Germany Votes And Austerity Reigns, For Now – OpEd


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Angela Merkel’s reelection in Germany means austerity reigns for now, but there is at least a silver lining.

By Moritz Laurer

Europe’s most powerful nation has voted.

On September 22nd, the people of Germany granted Angela Merkel a huge victory, awarding her center-right party nearly 50 percent of the seats in the federal parliament, the Bundestag. Although Merkel’s victory was a foregone conclusion, no one expected it to be so resounding, with the chancellor coming within a hair’s breadth of becoming the first German leader since Konrad Adenauer in 1957 to win an outright majority.

Merkel’s former coalition partners, however—the business-friendly Free Democrats (FPD)—failed to get above the country’s 5-percent threshold for the first time in post-war history and will not be represented in the Bundestag. Meanwhile, the euro-skeptic, right-wing Alternative for Germany (AfD) party came out with 4.7 percent of the vote, only barely missing the threshold for representation.

Collectively, the three left-leaning parties—the Social Democrats (SPD), the Greens, and Die Linke (“The Left”)—actually exceeded the votes given to Merkel’s conservative union. But given the resistance of the other parties against forming a coalition with Die Linke, the successor of the socialist party that dominated eastern Germany until 1991, the only likely result of the election is a Merkel-led coalition.

It’s now up to the conservative union—Merkel’s Christian Democratic Union (CDU) and its Bavarian counterpart, the Christian Social Union (CSU)— to start the negotiations with the other parties. They could form a coalition with the Greens, but there might be too little programmatic overlap. Therefore the likeliest outcome is a “grand coalition” with the center-left Social Democrats, with whom Merkel worked quite harmoniously in a coalition from 2005 to 2009.

This means there will be no dramatic changes in Germany’s handling of the euro crisis. The conservatives will continue to push austerity measures and market-based liberal reforms like privatization, cuts in social spending, and deregulation in financially distressed southern European states—and therefore stifle their economies and increase unemployment.

There has been a slight rethinking among some conservatives lately to give the southern states a bit more room to breath, but it has not been anywhere near enough to tackle urgent problems like rising right-wing extremism in the southern countries due to unemployment and severe cuts in social spending.

Let there be no doubt, Merkel is a convinced European, and has worked hard to support the euro and keep the EU together. And it’s no surprise: Germany is the biggest beneficiary of the euro, putting its neighbors at a distinct disadvantage with its strong export industry, while Germany itself prospers as an “Island of Happy People” with very low unemployment and a stable economy.

But Merkel neglects the idea that Europe should not just be about economic strength, but about solidarity and social cohesion. Although Germany has invested considerable sums to stabilize the southern states, imposing austerity measures in return and then calling for the aggrieved countries to get back on their feet simply doesn’t work.

As Merkel made clear several times during the campaign: her primary concern is the money of the German people, and each state is primarily responsible for its own problems—even if German-imposed austerity measures are part of them.

Nevertheless, the recent elections give some modest cause for optimism. The left parties still have a majority in the Bundesrat, the upper house, which might not be as powerful as the U.S. Senate, but will still cause a need for cooperation.

Moreover, with the business-friendly Free Democrats voted out of parliament, Merkel’s conservatives will have to form a coalition with either the Greens or, more likely, the Social Democrats—the latter of which explicitly opposes “neoliberalism and market radicalism” in its official program. The SPD’s chancellor candidate has even called for a “Marshall Plan” for southern Europe.

Considering these convictions in the left camp, as well as a modest rethinking about austerity among some conservatives, it is hard to imagine that everything will stay as it is. “A government that includes the SPD or the Greens—both of which have egalitarianism and internationalism in their DNA—would almost certainly go further and embrace substantial reform, renewal, and strengthening of eurozone institutions as a medium-term target,” writes Kemal Derviş, vice president of the Brookings Institution. “Such a government would back a eurozone strategy, led by Germany and France, that focuses on growth and employment.”

Given the surprisingly strong conservative showing, and reasonable skepticism towards the SPD and the Greens after some broken promises from the SPD-Green government of 1998-2005, I am less optimistic.

But we can be sure that there will be movement in European politics after this election. Merkel’s critics have often charged her with dodging the big issues in favor of incremental steps. After the election, Europe’s reluctant hegemon will start working on a banking union to stabilize the European financial system, and perhaps even on structural reforms for more political integration to overcome the institutional shortcomings of the EU.

At least the left will have a seat at the table.

Moritz Laurer is a contributor to Foreign Policy In Focus.


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