Wednesday, September 28, 2005
The first thing which must be said is that Germany is a very admirable place. It is amazingly clean and well run and there is no binge drinking yob culture of the type which keeps people like me from visiting town and city centres on Friday and Saturday nights. Interestingly various media organisations have combined to lead a campaign in favour of talking the country up- spending 30 million euros in the process. Clearly there is a self confidence problem in germany as well as in France where the loss of the referendum and the Olympics have allegedly plunged the nation into introspective gloom.
But there is a problem of course. Econmically the biggest economy in the EU is stagnant with slow or no growth and high levels of unemployment. The SDP has tried to introduce necessary reforms but has encuntered much resistance from a popualtion which ahs got comfortable with a secure, supportive welfare state. The recent election produced a virtual dead heat result. Angela Merkel, the alleged Thatcher like new leader of the CDU, began the campaign 20 points in the lead and many assumed she would walk into the Chancellor's office. However, she came unstuck firstly by associating with Professor Paul Kirkhof, who advocated a flat tax- this did not appeal to the middle class German demographic which decides elections in Germany- and secondly by not performing well in the televised debate which Germany now offers to voters before elections. This means her predicted landslide turned out to be a mere one per cent of the vote, leaving the two big blocks almost equal-222 seats SPD and 225 CDU- with enhanced results for the smaller parties: the FDP(61), the New Left(54) and the Greens(54).Making a coalition work out of that lot is not going to be easy: i) Schroder hates Lafontaine, leader of the New Left, from the days when they were both candidates for the SDP's leadership. The charismatic survivor of an assassination attempt in the nineties- a woman knifed him from close up- has always borne an animus against the Chancellor(warmly reciprocated) and his setting up a new party further distanced him. Its far left message has endeared him to eastern Germans where unemployment is over 10%- but not recommended him to the rightwing CDU. So that block is hard to fit in. The other bits of the jigsaw are almost as difficult as Fisher, the Green leader is standing down and the FDP, seem unwilling to be steam rollered into any alliance.
ii) a coalition between the two big parties is also difficult as such a government would make it even more difficult to introduce the derugulation and employment law liberalisation which most economists agree should be put in place to help cure Germany's chronic unemployment and slow growth. Moreover, both leaders wish to be Chancellor and neither seems inclined o defer to the other. Schroder has been dealt a blow by losing so much ground but Merkel has lost so much credibilty for losing a contest which she should have walked. Her political incoimpetence has been revealed and the old master's reinforced.
iii) Merkel also has some problems with her partner the CSU. It is hard for British observers to realise that the CSU is a separate party, based in Bavaria where Stoiber, still has ambitions to lead the jointly allied party.
It seems no coalition is possible and a new election will be necessary after a few weeks have passed. When that happens I expec Schroder to win through and stay on as the top man.
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