Mid-Week Digest 09/29/2021

Coalition negotiations to follow German election and Indian farmers protest controversial agricultural reforms

 

Germany: Narrow win for Social Democratic Party in federal elections suggests protracted coalition talks ahead

 Germany’s center-left Social Democratic Party (SDP) claimed a narrow victory in federal elections on Sept. 26; the close result points to lengthy coalition-formation negotiations in the coming weeks, potentially slowing the nation’s post-pandemic economic recovery. The SDP’s Olaf Sholtz secured 25.7% of all the votes, followed by outgoing Chancellor Angela Merkel’s conservative Christian Democratic Union (CDU) with 24.1% – which represented the party’s worst election outcome since World War II. The Greens and the Free Democratic Party (FDP) trailed with 14.8% and 11.5% of the vote, respectively. The parties entering parliament must now enter negotiations to form a governing coalition before the body can vote and appoint a new chancellor.

A coalition of the SDP and CDU has ruled Germany since 2013, but this seems set to change following the recent vote, as both Sholtz and CDU candidate Armin Laschet are vying for the post of the chancellor. Sholtz has indicated his intention to join forces with the Greens and the FDP; however, the parties have vastly different policies and ideologies, indicating challenging and lengthy negotiations ahead. Both Sholtz and Laschet announced the discussions should be complete by December, but precedent suggests this may be an optimistic deadline. The outgoing government and Chancellor Merkel will remain in office for the duration of coalition negotiations. Though unlikely, another election could be organized if the parties fail to form a government. Protracted uncertainty surrounding future German leadership and policy priorities – combined with the end of Angela Merkel’s consistent 16-year chancellorship – increases the likelihood of financial instability in the country and threatens to slow post-pandemic recovery efforts. 


India: Farmers’ unions, political opposition groups mark one-year anniversary of agricultural reforms with nationwide strike and protests

Indian farmers have revived a nationwide campaign of anti-reform protests that began in late 2020, increasing the likelihood of intermittent transportation and supply chain disruptions ahead of state legislative elections in early 2022. On Sept. 27, thousands of participants blocked traffic on major roads and railways, marking the one-year anniversary of the passage of three controversial agricultural reforms which farmers fear will drastically lower prices. The most recent “Bharat Bandh” (pan-India strike) took place between 0600 and 1600 local time and called for a complete shutdown of government and economic activity. Organizers claim the strike was observed in more than 23 Indian states, though the impact was greatest in rural areas and northern India, which saw the closure of commercial establishments and public transportation networks. Protests in Punjab and Haryana—the two Indian states with the greatest agricultural output—blocked the passage of both passenger and mail trains.

In Punjab, local government offices and many businesses closed in a show of solidarity with the farmers, causing a near-total shutdown of local public services and commercial activity. Large groups of farmers also camped out on the outskirts of New Delhi; the large presence of protestors and police checkpoints resulted in major traffic disruptions Monday morning and cut off access to the capital from neighboring states. However, the strike had relatively little impact in urban New Delhi itself. Calls for protests in other urban areas of the country, such as Mumbai, had mixed results, with economic activity generally proceeding as normal. Despite the reported arrest of several hundred protesters, pro-farmer demonstrations have proceeded peacefully. Unless farmers’ unions are able to persuade the government to reverse its agricultural reforms, event organizers are highly likely to stage additional strikes and protests in the months ahead. Notably, the call for repeal has recently been taken up by opposition political parties, who have vocally criticized the ruling Bharatiya Janata Party (BJP) and Prime Minister Narendra Modi for pushing reforms without adequate protections for small-scale farmers. Such a platform is likely to be politically advantageous in several Indian states where elections are planned for February/March 2022, leading to increased visibility and greater popular mobilization surrounding the issue in those areas.