Germany’s election a harbinger for change throughout EU

A hit for Merkel at the polls would continue the travails of right-leaning governments throughout Europe, making the narrative of voters rejecting austerity look irresistible

Cameron will be watching Merkel's performance with interest
George Robinson
On 8 April 2013 08:19

Let’s put forward a hypothetical situation. Imagine that a national leader’s re-election prospects are threatened by attacks from a eurosceptic right flank and an ongoing crisis in the eurozone. With these coming together in a perfect storm, a recent loss in a local election couldn’t have been worse timed.

While this scenario may sound familiar to someone with even a passing interest in UK politics, it is currently far more applicable to German Chancellor Angela Merkel. With a national election in September, it looks a possibility that her eight year tenure as Chancellor may be reaching its conclusion.

Several months ago her Party, the Christian Democrat Union (CDU), along with its coalition partner, the liberal FDP, was unceremoniously booted out of office in Lower Saxony, to the benefit of a Social Democrat (SDP)-Green coalition. Due to the vagaries of the German electoral system, this defeat had national level implications, and the upper house of the national legislature is now under the control of a working majority of left-leaning parties.    

With a battle already on her hands, Merkel also has to deal with the rise of the eurosceptic ‘Alternative for Germany’ Party. Headed up by Bernd Lucke, an economics professor, the main goal of this new outfit is nothing less than "the dissolution of the euro in favour of national currencies or smaller currency unions”. While not as vociferously anti-EU as UKIP, it could well play the role of spoiler come election time.

This may all seem disconnected from our own domestic politics, but we should watch Germany’s next election with as much interest as we watch our own; the UK’s economic recovery may well hinge on it.

This is because Germany, with its position at the core of the eurozone, is in a uniquely powerful position. It alone can unilaterally steer European policy, and a change in leadership could have wide-reaching consequences, especially when you look at the alternative for Chancellor – the SDP’s Peer Steinbrück.

Steinbrück, while not familiar to many in the UK, is a little better known in France thanks to his close personal relationship with French President Francois Hollande. Indeed, Steinbrück visited Hollande in a show of support just last Friday. It is not hard to see why; on many policy issues, there is little to separate them. They are both trenchant critics of austerity, both want to see higher taxes on the wealthy, and, if anything, Steinbrück’s vision for a federal Europe exceeds even Hollande’s.

A Steinbrück victory would therefore mean a total reverse in German policy and see the Franco-German engine at the centre of the EU running on very different fuel. Given what Hollande’s policies have done to France, it is difficult to be anything other than pessimistic about what effect this might have: France is currently suffering from zero growth, steadily rising unemployment and an excessive deficit. To imagine this on a pan-European scale is terrifying.

Hollande has already been successful in seeking common cause against austerity with the Mediterranean countries, and for Germany to join this list might just see the eurozone problems become terminal.

There are, however, some glimmers of hope. Steinbrück’s popularity has recently taken a dive, and he is far less popular than his Party (much like our very own Ed Miliband). Polls have even found that if the German electorate had a straight choice between him and Merkel, he would only get a quarter of the vote.

On top of this, Hollande’s support for Steinbrück will likely serve as something of a poisoned chalice; the majority of the German people are no fan of the diminutive Frenchman.

All this suggests that Steinbrück will struggle to fully unseat Merkel. But another complicating factor for the Chancellor is that her FDP coalition partners, who are at the moment polling particularly poorly, could lose to such an extent that a CDU-FDP coalition is no longer possible. This would either mean that an SDP-Green coalition prevails, or that the CDU would have to go back into coalition with the SDP, as was the case from 2005-2009. Neither outcome would be particularly appealing.

As we get closer to the election date, there is also another, non-domestic aspect to bear in mind. For, if Merkel were to suffer a poor election campaign, the travails of right-leaning governments throughout Europe would continue apace, and the political narrative of voters rejecting austerity would start to look irresistible.

Given that the next major European election will take place in the UK, it is not unreasonable to assume that Downing Street will be following proceedings closely, if not even a little nervously. 

George Robinson is a parliamentary researcher for the Conservative Party

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