Germany's post-poll stalemate

The political stalemate gripping Germany — Europe's most populous and largest economy — more than a week after the ambiguous parliamentary election verdict, unhappily coincides with the worst crisis in the European Union's history that followed the French and Dutch rejection of the constitution. The current holder of the EU Council Presidency, the United Kingdom, whose economy is more robust than those of France and Germany, both crippled by economic slump and record levels of unemployment, is in theory better equipped to carry forward the European mantle, given its international stature and diplomatic clout. But with barely three months for the expiry of the current Presidency, negotiations on most outstanding issues on the agenda of the grouping of 25 member-states are quite a distance from a consensus. The new constitution and the prospects of political integration it envisaged for an enlarged Europe have effectively been consigned to cold storage for the conceivable future. The debate on the Union's budget for 2007-2013 has been held hostage to France's demand that Britain's three billion euros rebate from the EU coffers be frozen at current levels and to Britain's insistence that the disproportionately vast resources that subsidise Europe's agricultural sector (benefiting France) be redeployed to cater to the needs of less developed EU member-states in the east as also to the demands of global competition in the 21st century. There is little hope of a Germany-led initiative to resolve this deadlock after the recent electoral verdict, although such an outcome has possibly muted the aggressive conservative resistance to Turkey's full membership in the EU. But Germany's own response to the challenge of enlargement has been far from consistent. It has oscillated between a recognition of the strategic interest of integrating countries of the former Eastern bloc into the EU and dragging of its feet on key European policy initiatives such as the directive to liberalise the market in services in order to protect the so-called national interest.

The full impact of the Franco-German void on the European theatre will be felt once the U.K.'s term comes to a close in December, raising a question mark over the capacity of smaller member-states — under the rotational arrangement of the EU Council Presidency — to shoulder the institutional responsibilities of labyrinthine proportions. Meanwhile, a further waning of Germany's influence in the EU — evident in Chancellor Gerhard Schroeder's truncated second term in office — appears inevitable in the near future, given the unlikely prospect of a government being formed with a clear majority. Despite the political divide, there is a broad consensus on the need for socio-economic reforms in Germany. The distribution of the burdens of change across different social classes by the next government will ultimately determine the country's influence in Europe.

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