The coalition government of Angela Merkel of the CDU, CSU and FDP in Berlin, known by the colours of these parties as “black-yellow”, has lost a significant amount of its support since the election victory of September 2009.

According to the Bundesbank, German GDP grew by 3.6% in 2010. This comes after the steep 4.7% drop in 2009, when the recession hit Germany hard. Unemployment has gone down from the 10.5% peak of 2005 to 7%. It now stands at just under three million. Volkswagen is taking on 3,000 workers, BMW and Daimler 400 each. Lufthansa has announced plans to take on an extra 4,000 staff this year. The same picture can be seen in chemicals, electronics and other industries. When the rest of Europe is facing lay-offs and sluggish growth, what is different about Germany?

Tens of thousands of left-wing activists and socialists from all over Germany came to Berlin last Sunday to commemorate the 92nd anniversary of the assassination of Rosa Luxemburg and Karl Liebknecht, the most famous representatives of German Marxism in the early 20th century and founders of the German Communist Party (KPD) in 1918.

The crisis of capitalism is creating an unstable social and political situation in Germany. Tensions are emerging within the coalition government, elected only last year. Most interestingly, this is having a radicalising effect inside DIE LINKE, which is being pulled both left and right, with some of the leaders attracted by coalition politics while the more radical ranks react against and seek an alternative to the left.

On February 13 German neo-Nazis tried to exploit the commemoration of the death of 25,000 civilians in Dresden during heavy Allied carpet bombing. However, the reaction of German workers, youth, trade unionists, left activists was swift and massive. Huge numbers turned out and with skilful use of modern communication techniques thwarted the attempt of the fascists to march through the town, in spite of the clear unwillingness of the police to do anything serious to stop them.

Sunday’s elections reveal an enormous shift within the German electorate. Of particular importance is the massive decline of the SPD vote, mirrored by a huge increase in support for DIE LINKE which stands to its left. The victory of the right-wing parties means the German capitalists are preparing for an offensive against the biggest and most powerful working class in Europe. Interesting times lie ahead.