The dramatic surge in support for Germany’s pro-business Free Democratic Party (FDP), which received “a record 14.6% of the vote” according to the Wall Street Journal in elections on Sunday, September 27, has given Angela Merkel a second term as German Chancellor via the center-right coalition that the FDP will form with Merkel’s Christian Democratic Union (CDU) party and its Bavarian sister party (the CSU). The center-left Social Democrats suffered their worst defeat in 60 years.
FDP supporters want to create the lasting prosperity that comes from empowering the individual and promoting dynamic entrepreneurial activity. They voted for the FDP platform, which aims advocates limited government, for example by reducing outlays for taxpayer-funded health care and by reforming Germany’s rigid labor laws. These principles—a persistent commitment to low tax rates, a stable currency, limited government, strong private property rights, openness to global trade and financial flows, and sensible regulation—are at the heart of the 2009 Index of Economic Freedom.
Although the election also demonstrated that a discouragingly large number of Germans voted for increasingly extremist parties on the left, the showing by the center-right coalition and the mandate given to the FDP to push for significant free-market reforms is encouraging. However, Chancellor Merkel will have to break her habit of splitting the difference with the left—a habit to which she became accustomed during her coalition government with the Social Democrats that came a cropper over the weekend. Merkel ran in 2005 on an economic reform platform. If she has the courage, Merkel now has the opportunity to cut taxes and reduce the regulatory burden on Germany’s private sector in the next few years.