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Coalition negotiations after the German federal election: Who has the best bargaining power?

Negotiations expert and WHU Professor Dr. Lutz Kaufmann comments on the latest developments with Germany's election.

With no single party securing a majority of seats in Germany’s Bundestag, a coalition government is imminent. Intense negotiations, party promises, and bridging differences will lay the foundation down for the next few years.

“The situation is quite clear regarding the coalition negotiations after the German federal elections. There will be a so-called “traffic light coalition” (SPD/ Social Democrats, Grüne/The Greens, FDP/Free Democrats) – and I assume this will happen fast due to the internal party constellations and their general motivations: The Greens do not want to explain to their followers that they are (still) voting for Armin Laschet, or possibly even Markus Söder, from the Christian Democrats (CDU/CSU). When going into talks with the FDP, the Greens will for sure favor a coalition with the SPD. However, the FDP is, in general, more flexible and Christian Lindner will not call negotiations off again (like he did in 2017). Furthermore, the FDP does not back their (former) favorite coalition partner CDU as strongly as they used to do.

When looking at the CDU, one can see many and too large conflicts within the party, which holds their leadership back from having a clear mandate and the full support from the party for possible negotiations. In the meantime, the SPD can follow Olaf Scholz’ path during the election campaign, meaning to stay stable and remain calm, because the further the CDU drifts away from being a credible alternative for a coalition with FDP and Greens, the more the SPD wins bargaining power for a negotiation for a traffic light coalition with FDP and Greens. Paradoxically, Greens and FDP are, therefore, still interested in keeping the option for a coalition with CDU alive.

Recently, statements on the coalition negotiations referring to the prisoner’s dilemma based on the game theory were published. CDU and SPD were compared with the prisoners. In my opinion, this comparison does not hold, as game theory rests on the foundational assumption of rationally thinking and acting players. However, the game theory perspective does not consider any conflicts or dynamics within the parties. If the players can be seen as truly rational actors in the current coalition negotiations, the reader must decide.”

There seems to be only one strategic move that would allow the CDU to participate in the next government: Offering Robert Habeck from the Greens to become Chancellor. This implies that the original candidates Baerbock (Greens) and Laschet (CDU) will both not become the next Chancellor. The Green party is unlikely to reject a Green Chancellor, and party-veterans like Winfried Kretschmann with experience in a coalition with the CDU probably would support this. At the same time, the SPD and Olaf Scholz will certainly not pass on the chancellorship to the Greens.

About Lutz Kaufmann

Professor Dr. Lutz Kaufmann is a professor at WHU – Otto Beisheim School of Management. He has been researching and teaching at WHU for 20 years. He has already received numerous awards for his teaching and hitherto research at WHU. His doctoral students, numbering some 40 to date, have won around 20 national and worldwide prizes for their respective dissertations. Many managers, as well as sales and procurement professionals, know him by his highly sought-after Executive Education courses on Negotiations. Read more!