In some of the most unsurprising recent election news, Germany’s ruling coalition parties got hammered in state elections in Thuringia and Saxony on Sunday. The biggest beneficiaries were two parties — Alternative for Germany and the Sahra Wagenknecht Alliance (BSW) — that oppose Project Ukraine and are therefore labeled along the lines of “Putin apologists” and “a threat to our democracy.”
Those warnings from a discredited establishment are increasingly falling on deaf ears. That’s because working class Germans have been seeing their living standards decline for the past two years while the government remains preoccupied with Ukraine and presides over the national humiliation that is the ongoing Nord Stream affair.
The ethnonationalist, anti-EU AfD, which has its share of Nazi admirers, took first place in Thuringia, with just under 33 percent. The pro-war, conservative flavor of neoliberalism Christian Democratic Union (CDU) came in second at 24 percent, while BSW — an essentially one-woman party that formed just eight months ago, came in third in both states — was third at 16 percent.
In Saxony, the CDU was first at 32 percent, AfD second with 30.6 percent, and BSW third with 11.8 percent. Die Linke, the former class-based party on the left that in recent years shifted more to pro-war identity politics, saw Wagenknecht abandon it last year, and the voters followed.
Compared to 2019, it lost 18 percent of the vote in Thuringia and six percent in Saxony.
The results are similar to the European elections in June — although on more fertile ground for the AfD and BSW — and polls showing record unpopularity for the ruling coalition of the Greens, Social Democratic Party of Germany, and Free Democratic Party What else is to be expected when the government seemingly does all it can to tank the economy while telling voters it does not care about their concerns (apologies, I use this video a lot but it’s so illuminating):
That has been the attitude of the government, and polls have consistently shown that voters want to give a raised middle finger to the coalition — increasingly voting for the parties the coalition fear and despise: AfD and the BSW.
And so they did — again. Similar results are expected in a third east German state, Brandenburg, on September 22.
I’m not going to write here about the dangers of the AfD. It’s a topic that is thoroughly — and with rampant blaming of voters — covered inaccurately across every German, European, and US mainstream news outlet. The AfD has been discussed at great length here at NC. See here, here, and here. As has the BSW (see here and here).
Instead of again separating fact and fiction in the endless warnings about the AfD and debunking claims that Wagenknecht is a “far-right Putin apologist” I’d like to use the election results as an opportunity to ask one question and then examine four potential paths forward for Germany. First, to the question:
Is the AfD More Dangerous than Germany’s — and the EU’s — Political “Center”?
I don’t include the BSW in this question because claims the party is something menacing are really too ridiculous to take seriously — despite serious people making serious arguments that Wagenknecht is a 21st century version of Benito Mussolini. What Wagenknecht is doing is attempting to rebuild a German left for the working class and destroy the current finance-centered political economy that is welded to the politics of recognition. It is essentially an attempt to return the left to what it once was, and in that mission she is being helped by the fake left neoliberals so discrediting themselves over the past few years.
The AfD, on the other hand, was originally more of an anti-EU party and refuge for neo-Nazis, which has been able to ride the wave of backlash against disastrous government policies for working people — from the war in Ukraine and a lost economic war to disastrous energy policies that hit poorer people the hardest and a large increase in immigration at the same time standards of living decline. The current government belatedly acknowledge this reality and has recently made a show of trimming Ukraine support and taking away the welcome mat from refugees, but it was too little too late as the AfD is now seen by some of its supporters as a party that will “save” Germany and return the country to fondly remembered days – whether 10 years ago or 85.
The good news is the AfD is a sovereignist party; the bad news is its idea of sovereignty favors ethno-nationalist, national oligarchy, climate change rejection, and despite increasing support of the working class, a lack of policy proposals that would benefit workers.
What of the “center” though?
While the media is up in arms about the AfD’s first state election victory, the German-NATO-EU permanent state made up of spooks, neoliberal bureaucrats, Atlaticist think tanks, and the military-industrial complex is leading a neoliberal return to serfdom, mass censorship, and an increasingly reactionary foreign policy that rehabilitates Nazis and supports proxy wars and genocide.
Maybe the “far right” being voted into power shouldn’t be the only outcome to worry about here. We’ve already seen an extinguishing of the left, and the center becoming authoritarian, and goal is now to crush the sovereignists. In my humble opinion, the larger fear is not just the center, but that it uses the ethno-nationalist right to deflect criticism of the neoliberal and Atlanticist pro-war policies that a have Europe where it is today. Under such an “arrangement” the latter abandons anti-EU and NATO stances in order to be welcomed into the halls of power but maintains the ethno-nationalism, militarization, anti-labor positions. Call it a strengthening of the European uniparty or the Ukrainization of Europe.
Under such a scenario, bargains between the “center” and far-right do nothing to rock the neoliberal economic boat nor the EU’s slavish Atlanticism, but with the center as the modern fascist leadership and the ethnonationalist right as its Schutzstaffel, immigrants will be scapegoated for economic problems caused by the financialization of everything, and attacks on anyone resisting neoliberal policies or war will increase.
We’ve already seen this happen to a small degree with Giorgia Meloni and the Brothers of Italy. We can also see the center rehabilitate Nazis. And we can see Ukraine’s thriving democracy.
With that being said, what lies in store for the German political landscape? Here are four possibilities.
1. Muddle Along
After getting walloped in European elections, polls routinely showing it’s the most unpopular post- WWII government and now another embarrassment in Sunday’s elections, one might think the government would step aside. There are no signs that is going to happen. Chancellor Olaf Scholz is sticking to the bit, telling Reuters the following about the elections:
“Our country cannot and must not get used to this. The AfD is damaging Germany. It is weakening the economy, dividing society and ruining our country’s reputation.”
The stated plan is that the AfD “firewall” — a pact by other German parties not to work with the AfD — will hold. In the meantime, the current government will continue down the same path of more censorship and crackdown on dissent.
A grand coalition excluding the AfD and BSW and led by the CDU and former Blackrock executive Friedrich Merz can then continue such policies following national elections towards the end of next year.
There are a few problems with this strategy, however. For one, many write-ups of Sunday’s state elections note that these East German states were fertile ground for the AfD and BSW. That’s fair, but it should also be noted that support for them is likely to continue growing as there is no end in sight to Germany’s economic woes. Here’s where the polls stand right now:
But the national elections are more than a year away. Meanwhile, the country’s manufacturing base continues to erode with the recession deepening in August, and the signs increasinging that it is permanent. Here’s Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, talking about all the bad news in the latest German PMI survey:
“The recession in Germany’s manufacturing sector is dragging on way longer than anyone expected (if you read NC, you know that’s not true).August saw an even steeper drop in incoming orders, killing off any hope for a quick bounce back. The HCOB PMI shows that the downturn has been going on since mid-2022, which is unusually long. Normally, over the last 30 years, the industry has managed to recover within a maximum of 20 months of a recession starting. But this time, things are different…
Order backlogs for German companies have been shrinking since the middle of 2022, as shown by the HCOB PMI data. While Eurostat data echoes this trend, it doesn’t quite capture the full picture. What often gets missed is that companies can be struggling despite having order books filled to the brim. This happens when the prices agreed upon for those orders no longer cover rising production costs. In the worst-case scenario, these companies may face bankruptcy, but until that point, the stock of orders data can misleadingly inflate the health of business conditions.”
This would be bad news anywhere, but especially in Germany where manufacturing still accounts for nearly a quarter of the German economy and employs 20 percent of the German workforce.
While German industry would likely be facing difficulties these days one way or the other due to its decades-long reliance on the wage suppression model, a lack of investment, and the rise of Chinese manufacturing, the loss of cheap and reliable Russian energy caused an abrupt shock. Here’s the German Chamber of Industry and Commerce last month noting its ongoing effects, which is probably a mix of truth and scapegoating for German industry missteps:
“The high energy prices also affect companies’ investment activities and thus their ability to innovate. More than a third of industrial companies say that they are currently able to invest less in core operational processes due to the high energy prices. A quarter say they can engage in climate protection with fewer resources, and a fifth of industrial companies have to postpone investments in research and innovation.”
Right on the heels of Sunday’s state elections, Volkswagen announced it is considering closing factories in Germany for the first time in its 87-year history due to falling profits and rising costs. The company has already shifted a significant amount of production to Mexico and is considering moving more out of Germany.
Elsewhere, the ZEW Economic Sentiment Index, which gauges the expectations of financial experts, fell off a cliff from 41.8 points in July to just 19.2 points in August. That’s the biggest drop since the beginning of the Covid pandemic.
German real wages have been ticking up in recent months, but have yet to recover from their record decline from the end of 2021 to mid-2023, which crashed them back to the level of 2015. This happened while German corporations were banking near-record profits. Germany has for decades followed a wage-suppression model and has no plans to deviate from it, but the rate of erosion coupled with inflation driven by the war against Russia, a housing crisis, and record immigration have upended society.
With the current government refusing to acknowledge voters’ concerns, people are understandably turning to alternatives, including the AfD. While the party might be enemy number one of the respectable center, let’s just say there are doubts as to whether it’s truly on the side of workers. The party did, after all, receive its seed money from a reclusive billionaire descendant of prominent Nazis and is led by a former Goldman Sachs investment banker.
2. Bring the AfD into the Fold
I’ve written in the past and still maintain that should the AfD come around on its opposition to Ukraine/Russia and the EU, all impediments to its holding power would melt away.
Those are the real problems the “center” has with the AfD.
If you have any doubts, let’s look at what the other German parties are now embracing even as they warn about the AfD.
They are brutally cracking down on any protests against Germany’s support for genocide in Gaza. They are expanding police powers to round up asylum seekers, including giving the state more powers to enter homes, making the suspicion enough to deport people, and criminalizing certain activities by aid workers who assist asylum seekers punishable with up to ten years in prison. They support neo Nazis in Ukraine and across the former USSR states in bids to hurt Russia. The Zietenwende is funneling more money to the military while slashing social programs and removing formerly cultural taboos on the celebration of the military. They want to tear up the part of the German constitution that forbids university research and science from being put at the service of private arms manufacturers. US long range weapons capable of reaching Moscow are coming to Germany until the country develops its own. They criticize striking workers as “far-right” and use their paid-off co-managers and company security forces to shut down most worker actions.
The AfD wants more militarism — albeit independent of the US — favors restrictions on the right to strike, wants welfare work requirements, and lower taxes for the rich.
3. Cross the Rubicon
The German establishment finds some pretext to ban the AfD. The smarter approach would be to bring the AfD into the fold, but a ban would theoretically cement the neoliberal, Atlanticist’s absolute control over Germany. It would also mean that whatever is left of democracy in Germany is dead and likely to lead to Weimar-esque levels of upheaval.
If you look around at the collapsing democracies across the West, a ban would fit right in with the jamboree of bridge burnings — from Macron’s “soft” coup and Starmer’s authoritarianism to the ongoing spook takeover in the US. And let’s not forget the West’s support for genocide, neo-Nazis, and its general belligerence towards most of the world.
Any ban of the AfD would almost certainly be just be the beginning. Next it would be Wagenknecht or anyone who opposes the neoliberal center. That’s likely why we’ve seen a year’s worth of articles describing Wagenknecht — despite all evidence to the contrary — as far right. These are so, for lack of a better word, stupid, but one benefit could be to lay the groundwork for a potential ban. Remember, Wagenknecht just formed her party eight months ago. She still has a ways to go, but her support might have the most room for growth.
4. Something Unexpected
I think we can safely say we’re in a volatile period and it’s hard to discount much of anything. What say you readers? What other potential futures lie in store for Germany?
