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Opinion » Comment

Updated: August 17, 2013 02:32 IST

The trouble with German solutions for Europe

Vaiju Naravane
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Chancellor Merkel’s enforcement of economic policies on eurozone states while seemingly distancing her country from a leadership role has come in for criticism

There is little doubt that Germany’s Angela Merkel will be re-elected Chancellor in parliamentary elections to be held on September 22. Ms Merkel is so confident of victory that she even took a holiday but has just returned to hold her first election rally. The German political scene, which had slid into the torpor of a hot summer amid listless campaigning by Ms Merkel’s left-wing rival, the Social Democrat SPD’s Peer Steinbruck, is slowly returning to life.

An increasing number of left-wing and moderate German voices are being raised against the lack of imagination, courage and dynamism shown by Ms Merkel and the narrow agenda of unrelieved austerity she has advocated and imposed on her European partners. Not least of her critics is Jurgen Habermas, know the world over for his work on socio-political theory, communication, rationalism aesthetics and language.

In a signed article in the German weekly Der Spiegel, Mr. Habermas describes Ms Merkel’s response to core European issues as “soporific bumbling.” He says the Chancellor has “subordinated each of her considered steps to the opportunism of staying in power.” “Europe is in a state of Emergency” and extraordinary situations demand “cognitive sensibility, imagination, courage and willingness to take charge.”

In his article, Mr. Habermas accuses the Merkel administration of “forcing its controversial crisis agenda” on France and the southern countries. At the same time, “Germany denies Europe-wide responsibility for the effects of its crisis policy — a responsibility it tacitly assumes by taking on this role as a leading European power. Just think of the horrendous youth unemployment in southern Europe as one of the consequences of an austerity policy that weighs most heavily on the weakest members of those societies…,” Mr. Habermas explains.

He warns that despite strenuous denials, Germany seeks a leadership role in the European Union (EU), assuming not just economic but even political preponderance that could prove to be dangerous in the long run. “After the founding of the German Empire in 1871, Germany assumed a calamitous and partly hegemonic position, which, in the words of deceased historian Ludwig Dehios was ‘too weak to dominate the Continent but too strong to bring itself into line.’ This too helped pave the way for the disasters of the 20th century. Thanks to post-war European unification, both a divided Germany and a united Germany were prevented from stumbling into the same old dilemma. It is clearly in Germany’s interest that this state of affairs remains the same,” Mr. Habermas writes.

Duplicitous game

Germany’s leading intellectual contends that Berlin continues to obstruct a banking union while deriving “disproportionately large” benefits from its economic preponderance within Europe. Berlin’s “duplicitous game”, Mr. Habermas says, triggers untold frustration among its EU partners.

Germany under Ms Merkel’s tough no-debt regime, conveniently takes advantage of the fiction of national sovereignty “because it saves the stronger partner from having to take into account the negative effects that some policies can have on weaker partners…. Pushing the problems onto the shoulders of the crisis-ridden countries with credit financing isn’t the answer. The imposition of austerity policies cannot correct the existing economic imbalances in the eurozone,” he argues.

Mr. Habermas urges his country’s politicians to ask the public genuine questions about a “democratic core Europe.” That is not being done, he says. Retaining the monetary union needs fresh institutional reform that is both necessary and unpopular. But if a reform is sensible and reasonable the electorate should be asked to accept it. And what better time than during a parliamentary election? “The citizenry,” Mr. Habermas says “has never been confronted with substantial European issues,” and politicians must take the lead in placing genuine issues for debate in the public arena. “They should no longer remain silent about the negative redistribution effects which the ‘donor countries’ must accept as the only constructive solution to the crisis.” This would concretely mean greater fiscal and political union and as a corollary, a weakening of national sovereignty.

But if Ms Merkel is sure of retaining her Chancellor’s chair, it is still uncertain who her coalition partners could be. Latest polls show her CDU-CSU union winning 42 per cent of the vote — a solid 16-point lead over Social Democrat rivals SPD.

However, the Liberals of the FDP who are her junior coalition partners are expected to fare very poorly. The formation of a new anti-euro party, the AFG or Alternative for Germany spearheaded mostly by Eurosceptic economists and bureaucrats may further eat into the FPD’s popularity.

If that happens, polls indicate they might not get the qualifying five per cent of the vote. The loss of the FPD would mean that Ms Merkel would have to look for other partners for a governing coalition.

The last poll conducted on August 1 showed the Conservatives with 42 per cent of the vote. The SPD comes a distant second with 26 per cent while the Greens are credited with 13 per cent. The extreme left Die Linke Party is likely to win seven per cent of the vote while the Liberals are hovering just below five per cent (from its score of 14.6 per cent in 2009). While the AFG is unlikely to win a single seat, it could steal precious voters from the FPD, robbing Ms. Merkel of her current coalition partner.

Coalition prospects

If the Liberals cannot enter the Bundestag or if the combined Conservative-Liberal score falls short of a majority, Ms Merkel could enter into a coalition with the SPD, a prospect that Mr. Steinbruck rejects, but only half-heartedly. She could also try to govern with the Greens, although that is less likely. The SPD is chary of the Conservatives, having lost chunks of its electorate following a disastrous “Grand Coalition” partnership with Ms Merkel from 2005 to 2009. Arithmetically, it is not impossible to imagine left-wing “red, orange, green” coalition between Die Linke, the Greens and the SPD. However, the Germans’ distaste for Die Linke’s Communist past effectively acts as a brake to what could be a logical tie up.

In view of a possible coalition with the SPD Ms Merkel has already begun making “soft” middle-of-the-road proposals such as the adoption of a minimum wage, a long-standing demand of the SPD. The good news about Europe’s economic recovery, albeit timid and hesitant, could also allow Ms Merkel to throw a few more carrots to the social democrats, in terms of greater flexibility towards her avowed policy of relentless austerity.

The electoral campaign has hinged around two subjects — the NSA spy scandal and revelations that the German secret services actively collaborated with the U.S. spy agency and a military procurement scandal over the Euro-Hawk. But since Ms Merkel has tried to make the NSA dirt stick to the SPD too, there is little stomach for probing those issues. Ms Merkel herself appears unassailable. However, the size and shape of her future coalition could well condition her policies over the next five years.

There is a 50-50 chance Merkel will not form the next government in Berlin. The federal election is not like in US - Germans are
voting for official political parties (list of candidates). 5% threshold means FDP might not get into Bundestag if it fails to pass the threshold.

SPD is weak and Greens are originally a single agenda political movement. They are finally learning about finance and EURO policy.
The Left (E German former-Communists) are going to hold the balance of close to 10% of voting share because of their base in E Germany. That makes SPD/Green choice of political coalition very dicey - should they get majority with The Left.

So, suggest like in India, the choice is not transparent and surprises are likely.

from:  dr.hari naidu
Posted on: Aug 18, 2013 at 02:46 IST

You cannot have an EU where some member states like Germany and other Northern European countries abide by EU fiscal rules and are fiscally conservative while Southern European members of the EU like Greece spend with abandon and expect the other EU members to ignore the fact that they broke EU fiscal rules and bail them out only to have them continue to spend with abandon. Even in the US, whose financial approach to a recession are the opposite of the EU/Germany's, you could not have a situation where some states over spent and went into debt while others were fiscally conservative.

I am not sure Germany's approach will get the EU out of the financial mess quicker than a more liberal US economic approach but it is certainly less risky for those Northern European countries wary of spending their taxpayer's money on loans which might never be paid back.

from:  Mark Gebert
Posted on: Aug 18, 2013 at 00:23 IST

The reelection of Ms Merkel is secure there is no competition. The question is what coalition will germany get. The grand coalition is very probable. Merkels austerity policies are the right approach for europe because either europe does structural reforms or it will suffer. The employment laws, the education systems and the economic regulations in southern europe need to be reformed. If the southern europe reforms, they deserver much more help. Without reforms any aid is a waste of money. The laws of economics always win in the long run so the options are change or misery. Southern europe still has to choose.

The situation in india is currently not so different. Bandaids are no longer enough either india reforms or ...

from:  Sven Maier
Posted on: Aug 17, 2013 at 15:15 IST

I agree with Vaiju Naravane there is no doubt that Angela Merkel will be re-elected
in parliamentary elections on September 22.
The financial meltdown has changed a lot in Europe and I would like to point out
to the austerity measures carried out the last years in Europe. Angela Merkel has
played an important role to implement this austerity policy. Meanwhile there is
growing concern that the restrictive approaches of budget consolidation currently
pursued in many European countries may not reach their objectives, but risk
further exacerbating the crisis. Austerity measures applied across Europe are
viewed increasingly critically by international experts and organisations as they can
undermine democratic and social rights, in particular for the most vulnerable
categories of the population.
I am of the opinion a strong signal should be sent out by calling for a profound
reorientation of austerity programmes, ending their quasi-exclusive focus on
expenditure cuts in social areas such as pensions, health services or family
benefits. Future national action should also include measures aimed at increasing
public revenues by taxing higher income categories and property wealth more
strongly, by shoring up the tax base and by enhancing tay collection, the efficiency
of the tax administration and the fight against tax fraud, tax evasion and tax
havens, corruption and the underground economy.
Current budget consolidation programmes should be further supplemented with
measures fostering sustainable economic growth, including the creation of new
quality employment and special support to be given to the young generation in the
transitional period between education and employment.
Such measures are important to strengthen democracy.
Under the current political circumstances there is no alternative to Angela Merkel
in Germany. Angela Merkel herself appears unassailable. However, the size and
shape of her future coalition could well condition her policies over the next five
years.
I hope The Hindu will give comprehensive coverage of the parliamentary elections
to be held on September 22 in Germany.

from:  kurt waschnig
Posted on: Aug 17, 2013 at 13:10 IST

I agree with Vaiju Naravane there is no doubt that Angela Merkel will be re-elected in parliamentary elections on September 22.
The financial meltdown has changed a lot in Europe and I would like to point out to the austerity measures carried out the last years in Europe. Angela Merkel has played an important role to implement this austerity policy. Meanwhile there is growing concern that the restrictive approaches of budget consolidation currently pursued in many European countries may not reach their objectives, but risk further exacerbating the crisis. Austerity measures applied across Europe are viewed increasingly critically by international experts and organisations as they can undermine democratic and social rights, in particular for the most vulnerable categories of the population.
I am of the opinion a strong signal should be sent out by calling for a profound reorientation of austerity programmes, ending their quasi-exclusive focus on expenditure cuts in social areas such as pensions, health services or family benefits. Future national action should also include measures aimed at increasing public revenues by taxing higher income categories and property wealth more strongly, by shoring up the tax base and by enhancing tay collection, the efficiency of the tax administration and the fight against tax fraud, tax evasion and tax havens, corruption and the underground economy.
Current budget consolidation programmes should be further supplemented with measures fostering sustainable economic growth, including the creation of new quality employment and special support to be given to the young generation in the transitional period between education and employment.
Such measures are important to strengthen democracy.
Under the current political circumstances there is no alternative to Angela Merkel in Germany. Angela Merkel herself appears unassailable. However, the size and shape of her future coalition could well condition her policies over the next five years.
I hope The Hindu will give comprehensive coverage of the parliamentary elections to be held on September 22 in Germany.

from:  kurt waschnig
Posted on: Aug 17, 2013 at 12:10 IST
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