Angela Merkel departs after preliminary coalition talks collapsed

Politics

Le Götterdämmerung de l’Allemagne

Nov 21, 2017 Hans-Werner Sinn

MUNICH – L'Allemagne traverse un moment politique décisif. Ce n'est pas seulement que la sortie des Démocrates Libres (FDP) de la coalition ait jeté le doute sur le fait que la Chancelière Angela Merkel de l'Union Chrétienne-Démocrate (CDU) reste ou non au pouvoir. Le FDP a quitté les négociations avec la CDU, ainsi que son parti frère bavarois l'Union Chrétienne Sociale (CSU) et les Verts, en marquant par ce geste la fin d'une volonté de forger une coalition gouvernementale stable qui a défini la politique allemande depuis les derniers jours la Chancellerie d'après-guerre de Konrad Adenauer.

Bien sûr, sans la participation du FDP, Merkel pourrait poursuivre un gouvernement de coalition avec les Sociaux-démocrates (SPD). Mais le SPD décimé dit qu'il est déterminé à rester dans l'opposition, afin de se remettre de sa défaite écrasante aux dernières élections. Toute autre coalition possible est hors de question, car ni l'extrême-gauche ni l'extrême-droite Alternative für Deutschland (AfD) ne sont considérées comme des partenaires acceptables.

Un gouvernement minoritaire sous Merkel reste cependant concevable. Étant donné que le Président Frank-Walter Steinmeier a exprimé son dégoût d'appeler à de nouvelles élections, un tel scénario pourrait devenir probable si Merkel ne démissionnait pas de son propre chef. Et même s'il y a de nouvelles élections, le résultat risque de ne pas être très différent, à moins que le dirigeant du SPD Martin Schulz, ne se retire.

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Hans-Werner Sinn

Writing for PS since 2002
111 Commentaries

Hans-Werner Sinn, Professor Emeritus of Economics at the University of Munich, is a former president of the Ifo Institute for Economic Research and serves on the German economy ministry’s Advisory Council. He is the author, most recently, of The Green Paradox: A Supply-Side Approach to Global Warming (The MIT Press, 2012).

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j. von Hettlingen Nov 30, 2017

Jeffrey D. Sachs urges the Social Democrats and Angela Merkel's parties to return to their grand coalition government, saying it is in the world's interest to have "a strong and forward-looking Germany in a dynamic European Union" that stands up to Trump and other unsavoury world leaders. This requires joining forces with France's president, Emmanuel Macron, to restart the Franco-German engine. Obviously "this is a critical time for Germany and Europe to provide vision, stability, and global leadership."
The author understands the Social Democrats' initial decision to "go into opposition after its poor election result in September," as it was a "sound" strategy. But such a move is "not timely," given the challenging times the West is facing. The US can no longer be reckoned with as a reliable leader under Trump; the EU is struggling with "multiple economic, social, political, and institutional crises;" China, however, is "dynamic and outward-looking" and could be a valuable partner for the EU "to assume vigorous leadership." Together they can work "on key initiatives (such as sustainable infrastructure across Eurasia)."
In this respect the Social Democrats and Merkel's parties need to reinvent themselves, offering "more institutional and financial innovation." The author says they have been too "parochial in outlook and temperament" to turn Europe into a "true counterpart to the US and China on global affairs." That said, many - not only the author himself - still believe "firmly in Europe’s commitment and pioneering statecraft when it comes to sustainable development." Euorpeans can be proud of their idea of achieving "economic growth that is socially inclusive and environmentally sustainable."
Much hope is placed on Europe to take the lead in the 2030 UN Agenda and its 17 Sustainable Development Goals, and the 2015 Paris climate agreement. But the EU needs to recover from its crises, starting with reform in the eurozone, as Macron had vowed to do during his campaign. Before the September election in Germany, Merkel was set to win big so that she would have the power to support Macron's plan.
The French president wants a EU finance minister, a budget for the eurozone to underwrite investment projects, tax harmonisation etc. It remains to be seen whether Merkel and her new government would endorse such a plan. It is doubtful whether a EU finance minister would "finally end Europe's self-inflicted agony" after the 2008 financial crisis. It is also unlikely to write off Greece's "unpayable" debts, because it would only rubber-stamp reckless spending.
The author proposes "a revival of investment-led green growth in Europe" that can rival China's "Belt and Road Initiative (B&R)." Launched by President Xi Jinping the B&R aims "to build green infrastructure linking Southeast Asia and Central Asia with Europe." Even if Europe shares "the same bold vision," it does not have the financial resources to match Xi's pet project, which will cost up to $1 trillion. The question is whether Europe has the appetite for Keysian economics - to borrow heavily in order to "create a partnership with China to renovate Eurasia’s infrastructure for a low-carbon future."
It sounds condescending to say, "if Europe plays its cards right, Europe’s (and China’s) scientific and technical excellence would flourish under such a vision. If not, we will all be driving Chinese electric vehicles charged by Chinese photovoltaic cells in the future, while Germany’s automotive industry will become a historical footnote." The author seems unwary of Westerners' reluctance to share their industrial secrets with China, fearing their knowledge would lose their value once disclosed.
With the number of issues that the author puts on Germany's plate, it remains to be seen whether it has time for "a new foreign policy for Europe, one that promotes peace and sustainable development, underpinned by new security arrangements that do not depend so heavily on the US."
If the Social Democrats want to have control over "economic and financial policy," they would increase public spending and "push for a truly green, inclusive, EU-wide, sustainable development agenda." It remains to be see how Merkel and SPD chief, Martin Schulz get along. But if they can put national interest ahead of partisan gains, it will set an example for other countries around the world to follow suit.
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Jonathan Engel Nov 26, 2017

What is important, it seems to me, is that Merkel is less able to take decisions "on the fly", where these are not consensus German positions, and in particular not to acquiesce to Mr. Macron's concept of Germany backing France's over indebtedness, and totally out of control public spending, which has led to the country having an insanely high tax take. Her decision making has not been good for Germans, and it seems to me that the greatest challenge over the next decade is to implement huge incentives to encourage German fertility, as otherwise Germany will simply become someone else's Lebensraum by the end of the present century.
- Henk Crop Dec 4, 2017
  
  Jonathan. Good point. Germany has a birthrate of 1,5 children per woman. The Arabs 3,4. (World Bank, fertility rates) Does not seem much of a difference ? Take Egypt as an example, with a birthrate of 3,3.
  One million Egyptians in 1947 would have grown to 5 million in 2017, forecasted is they will be with 8 million in 2050. That is 33 years from now.
  For a stable population a birthrate of 2,1 is required.
  Mrs. Merkel is planning to invite another, close to, a million immigrants ( 4 x 200.000 ).
  Germany many Turks and other immigrants.
  The combinations of these factors will guarantee that Germany will soon be transformed into a Middle Eastern State, including its culture.
  I do not want to discomfort all these Christian Gutmenschen of the CDU. But the Middle East is not a place where Christians feel at home. In the past century they all left the Middle East.
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- Steve Hurst Nov 26, 2017
  
  Is cloning the answer to your problem?
  - Jonathan Engel Nov 30, 2017
    
    That's a little bit "Brave New World".... unless German Ladies are prepared to carry to term the clones.... seems to me that the acceptance of a million or so male migrants would be consistent with an effort to generate more pregnancies, on the assumption that the migrants were more enthusiastic, and perhaps less mannered than the local males....
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Henk Crop Nov 24, 2017

For any organisation it is not healthy if a leader stays on the job for too long.
The same old faces around, no one dares to disagree, no new ideas.
After heaving lead Germany for 12 years mrs. Merkel should not have sought another term.
The current stalemate offers now an opportunity to withdraw from that idea.
- Barry Rosenfeld Nov 28, 2017
  
  Most leaders don't believe they have a "best before" date.
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Mauricio Duran-Loriga Nov 23, 2017

Better the Germans strike ANY deal and not call a new election.

We know what happens when the Germans are called to vote repeatedly in short periods of time.
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Mohammed Dore Nov 22, 2017

Professor Sinn has criticized Angela Merkel for admitting 2.5 million refugees from war torn areas. Of course from an economic perspective, this may be a "massive" burden. But it was a magnanimous humanitarian gesture, which an economist would not have been able to make. Thank god Merkel is a physicist! There are some values that require action even if the economic cost-benefit ratio is unfavourable. The people who hid Jewish refugees from the Nazi regime would NEVER have saved them if they had done a cost-benefit calculus. May I suggest that Prof Sinn consider Kant's categorical imperative?
- hanno achenbach Nov 23, 2017
  
  It was Merkel's personal decision, but it will cost German taxpayers, who were not asked, billions.
  
  That's what you call taxation without representation.
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j. von Hettlingen Nov 22, 2017

Hans-Werner Sinn believes Angela Merkel has a way out of the political morass, since the pro-business Free Democratic Party abruptly pulled out of the four-party talks on forming a coalition government. Such a failure is a challenge to Germany’s parliamentary democracy - a system that demands compromise from all parties in forming a coaition government. Although the talks have broken down, the German president, Frank-Walter Steinmeier has urged the Free Democrats and Social Democrats to reconsider.
Angela Merkel's options are limited. Her former grand coalition partner, the Social Democratic Party has refused to renew its alliance, due to "crushing" defeat at the polls. And reaching out to the other two parties - the far-left, die Linke, and the far right, AfD - is out of question. Steinmeier has no appetite to dissolve the Parliament and call for new elections, as the "outcome would not be much different, unless SPD leader Martin Schulz steps down." Instead he should propose Merkel to form a minority government, if she "does not resign on her own."
Merkel is not going anywhere, saying she will candidate again, if a snap election be called. The author says, her forming a minority government with just her party, the CDU and the Bavarian sistre party, the CSU without other parties may not be a bad idea, although she initially rejected the idea, preferring new elections. The CDU/CSU is the largest party, with just over 34 percent of the seats. In theory it needs a robust coalition to form a majority government.
Leading a minority government would weaken Merkel's leadership at home and in Brussels. Every time her government seeks to "enact legislation on an ad hoc basis," allies or partners in Bundestag will be needed. On the other hand, the Parliament would "become the site of genuine public debate once again." The author says, "for too long, coalition partners have negotiated government decisions behind closed doors, with the Bundestag either rubber-stamping or vetoing the results." Democracy comes to life again, when small parties at last have the chance to voice their concerns and issues.
No doubt EU leaders, especially Emmanuel Macron, are worried. Merkel has been the indispensable leader in Europe throughout the the eurozone crisis. Any weakening of her political position at home, or domestic preoccupation, is a serious blow to a bloc still struggling to salvage the European project. She would find it difficult to play an "active part in European politics," as there would be "lengthy debates with all of the Bundestag’s parliamentary groups on every major decision" before Germany could discuss the issue with all the other EU partners.
It is clear that Merkel will have to accept the reality that the phase-out of nuclear energy and the open-door policy for refugees "will now be impossible." The author says this is an excellent idea, "because too often politicians, driven by the momentum of their own thoughts, make decisions that have serious adverse consequences in the long term." Critics say she had been punished by many German voters for the influx of refugees - some 1.5 million migrants in just two years, putting "a massive burden on its welfare state."
It is true that "it is too early to tell how the political uncertainty now confronting Germany and Europe will be resolved." That the straws that broke the back of the German coalition talks were largely about domestic politics, including taxes and migration, show that party leaders put partisan politics ahead of their country's best interests. Their lack of acumen and statesmanlike qualities disqualify them for serious leadership. Indeed, Merkel is by far "the best alternative Germany has."
- Barry Rosenfeld Nov 28, 2017
  
  Indeed, Merkel is by far "the best alternative Germany has." One surmises that sour milk is better than no milk. How sad. Unfortunately, stability is a drag on progress.
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Steve Hurst Nov 21, 2017

What will happen in all likelihood in this piece of theatre with a minority government is decisionmaking will be stymied maintaining a status quo. EZ reform, if any, will be very moderate. Germany's currency advantage via the inherent lower euro compared with New DMk as previously detailed by H-W S continues. Only somebody interested in a government that is incapable of decision making would rejoice at the idea of any minority government coupled with an ineffective opposition. Inaction and halted decisionmaking if it occurs can create a vacuum however, and could well provide an opportunity for a party claiming that they will actually take action eg AfD. The idea a minority government can be numbed into balance by opposing parties and be pseudo stable is optimistic, it is open to a wildcard.

Some of the comments in the article appear worth questioning also. For example German Banks were also deeply enmeshed and exposed to GR, not just French Banks and there was also the very bizarre issue of German arms and submarine sales to GR which GR politicians said at the time was in their opinion tied to the bailout. With respect to dropping nuke power - this seemed a strange decision as it strategically it places reliance on Russian gas pipelines and the recent German windpower renewables were reported as an absolute mess with supply powerline infrastructure yet to be implemented and facing a public backlash against new powerlines. However the increased electricity costs appeared to be being placed on domestic consumers to shield industrial customers so it is difficult to see how German industry would be damaged unless it was fragile already. It has been reported that Merkel's decision to admit migrants was driven by fear of media photos of distressed migrants being turned away by armed Germans soldiers and a form of aversion to it being seen as a WW2 reenactment. I can only go by the reports but if that was the case the same decision may well have been taken anyway by others than Merkel.

As a common currency cannot survive without a transfer union and reform to implement such a transfer union will undoubtedly be blocked by a minority government what will continue is effectively a milking operation of the EZ to Germany's benefit which long term can only weaken the EZ. Whilst there is a strong case from short term self interest for that to occur I just cannot see how it can be regarded as a positive situation
- Jan Czaja Nov 21, 2017
  
  Steve,
  Herr Sinn's opinion is the reflection of his position on EU and, more specifically EZ. He realizes, and so do you, that minority government will mean no or little reform of both structures. Most likely, Herr Sinn, just like majority of Germans, is distrustful of Macron's plans hence the status quo suits him perfectly. Like you said, this will only be detrimental for EU in long run. Now the million dollar question, since further integration is probably a non starter given the above situation, do we finally pause, and take a step back and revert back to trade zone?
  - Steve Hurst Nov 21, 2017
    
    Jan, I can understand the apprehension Germany may have with others laden with debt (and other issues) and what appears to be the forming of a circle to guard the German treasure chest to stop casual lucky dips into it. I can only assume the objective is to hold onto the cash because it will be needed if the game fails.It is risk capital. The 'reform' to make the EZ function sustainably long term - if that is the word - is needed in Germany and elsewhere (particularly within the EZ), hardly any country would be unaffected and reform would be quite different depending on the country. I see it as next to impossible to gather all 27 EU members to deal with this simultaneously. Reverting to a trade union is the logical road forward but I cannot see it happening because such a step requires agreement of all 27 members and that also will not happen because somebody has to lose current advantage so will veto. It is a road in gridlock. If reform and debt management was undertaken in France - and other majors eg Italy which is a looming problem -
    in all likelihood then things might relax more. The problem is Macron has to deal with something like a 20% disadvantage with Germany in the Euro which cannot be sorted without French public (in particular public sector) backlash and ballot box backlash . If France quit the euro it would be chaotic and an overshoot downwards with the new currency would happen, probably quite a big one. Personally I was not in favour of Brexit but hoped for some EU reform under the exceptional circumstances criteria. However you can see the problems Brexit is going to cause and the UK has its own currency which has already helped. EZ members do not have their own currency. The UK has a fractured political scene at present and it just does not help. In times of trouble the tribe clusters around the tribal leader and seeks common local identity so external threat from outside the tribe is used as a political device by some. In this situation you can kiss goodbye to Federalism and say hello to increased fracture. Its not good. I found it very odd walking down the street the day after the Brexit referendum and knowing every other person I gave a nod to had voted against the UK's biggest export market
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hanno achenbach Nov 21, 2017

The decision to let in almost a million young men from safe countries was a personal decision of Frau Merkel, who could take it because she was chancellor. The Bundestag had no right of veto.

That means she can take the same decision again without parliament's approval
- hanno achenbach Nov 21, 2017
  
  ...she can even take the same decision again as a minority chancellor without parliament's approval.
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Ferran Brunet Nov 21, 2017

Splendid!
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https://prosyn.org/NpIQ53mfr

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