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Sunday, September 22, 2013

Angela Merkel's election win is reward for weathering the euro crisis at home

Germans have given the chancellor a third term because living standards have remained stable while mayhem has struck parts of the eurozone

Angela Merkel's triumph in winning a third term with such an improbably high margin sets her and Germany apart in Europe.

More than three years into the European Union's worst ever nightmare, Merkel, uniquely in the eurozone, has been rewarded for her handling of the currency and sovereign debt crisis. Everywhere else voters have punished governments.

Her victory demonstrates the gulf between Germany and the rest of the EU and the eurozone, although it is not clear what impact her third term will have on the direction of the crisis.

Merkel's second term coincided exactly with the euro crisis. As she was forming her coalition with the Free Democrats in October 2009, Greece went belly-up, prompting deep doubts about the common currency and the survival of the EU

She has been resented and criticized across Europe for her crisis management and responses. Berlin became alarmed at the resurrection of the "ugly German" stereotype in neighbouring countries. But German voters have voiced their approval.

As Bill Clinton famously remarked, "it's the economy stupid". And Germans have given Merkel a third term because, despite big problems forecast for the future, German living standards, jobs and prosperity have remained stable while mayhem has struck across large parts of the eurozone.

A detailed opinion poll by Pew in May found striking contrasts in Europe on how the Germans saw themselves and how the public in other countries saw them. It concluded that Germans were living "on a different continent" from the rest of the EU.

That finding appears confirmed by the election and is likely to generate further political and psychological problems in Europe's efforts to emerge from such a deep crisis.

Since the Greek emergency snowballed in 2010, 12 governments have fallen in a eurozone of 17 countries, whether of the right or the left. Merkel is the only leader to buck this trend.

The political upheaval shook not only the bailed out or ailing countries, such as Greece, Ireland, or Spain, but also hit the creditor countries doing OK through the turmoil, such as Finland, Slovakia or the Netherlands. Germany is the exception in this pattern.

The popular backlash has taken the form of an anti-incumbency insurgency, with voters largely following a kick-the-bums-out script. Except in Germany.

And from Greece to Italy to the Netherlands, the testing political times have also seen the rise of anti-European mavericks and populists on the hard left and on the extreme right seeking to usurp mainstream political elites. Again, Germany remains the most notable exception to this pattern.

Merkel has been the dominant figure in drafting Europe's response to the crisis, the architect of austerity, a word that she privately professes to despise. Her approach has been incremental, cautious, always only acting at the last minute. She has been accused of dithering, lacking resolve and boldness.

But her winning a third term, with an increased share of the vote for her Christian Democrats than in 2009 no less, will vindicate her confidence in the way she has dealt with the challenge. She will be encouraged to carry on as heretofore, not least since she is confident that the heat is going out of the crisis and that her emphasis on savings, cuts, and structural reforms in the stricken eurozone economies is beginning to pay off.

This suggests there will be little quick change in her policies on Europe, unless there are major developments in a big ailing country such as Italy or France.

She is under no pressure at home to change in any case. The main opposition Social Democrats and Greens might bicker and attack her policies, but where and when it matters, in the chamber of the Bundestag in Berlin, they have always voted with her on the key decisions.

The opposition to Merkel on the euro has come from within her own ranks, defecting backbenchers, her junior coalition partner, the FDP, and from her Bavarian sister party, the Christian Social Union.

Depending on the complexion of the new coalition, that domestic opposition may grow. That hinges on whether the country's first euro-sceptic party, the Alliance for Germany, makes it over the 5% hurdle into parliament and whether the FDP manages likewise. Early projections showed both tanatalisingly close but below the threshold.

An FDP out of parliament may opt to sharpen its euro-scepticism as a tool of recovery. An AfD that gets in or narrowly misses might seek to use next year's European parliament elections to increase its support.

And if a grand coalition of strengthened Christian Democrats and weakened social democrats emerges, the German parliament will become a rubber stamp, perhaps helping protest movements to make a lot of noise on the political fringes.

But Merkel's victory runs counter to most of the political trends across Europe in the past three years, making her Europe's unassailable leader, however uneasy she might be in that role.

Angela MerkelGermanyEurozone crisisEuropean UnionEuropean monetary unionEconomicsEuroIan Traynortheguardian.com © 2013 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds


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