But the odds for the CDU/CSU + FDP are drifting

So, a narrow re-election for Stoltenberg and the centre-left coalition in Norway, with its four (blonde) female party leaders and the Liberal leader resigning after the party was reduced to just two seats. Did anyone back Jens at the short odds-on prices?

Next up is Germany, which votes a week today. Merkel trades at 1.08 (1/12) in the “next Chancellor” market on Betfair which I think should be pretty much free money for those who like to bet at very short prices, and there’s also a vote percentage market available.

The main interest in Germany however is what the makeup of the next government will be, the country having spent the last four years ruled by the first Grand Coalition since the Kiesinger administration in the late 1960s. Despite comments that the Merkel-Steinmeier debate looked like “an old married couple”, Merkel’s preference is for a centre-right “black-yellow” coalition with the pro-business FDP, a call echoed by the Free Democrats themselves, although the Chancellor has been hedging her bets somewhat, also praising the work done by the grand coalition.

However, although still just favourite, the black-yellow coalition has been drifting steadily on the markets, and now trades at 1.88 or 10/11, while a return of the grand coalition is available at 2.78. I think you can forget the assortment of possibilities such as the “Jamaica” (CDU/CSU, FDP, Greens) or the “traffic light” (SPD, FDP, Greens), let alone the untouchables of Die Linke coming into the fold in a Red-Red-Green coalition – it will either be the FDP or the SPD that are the junior partner in a Merkel II government.

Number-crunching the most recent round of opinion polling shows the CDU/CSU at 35-37 with the FDP on 12-14, and putting the vote shares through seat calculators gives, in five cases out of six, a Bundestag majority for black-yellow and a return to the traditional centre-right governments of Adenauer or Kohl. However, the numbers are tight, with an average of just 306 seats compared to the 300 needed.

These seat calculations however don’t take into account the possibility of “overhang seats”, whereby a party might win more constituency seats in a state than it is entitled to under the party list vote. It gets to keep the overhang seats and the total number of seats in the Bundestag is adjusted upwards accordingly. An explanation is available here, and it has been speculated that the CDU could secure a large number of such seats in 2009, to make a black-yellow coalition just that bit easier.

To sum up then, at present it looks as though black-yellow will scrape home a week today, although the shape of the new government is still very much up for grabs. Merkel has come under criticism from CSU leader Seehofer for her campaign and for not making a strong enough case for a centre-right coalition. Will Merkel’s low-key approach be enough to avoid another grand coalition, in what some have described as Germany’s most boring campaign ever?

German Election Game now available: predict the overall result, plus results in individual states and the makeup of the new government. Email me at electiongame[at]yahoo[dot]co[dot]uk if you’d like to take part.

Double Carpet