The Next Big Player in the Global Economy Is Christian Lindner

For the first time, three chancellor candidates were invited to debate during the run-up to the German election. There were some tense moments, but for the most part it was a humdrum exercise for Armin Laschet of the conservative Christian Democratic Union (CDU), Olaf Scholz of the center-left Social Democratic Party (SPD) and Annalena Baerbock of the Greens.

But there was an elephant in the room during all three chancellorship debates. Christian Lindner, leader of the business-friendly Free Democratic Party (FDP), was not present but is poised to play kingmaker if current polls hold. His absence was palpable, as his demands—first and foremost heading up the powerful finance ministry—will almost certainly affect the next German chancellor’s ability to set a domestic agenda and future course for Europe. Although Lindner played only a minor role in the campaign, he may be about to play an enormous role in international politics.

Due to a fragmented political landscape, three parties will likely be required to form a majority government in Berlin after Election Day on Sept. 26. The two largest parties, the CDU and SPD, have essentially ruled out governing together, which means that one of them would look to form a pact with both the FDP and the Greens to form a parliamentary majority.

The Greens are believed to be eager to join a governing coalition that gives them a hand in setting climate policy. It’s far less clear, however, what exactly Lindner wants—aside from assuming Germany’s most domestically and internationally powerful cabinet post as finance minister. It is no accident that the current finance minister and chancellor candidate Olaf Scholz is also considered vice chancellor of Germany. The finance ministry has vast influence over the details of the national budget and the overall shape of government spending.

The finance minister’s portfolio also wields influence outside of Germany. The ministry steers important decisions within the Eurogroup, interfaces with institutions such as the World Bank and International Monetary Fund, and participates in the G-20 to help set the agenda of the global economy.

The 42-year-old Lindner has been propelled to this precipice of power by his own vast ambition—ambition that the FDP has also benefited from. In 2000, Lindner was the youngest person elected to the state legislature of North Rhine-Westphalia. It was a period when his party’s own traditional role in postwar German politics was starting to fade.

The FDP served as junior partner in German government 18 times between 1949 and 2013. An advocate for civil liberties and the free market, it became Germany’s de facto kingmaker, deciding which of the two main parties it would throw its support to and thus allow to appoint the chancellor. But when the Greens stepped into the role of junior coalition partner to the SPD in 1998, that left the FDP searching for a new role. The FDP was then only relied on once as a coalition partner during Merkel’s four terms—and that one experience ended disastrously. In 2013, the FDP failed to muster the 5 percent vote hurdle to be seated in parliament.

Taking the reins of his party after its historic loss, Lindner rebuilt the FDP. He recruited more women and got rid of most of the old guard, modernized the party’s image without sacrificing its traditional positions, and took the time to travel the country and meet with local media. Most importantly, he has refused to tie his party’s fortunes to the CDU. Lindner delivered a comeback of just over 10 percent of the vote four years ago. The FDP should surpass that mark this election cycle

Forming a coalition always requires compromise, but Lindner’s experience in coalition negotiations shows he will not be a pushover. Four years ago, Lindner balked after two months of marathon negotiations to create a coalition among the CDU, Greens, and FDP in a so-called Jamaica coalition (based on the way the parties’ respective colors match the Jamaican flag). Lindner pulled the emergency brake and bailed on the negotiations near the finish line, because he feared that Merkel and the Greens had a greater affinity for one another and were taking the FDP for granted. Fearing his party’s priorities would be overshadowed in government, he proclaimed that it was better not to govern than govern wrongly. His gamble seems to have paid off, given that he may now be courted by both major parties to enter government.

The FDP’s campaign platform this year has emphasized jump-starting the German economy, with plans to reduce taxes, trim bureaucracy, and reform pension programs with the aid of capital markets. The FDP would also position Germany as a partner for trade agreements with other democratic countries.

It would be easier for the business-friendly FDP to sync up with the conservatives, not least because Lindner forged close ties in recent years with Armin Laschet, the CDU candidate and premier of Germany’s most populous state, where Lindner was elected chair of the state party in 2012. But in this year’s national election, Laschet has been flailing on the campaign trail. The CDU is hovering just above 20 percent in the polls and could be destined for a period in the opposition after 16 years in power under Angela Merkel.

The FDP remains an attractive partner for current front-runner Scholz of the SPD. Lindner has not ruled out what’s termed a traffic-light coalition with the SPD, FDP, and Greens, and he is no doubt aware that the FDP acted as kingmaker to the SPD five times for a government in then-West Germany. The moderate Scholz, for his part, would rather bypass talks with the Left party, to the chagrin of some of his party peers who welcome taxing higher-income brackets and increasing social spending, because of its stance against Germany’s traditional foreign and security pillars of NATO and the U.S. security umbrella.

There is a considerable divide to bridge between the FDP and the SPD in tandem with the Greens in the bid for a traffic-light coalition. But the FDP will be loath to walk away from the prospect of power as it did four years ago. Lindner has made it clear that the FDP wants to govern from the center and not facilitate a leftward shift in Germany, and his best way of ensuring that’s the case would be by insisting he receive the coveted post of finance minister in Europe’s largest economy.

The FDP says it will hold firm to no tax hikes and no softening of Germany’s debt brake, which limits the federal government’s net borrowing to 0.35 percent of GDP. But the FDP is not averse to spending, and a finance minister Lindner would be keen pursue investment in infrastructure, education, and digitalization. On Europe, the FDP sees the need for more defense coordination but would not want to create permanent, undefined measures for mutual debt, therefore dashing ambitions for more European economic integration. The FDP’s fiscal discipline fits Scholz’s profile as the status quo candidate and would help him hold the line against the more radical actors within his party and the Greens.

One roadblock to Lindner’s path could be Robert Habeck, co-chair of the Greens. The popular author and former deputy state premier of Schleswig-Holstein might have given the CDU and SPD a run for their money as a telegenic chancellor candidate, had his party not felt, as he describes it, pressure to opt for a female candidate. Nevertheless, if Baerbock’s results at the polls disappoint, Habeck could emerge as the go-to person during coalition talks and lay claim to the finance ministry. The disparity in economic visions with Lindner could hardly be starker: Habeck likes to emphasize his openness to relaxing the debt brake to invest more in restructuring the German economy, the better to meet the challenges of climate and technological change.

Like a true kingmaker, Lindner’s FDP has left avenues open for discussion with SPD and the CDU should a third party be needed to crown a chancellor. Ultimately it could be that the harder hurdle to overcome for the FDP will be the Greens. Lindner’s mantra about being the party of innovation rather than supporting bans on carbon-intensive behavior is a swipe at the Greens, who have lost support over the summer. But this will be the last shot for Lindner to govern, and he will not be looked upon kindly if party is again placed before country.