A Grand Coalition for the Euro: The Second Merkel Cabinet, the Euro Crisis and the Elections of 2013

This article argues that the reaction of the second Merkel government to the sovereign debt crisis in the Eurozone was conditioned by informal and formal policy commitments that were put into place by the preceding CDU/CSU and SPD Grand Coalition after the financial crisis of 2007/08. The decisions were shaped by a cross-party consensus among Christian Democrats and Social Democrats about the causes for the good performance of the German economy in the past decade. Both parties also shared the determination to save the euro and to preserve the integrity of the Eurozone. As a result, an informal Grand Coalition emerged in 2011/12 which shaped Germany's policy reactions during the euro crisis down to the details. One important consequence of this development was that the euro bailout measures and the ensuing reforms of the institutional framework of the Eurozone did not become decisive issues during the Federal elections of 2013, despite their unpopularity among the voters.