European Central: The Germans Voted And Coalition Building Begins

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Germany's most competitive election in 16 years may be over, but coalition building continues. For the first time in 16 years, Germany's chancellor will most likely not be from the Social Christians, Angela Merkel's party. The Social Democrats won by a small margin of 1.6 percent over the Christian Democrats. As this percentage of the vote is not enough to rule alone the Social Democrats must work out a ruling coalition with other political parties in order to win an absolute majority when the vote occurs in the Bundestag. If a candidate wins the majority of the vote, the Federal President will appoint the winner to the role of Chancellor within 7 days of the vote.

Germans do not directly vote for a Chancellor but it is clear during the election who will become Chancellor of each party— if they were to win the largest percentage of votes in the Bundestag and successfully build a coalition. As the Social Democrats won 206 versus 196 seats that the Christian Democrats won, as long as they can build a coalition it is likely that Olaf Scholz will become Chancellor.

An interesting aspect of German elections is that 299 members of the Bundestag are elected by receiving the most votes in each constituency. The rest of the members are elected by a party list in each of Germany's 16 states. In order to be a part of the Bundestag, a political party must win a minimum of 3 of the 299 constituency seats or 5% of the party list vote. This threshold is a common mechanism in European countries to prevent smaller and more extremist parties to gain political power solely to prevent legislation from being passed. The threshold to enter power however differs from country to country and may change over time.

For Germany, the AFD has met the threshold multiple times now. In the most recent election, the AFD will have 83 seats in the Bundestag. AFD will still most likely not be in the ruling coalition as five potential coalitions all exclude the party. AFD receiving 10.3 percent of the vote makes it more likely that a coalition of 3 parties will be necessary, except in the case that the Social Democrats and Christian Democrats work together. No coalition is certain as the Greens and Liberals have some views in direct contrast. Annalena Baerbock is not as concerned about being strict with the national debt as Christian Lindner, leader of the Liberal party would be.

During this election the Social Democrats gained momentum as the two other front runners, the Christian Democrats and Greens struggled with scandals. The loss is more significant for the Christian Democrats as the Social Democrats have made it known that they intend on forming a coalition with the Greens and Liberals instead of the Christian Democrats.

Despite the scandals surrounding the Green Party, it won 15 percent of the vote which is the highest percentage it has ever won in a national election. However, this is noticeably much lower than its goal of winning the election, which may have been possible had the election been when the party was polling the highest.

Berlin had a non-binding referendum which has received international attention. Berliners voted in favor of nationalizing apartments owned by a specific company.

Despite voting in favor of the referendum, it is unlikely to yield any results not only because it was a non-binding referendum but because the newly elected mayor of Berlin does not support nationalizing apartments.

Even if the mayor supported the referendum, it is unclear whether or not it is constitutional. Germany's constitution does include language that allows the country to nationalize. The problem for Berlin is this referendum was only for the city which seems to suggest the referendum was not to truly nationalize housing owned by private companies if only properties owned in Berlin would be impacted.

Support for the referendum is a result of soaring housing prices in Germany, including Berlin. There have been protests and calls to action for several years now as Germans spend over a third of their monthly wages on costs related to housing. In 2018 Germans spent 859€ a month on housing costs which was equal to $1,010.

Housing was cheaper in Berlin compared to other parts of Germany due to having a cap on rent. However, earlier this year the cap was eliminated by the Constitutional Court. This resulted in residents of Berlin seeing their rents dramatically increase overnight. The cost to rent is an issue in Germany as 50 percent of the national population rents. In Berlin, the cost of housing already increased by 85 percent between 2007-2019, which doesn't include the large increases tenants saw after the cap was eliminated this year.

Politicians in Germany tend to favor constructing new housing over nationalizing existing housing. New construction however is not currently fast enough to keep up with demand. Olaf Scholz, potentially the future Chancellor, currently favors a rent moratorium to try to address spiking rents.