strict fiscal rules and opposes the idea of Germany handing out blank cheques or mutualising debt across the eurozone.

After a series of gaffes culminating with a picture on the cover of Sueddeutsche Zeitung where he shows the middle finger, Steinbrueck has failed to boost his or the party's popularity ahead of Merkel and her Christian Democrats.

But even though she remains the preferred chancellor for over half the population of Germany and her party is tipped to get the most votes in the elections (39% in the last polls), Merkel will have to seek a coalition partner - a quest which may last a few weeks.

After a bruising defeat in the Bavarian elections last week, where they failed to make the 5 percent threshold to enter the regional legislative, Merkel's current coalition partner, the liberal Free Democrats, are now desperately campaigning for all possible vote.

In the most recent opinion poll, the Liberals were down to five percent, which suggests that if their campaign fails, they may not make it in the Bundestag.

This would leave Merkel with two options - the most likely being a grand coalition with the Social Democrats as she did in 2005, when Steinbrueck became her finance minister.

But the SPD may resent teaming up with Merkel again, as their last experiment cost them more votes than ever in the last elections, in 2009. Steinbrueck has already rejected the idea of a grand coalition under his watch, but other leaders in the SPD may agree to it.

If the SPD stands firm and prefers to remain in opposition, Merkel may try and woo the Greens into a coalition government. This is scenario is deemed as unlikely because even though her Christian Democrats have embraced the number one topic of the Greens - closing down all nuclear plants in Germany - they diverge on taxes and social policies.

Other unlikely scenarios are a minority government between the Social-Democrats and the Greens with parliamentary support of the leftist Linke party. A proper coalition with the Linke is being ruled out by both the Social-Democrats and the Greens because of the party's Communist past in former East Germany.

If the Liberals do make it in the Parliament, they also may try and bargain a better deal out of Merkel by threatening to switch sides in a coalition with the Social Democrats and Greens.

"I think the dreams of southern Europeans will remain unfulfilled. Whatever the outcome of coalition talks, there will certainly be no eurobonds tomorrow," Ulrike Guerot, an expert with the Berlin branch of the UK-based think tank European Council on Foreign Relations, told this website.

She pointed out that even Steinbrueck has suggested that no further debt mutualisation is possible without changing the EU treaties - a long process with an uncertain outcome.

Guerot also noted that Merkel may in fact be the better choice for those who hope Germany will shift away from austerity to more social policies.

"The woman who can push for more leftist policies is her. She is the one who can get everyone around a table - trade unions, the Bundesbank, the Constitutional Court in Karlsruhe. A red-red-green coalition (Social democrats, Greens and Linke) would not make it because it would be very unstable," Guerot said.

Anti-euro wildcard

Meanwhile the newly-founded Alternative fuer Deutschland (AfD), calling for a breakup of the eurozone, is trending at around three percent in the polls, not enough to make it in the Bundestag, but perhaps enough to deprive Merkel and her Liberal allies of the percentage points needed to remake their alliance.

Speaking to foreign journalists in Berlin last week, the head of the Forsa polling company, Manfred Guellner, said that as a pure anti-euro party AfD had no chance of entering the Bundestag.

"But meanwhile AfD has broadened its discourse to latent right-wing extremist messages playing on the fears of elderly people and on conspiracy theories," Guellner said.

According to Forsa surveys, AfD supporters are up to 70 percent male, most of whom are over 60 years old, well off and not belonging to a specific religion.

Guellner also pointed out that polled people may be reluctant to admit they would vote for AfD. "So the numbers here are obscure. AfD polls at around three percent but it could be more," the pollster said.