BERLIN—Germany’s Christian Democrats and Social Democrats have formed another “Grand Coalition.” The political center in Europe’s wealthiest and most populous state now swallows most of the ideological spectrum. However, the entire political spectrum has lurched to the left.

The Christian Democratic Union-Christian Social Union combination (sister parties which run as one) is a pale version of the Republican Party. The CDU-CSU long ago made peace with Germany’s generous welfare state.

Even less inclined to act is CDU Chancellor Angela Merkel. She pulled her party leftward in 2005 into a Grand Coalition with the Social Democratic Party, which went on to do essentially nothing.

She won a second term in 2005 but did little more to liberate German life. Her latest reelection campaign was based on keeping everything the way it was.

The CDU-CSU fell only five votes short of a majority. However, the poll was a disaster for the CDU-CSU’s coalition partner, the Free Democratic Party. Created in 1948 out of the ruins of the Third Reich, the FDP emphasized civil liberties, economic freedom, and entrepreneurship. In 2009, the Free Democrats enjoyed their best showing ever, 14.6 percent, and their support made Merkel Chancellor.

However, they proved to be less adept in governing. As the September election approached, the Free Democrats lacked any noticeable achievements.

A new political competitor, Alternative for Germany criticized the endless Euro bail-outs while backing the same market-oriented economic policies as the Free Democrats. Many FDP voters shifted allegiance. 

The FDP fell just short of the five percent threshold, receiving 4.76 percent of the vote. It went from 93 Bundstag seats to none. The Free Democrats still hold some seats in regional parliaments and the European Parliament, but have no obvious path back to national power. The AFD came in just behind the FDP, with 4.7 percent, and also won no seats. However, it is well-positioned to advance, putting the FDP’s survival at risk.

The Free Democrats’ collapse left the Bundestag with a narrow left-wing majority. However, both the SPD and Greens pledged not to join forces with Die Linke, or Left party, since it was the successor to the Communists who once ruled East Germany.

As I pointed out in my Forbes online column:

Although the CDU-CSU was much stronger in the Bundestag, the Social Democrats demanded specific concessions, such as a national minimum wage, which will reduce Germany’s employment advantage over its European neighbors, limitations on temporary employment, which will cut job opportunities, expanded pension benefits, which will add to the financial burden of an aging society, higher than necessary state pension contributions, which will be looted to fund political initiatives, and urban rent controls, which will discourage apartment construction and maintenance.

The Economist magazine warned of “Die Grosse Stagnation” likely to come. Europe’s largest economy faces slow labor productivity, falling investment, and minimal reforms since the start of the Euro crisis.

It is not just the government which has moved left. During the last Grand Coalition the FDP was the largest opposition party, leaving its leader the unofficial opposition leader. In this Bundestag the largest opposition party will be Die Linke. Just behind will be the Greens, traditionally known for their environmental commitment but of late pushing leftist economic nostrums as well.

Nor does the drift stop with the left-wing parties. The Free Democrats held a special party congress in Berlin and responded to the election debacle by making Christian Lindner of North Rhine-Westphalia the new party chairman. Lindner is seen as less committed to the party’s liberal principles.

Like Americans, the German people have worked hard to prosper despite an ever-expanding regulatory welfare state. But they will find it ever more difficult to succeed as their government moves further left. Then they will come to miss having a voice for economic and social liberty in the Bundestag.