It’s the clearest sign yet that after flirting with Martin Schulz earlier this year, German voters are coming back to Angela Merkel and the center-right Christlich Demokratische Union (CDU, Christian Democratic Union).
North Rhine-Westphalia is Germany’s most populous state, and it’s one of the industrial and technological heartlands of Europe. It’s a relatively left-leaning state — since 1966, the only CDU leader to run the state’s government was Jürgen Rüttgers, from 2005 to 2010. Moreover, it’s the state where Schulz, the SPD’s chancellor candidate for this September’s federal elections, grew up. It’s home to 17.8 million of Germany’s 82 million-plus population. So four months before the national election, NRW has as more predictive power than you might typically expect for a state election, considering that its electorate equals just over one-fifth of the electorate that will decide the national government in September.
It’s too soon to guarantee that Merkel will win a fourth consecutive term, even with the decisive victory last weekend — the third and most important CDU win in three state elections this year. But the result is a clear sign that Schulz’s center-left Sozialdemokratische Partei Deutschlands (SPD, Social Democratic Party) is struggling to connect with working-class voters who are turning increasingly to alternatives from the anti-immigrant right to the protectionist left to the reassuring stability of the Merkel-era CDU. Indeed, the CDU campaigned throughout the spring on the notion that Merkel and her allies amounted to a ‘safe pair of hands.’ Continue reading Kraft steps down as NRW result gives boost to Merkel’s fourth-term hopes→
No sooner than Martin Schulz seemed to have captured political lightning in a bottle, his party fizzled in the first state-level test in the leadup to Germany’s autumn federal election.
In the southern state of Saarland last weekend, chancellor Angela Merkel’s center-right Christlich Demokratische Union (CDU, Christian Democratic Union) not only won the election, but improved its support since the last election in 2012, giving the state’s conservative minister-president, Annegret Kramp-Karrenbauer, who has served in that role since 2011, a second term.
Headlines blared that the narrow defeat somehow marked a defining moment for Schulz, the newly crowned leader of the center-left Sozialdemokratische Partei Deutschlands (SPD, Social Democratic Party), which has pulled into a virtual tie with the CDU in opinion polls for the national vote in September.
It’s one of the smallest of Germany’s sixteen states, both in area and in population (996,000). Nevertheless, Saarland’s size isn’t the only reason its election results will have little impact on a federal election still six months away and even less predictive value. It’s true that the state election, the first of three such state-level votes this spring, showed that the CDU’s political power isn’t evaporating overnight. But Merkel and Kramp-Karrenbauer, whose Christian Democrats led every opinion poll in the weeks and months preceding the vote, should have expected to win Saarland’s election.
Though the renegade Social Democrat Oskar Lafontaine — one of the founders of what is today the democratic socialist Die Linke ran the state government from 1985 until 1998, when he briefly became Germany’s finance minister,Saarland before 1985 — and since 1999 — has always been friendly territory for the Christian Democrats.
Far more consequential will be the state elections in North Rhine-Westphalia, the most populous state in Germany (with around 17.8 million people) and one of its most wealthy, on May 14 — and in Schleswig-Holstein a week earlier.
In NRW, Hannelore Kraft, a pro-growth Social Democrat who has often been mentioned as a future chancellor, is hoping to win reelection to a third term (she assumed the office of minister-president in 2010). Though the state is historically competitive, Kraft is a popular official, and the SPD has recently taken a meaningful lead since Schulz — who grew up in Eschweiler, a city on the state’s western edge near both The Netherlands and Belgium — became the party’s chancellor candidate. If the Social Democrats fail to hold NRW, it will be a far more depressing harbinger, for many reasons (a fifth of the German electorate, a longtime bellwether, popular SPD incumbent, Schulz’s home state), than the Saarland result.
If there’s one thing that unites Europeans, it’s the concept that they are better — more enlightened, more cultured and more sophisticated — than Americans.
That was especially true during the presidency of George W. Bush, when France, Germany and other leading anchors of the European Union vociferously opposed the US-led invasion of Iraq. In 2002, it sometimes seemed like German chancellor Gerhard Schröder was running against Bush, not against his conservative German challenger, Bavarian premier Edmund Stoiber.
Europeans might be leaning in a similar direction in the Trump era, even though it’s hardly been a month since Donald Trump took office. In the days after Trump’s surprise election last November (and after the Brexit vote last summer), populists like Geert Wilders in The Netherlands and Marine Le Pen in France had reason to believe that Trump’s victory would give political tailwinds to their own electoral efforts in 2017.
If anything, however, Europeans are pulling back from populism in the first months of 2017. As four of the founding EU countries gear up for elections in the coming months — the first will be The Netherlands in just nine days — the threat of a Trump-style populist surging to power seems increasingly farfetched.
Maybe Europeans simply outright disdain what they perceive as the vulgar, Jacksonian urges of American voters. Maybe it’s shock at the way Trump’s inexperienced administration has bumbled through its first 40 days or the troubles of British prime minister Theresa May in navigating her country through the thicket of Brexit and withdrawing from the European Union.
More likely though, it could be that Trump’s oft-stated criticism of NATO and praise for Russian president Vladimir Putin have finally shaken Europeans out of the fog that’s gathered for 70 years under the penumbra of pax Americana. Even as officials like US vice president Mike Pence and US defense secretary James Mattis reassure European allies that the United States is committed to the trans-Atlantic security alliance, Trump continues to muse about NATO being obsolete (as recently as the week before his inauguration). Furthermore, the America-first nationalism that emerged from Trump’s successful campaign has continued into his administration and promises a new, more skeptical approach to prior American obligations not only in Europe, but worldwide. Just ten days into office, Trump trashed the European Union as a ‘threat’ to the United States, only to back down and call it ‘wonderful’ in February. Breitbart, the outlet that senior Trump strategist Stephen Bannon headed until last summer, ran a headline in January proclaiming that Trump would make the European Union ‘history.’
All of which has left Europeans also rethinking their security position and considering a day when American security guarantees are withdrawn — or simply too unreliable to be trusted.
Arguably, NATO always undermined the European Union, in structural terms, because NATO has been the far more important body for guaranteeing trans-Atlantic security. Though Federica Mogherini is a talented and saavy diplomat, the EU high representative for foreign affairs and security policy is far less important to trans-Atlantic security than the NATO secretary-general (currently, former Norwegian prime minster Jens Stoltenberg). While the stakes of EU policymaking — trade, consumer and environmental regulation, competition law and other economic regulation and a good deal of European fiscal and monetary policy — aren’t low, they would be higher still if the European Union, instead of NATO, were truly responsible for European defense and security. That’s perhaps one reason why the European Union has been stuck since the early 2000s in its own ‘Articles of Confederation’ moment — too far united to pull the entire scheme apart, not yet united enough to pull closer together.
Perhaps, alternatively, it has nothing to do with blowback to Trump or Brexit, and voters in the core western European countries, which are accustomed to a less Schumpeterian form of capitalism, are simply more immune to radical swings than their counterparts subject to the janglier peaks and valleys of Anglo-Saxon capitalism. It’s not too much to think that, possibly, in the aftermath of both Brexit and Trump’s election, core Europe, unleashed from the toxic dynamic of British euroscepticism and emboldened to forge new relationships from outside the American security aegis, may be finding a new confidence after years of economic ennui.
Nevertheless, populists across Europe who tried to cloak themselves in the warm embrace of Trumpismo throughout 2016 are increasingly struggling in 2017. A dark and uncertain 2016 is giving way rapidly to a European spring in 2017 where centrists, progressives and conservatives alike are finding ways to push back against populist and xenophobic threats. Continue reading Trump effect: Europe turning toward integration, away from populists→
With national security advisor Michael Flynn’s resignation and new reporting from The New York Times that Trump campaign officials had repeated contacts with senior Russian intelligence officials, it is time to ask the fundamental question about this administration’s underlying weakness over Russia:
Was there a quid pro quo between the Kremlin and the Trump campaign to help Trump win?
No one wants to believe this, of course, and it is an important moment to give Trump as many benefits of the doubt as possible. It is probably true that Trump would have defeated Hillary Clinton without any Russian cyber-shenanigans (though of course Richard Nixon would have easily defeated George McGovern in 1972 without ordering a break-in at the Watergate Hotel). It is also true that the leaks coming from the intelligence community could represent a serious threat to civil liberties, though it is not clear to me whether this information is coming directly from the intelligence community or secondhand from any number of potential investigations. There are many ‘known unknowns’ here, and there are potentially even more ‘unknown unknowns.’
For the past two elections, Germany’s center-left has tried to stymie chancellor Angela Merkel with two jowly, doughy figures compromised by high service in Merkel-led ‘grand coalition’ governments.
And for the past two elections, Germany’s center-left Sozialdemokratische Partei Deutschlands (SPD, Social Democratic Party) has won a smaller share of the vote than at any other time in postwar German history.
For months, it appeared that the Social Democrats were set to sleepwalk into making the same error in 2017.
With the federal election formally set for September 24, it seemed that the SPD would choose as its candidate for chancellor Sigmar Gabriel, the economy minister who serves as vice chancellor in the current Große Koalition and who has served as the party’s official leader since 2009.
Though polls showed Merkel’s center-right Christlich Demokratische Union (CDU, Christian Democratic Union), in power since 2005, losing some ground to the eurosceptic and anti-immigrant Alternative für Deutschland (AfD, Alternative for Germany), they still maintained a consistent lead of anywhere from 11% to 17% against the Social Democrats. With Gabriel at the helm, the SPD seemed content to lose another election to Merkel, perhaps willing to suffer as the junior partner in her fourth-term governing coalition or otherwise in complete opposition.
The theme of this week’s convention could have already been ‘I Took a Pill in Cleveland,’ because it’s clearly more Mike Posner than Richard Posner.
All eyes last night were on Ted Cruz, the Texas senator who lost the Republican nomination to Donald Trump and, notably, Cruz’s pointed refusal to endorse his rival in a rousing address that is one of the most memorable convention speeches in recent memory. Trump’s allies instructed delegates to boo Cruz off the stage, and they spent the rest of the night trashing Cruz for failing to uphold a ‘pledge’ to support the eventual nominee.
But shortly after Cruz’s speech, David Sanger and Maggie Haberman of The New York Times published a new interview with Trump about foreign policy, in which he indicated that he would be willing as president to break a far more serious pledge — the mutual collective defense clause of Article Five of the North Atlantic Treaty that essentially undergirds the North Atlantic Treaty Organization (NATO), the organization that has been responsible for collective trans-Atlantic security since 1949:
Asked about Russia’s threatening activities, which have unnerved the small Baltic States that are among the more recent entrants into NATO, Mr. Trump said that if Russia attacked them, he would decide whether to come to their aid only after reviewing if those nations “have fulfilled their obligations to us.”
“If they fulfill their obligations to us,” he added, “the answer is yes.”
Mr. Trump’s statement appeared to be the first time that a major candidate for president had suggested conditioning the United States’ defense of its major allies. It was consistent, however, with his previous threat to withdraw American forces from Europe and Asia if those allies fail to pay more for American protection.
The comments caused, with good reason, a foreign policy freakout on both sides of the Atlantic. The Atlantic‘s Jeffrey Goldberg wrote, ‘It’s Official: Hillary Clinton is Running Against Vladimir Putin.’ In The Financial Times, a plethora of European officials sounded off a ‘wave of alarm.’
In successive waves, NATO’s core members expanded from the United States and western Europe to Turkey in 1952, to (what was then) West Germany in 1955, Spain in 1982, the new eastern and central European Union states in 1999 and 2004 (which include three former Soviet republics, the Baltic states of Latvia, Lithuania and Estonia), and Albania and Croatia in 2009. Of course, many of the more recent NATO member states spent the Cold War behind the Iron Curtain subject to Soviet dominance.
Above all, so much of eastern Europe joined NATO to protect themselves from Russian aggression in the future. Article Five provides that an attack on one NATO country is an attack on all NATO countries, entitling the NATO country under attack to invoke the support of all the other NATO members. This has happened exactly once in NATO’s decades-long history, when the United States invaded Afghanistan in the aftermath of the 2001 terrorist attacks.
It’s not the first time Trump has slammed NATO during the campaign; he called it ‘obsolete’ in off-the-cuff remarks at a town hall meeting in March:
“Nato has to be changed or we have to do something. It has to be rejiggered or changed for the better,” he said in response to a question from an audience member. He said the alternative to an overhaul would be to start an entirely new organisation, though he offered no details on what that would be.
He also reiterated his concern that the US takes too much of the burden within NATO and on the world stage. “The United States cannot afford to be the policeman of the world, folks. We have to rebuild this country and we have to stop this stuff…we are always the first out,” he offered.
The latest attack on NATO and, implicitly, the international order since the end of World War II, came just days after NATO’s secretary-general, former Norwegian prime minister Jens Stoltenberg, announced a new plan for NATO cooperation on the international efforts to push back ISIS in eastern Syria and western Iraq. Stoltenberg, it’s worth noting, is the first NATO secretary-general to come from a country that shares a land border with mainland Russia. So he, more than anyone, understands the stakes involved. Continue reading NATO comments show why Trump could inadvertently start a global war→
Stripped of distractions, it comes down to an elemental choice: whether to restore the full self-government of this nation, or to continue living under a higher supranational regime, ruled by a European Council that we do not elect in any meaningful sense, and that the British people can never remove, even when it persists in error.
For some proponents of the ‘Leave’ campaign, sovereignty matters so much that the warnings of a significant short-term disruption to the British economy simply do not matter. In the long run, Brexit’s benefits will come, supporters hope, from the ability of future British policymakers to enact laws and regulations unhindered by the grinding bureaucracy of Brussels and Strasbourg.
That Brexit will lead to such full-throated British sovereignty is not so clear — at least if the United Kingdom wants to leave the European Union while still retaining access to the single market, one of the world’s most integrated free-trade zones.
Britain, contemplating divorce, already has a ‘separation’ with Europe
It’s not always easy to sort the alphabet soup within the European Union, let alone the rest of Europe that lies outside the technical European Union. But arguably the United Kingdom today enjoys much more freedom than any of the other 27 member-states of the European Union. As British voters consider divorce from Europe, they would do well to consideration that their country is already in something of a separation with Europe.
Today, the United Kingdom is neither a member of the euro currency zone and monetary union, nor (like Ireland) the Schengen zone of free movement. The former means that the United Kingdom still has its own currency, the pound sterling, and the Bank of England controls British monetary policy. The latter means that the United Kingdom retains more control over its borders than even non-EU states like Switzerland and Norway (both party to the Schengen Agreement). Continue reading Why British sovereignty would be even weaker after leaving the European Union→
It’s tempting to argue that results from three state elections in Germany on Sunday spell the beginning of the end for chancellor Angela Merkel.
In all three states, the eurosceptic, anti-immigrant Alternative für Deutschland (AfD, Alternative for Germany) won representation for the first time at the state level. That means that the AfD’s parliamentary presence will rise to eight German state assemblies, with the party poised to enter the Bundestag in the next federal election (after narrowly missing the 5% electoral threshold in September 2013).
It’s not the first time that radical parties have made minor gains in elections. In the 1992 Baden-Württemberg state elections, the hard-right Die Republikaner (Republicans) won over 12% of the vote, making it the state’s third-largest party. Hard-right parties have routinely won a small share of the national vote, though never enough to enter the Bundestag. Former East German communists founded what is today the radical leftist flank of Die Linke (The Left) and, despite a quarter-century from the fall of the Berlin Wall, the party (certainly not as hard-left as it was in 1989) is still controversial.
It’s true that Merkel has taken a bold stand in welcoming refugees from Syria and elsewhere in the Middle East and North Africa, and that policy has left many German voters concerned that the rate of immigrants — over one million since the migration crisis swelled last summer — is more than Germany society can assimilate culturally, socially and economically.
It’s not an unfair concern, so it’s not surprising that the AfD’s popularity is rising. Since its creation in 2013 as a party of mildly eurosceptic academics, it has turned sharply right under a new more hardline leader, Frauke Petry, a 40-year-old chemist and businesswoman whose anti-migration rhetoric has attracted voters scared of the effects of so many new German refugees. The AfD’s turn was so hard that Bernd Lucke, one of the movement’s founders, quit the party last summer.
The migration crisis may have been the impetus for the AfD’s emergence, but it’s no surprise that a right-wing alternative to Merkel’s Christlich Demokratische Union (CDU, Christian Democratic Union) is coming into view. She has become Germany’s most dominant politician in a generation by occupying virtually all of the ideological territory on the center-right and the center-left, leaving her right flank somewhat unprotected.
Hugging the center-left Sozialdemokratische Partei Deutschlands (SPD, Social Democratic Party) into two grand coalitions since 2005, she’s shown a willingness to poach its most popular policies, including a raise in the German minimum wage. She’s been at the center of difficult battles to keep the European Union united, including last summer’s near-disastrous negotiations to keep Greece in the eurozone. The effect has been that more moderate voters have flocked to the CDU — so much so that she nearly won a remarkable absolute majority in the Bundestag in September 2013.
But it also means that voters who want change are turning not to the CDU’s junior coalition partner, the SPD, but to fringe groups, including the AfD. While the AfD’s gains are real, and they shouldn’t be ignored, neither should they be overstated. Far-right politics in Germany have existed for years, and while it’s true that the AfD clearly took votes from the CDU in Sunday’s state elections, it also appears that the AfD draws from far-left voters in eastern Germany and from disaffected SPD voters in western Germany.
The three states that held elections on March 13 couldn’t be more different, and it’s a risk to make blanket statements about the future of German politics through generalizing the results of Sunday’s elections.
The largest headline of Germany’s slate of state elections today will be the rising success of the eurosceptic, anti-immigrant Alternative für Deutschland (AfD, Alternative for Germany).
But it really shouldn’t be.
Even at the height of anti-refugee sentiment, the AfD that won no more than 23% of the vote in any state, and it will not come close to holding power in any of those states.
Meanwhile, Winfried Kretschmann surged to what should almost certainly mean reelection as minister-president in Baden-Württemberg, a sprawling and prosperous state in southwestern Germany, home to 10.6 million people (Germany’s third-most populous). With a rich industrial heritage in and around Stuggart, the state is home to Daimler, Porsche and software manufacturer SAP, and it currently has Germany’s lowest unemployment rate (4.0%).
Kretschmann came to office in 2011 through something of a fluke, when his party, Die Grünen (The Greens), narrowly outpaced its center-left coalition partner, the Sozialdemokratische Partei Deutschlands (SPD, the Social Democratic Party). Together, the two parties managed to win more support than the center-right Christlich Demokratische Union (CDU, Christian Democratic Union), the party of Germany’s powerful chancellor Angela Merkel, and a party that had long dominated a thrifty state of southern German conservatism, ruling almost without interruption for 60 years. The SPD may have withered to the point where Kretschmann will need to find a new governing coalition. But in 2016, for the first time in the postwar period, the CDU wasn’t the first-placed party, falling behind the Greens. That’s due in part to the AfD’s rise, siphoning votes from the CDU, but it also has to do with the wildly popular Kretschmann. Continue reading Kretschmann wins big in Germany’s prosperous south→
As predicted, Spain’s messy general election resulted in no clear winner, and none of its two largest parties could claim a majority in the lower house of Spain’s parliament.
What’s more, though two upstart parties upended the political status quo that’s existed for nearly 40 years in Spain, neither did so well that they can form a government — or even serve as a kingmaker for one of the two established parties.
While the conservative Partido Popular (PP, the People’s Party) emerged with the largest share of the vote, prime minister Mariano Rajoy has plenty of reason to despair. Much of the party’s support comes from older voters in the Spanish countryside, and the PP benefited from an electoral system that delivers slightly more seats to parties with support outside Spain’s urban centers. Nevertheless, he has lost his absolute majority, dropped 64 seats and, worst of all for Rajoy, there’s no clear or easy path to a governing majority. Though Spain’s economy has stabilized under the past four years of PP rule, unemployment remains staggeringly high (21.2%). The party’s leader since 2004, Rajoy might ultimately be pushed aside during coalition talks for a younger or more charismatic leader, like deputy prime minister Soraya Sáenz de Santamaría.
Meanwhile, the center-left Partido Socialista Obrero Español (PSOE, Spanish Socialist Workers’ Party) suffered its worst defeat since the transition to democracy in the late 1970s. Its new leader, Pedro Sánchez, a moderate economist, simply could not convince voters to look beyond long-simmering corruption scandals (which, by the way, also plague Rajoy’s party) and the record of the prior PSOE government, which took the first steps toward the path of austerity measures in the aftermath of the 2009-10 eurozone debt crisis.
Indeed, the PSOE just barely outpolled Podemos, an anti-austerity alternative that burst onto the Spanish political scene in 2014, embracing the anti-establishment protests of the ‘indignados’ movement. Despite leading polls earlier this year, Podemos crashed as fears grew that it would cause the kind of economic pandemonium that plagued Greece after the election of the far-left SYRIZA this year. Its leading spokesperson, Pablo Iglesias, began to moderate his movement’s rhetoric, and rallied to a strong third-place finish.
The center-right liberal Ciudadanos (‘C’s,’ Citizens), a federalist, economically liberal party founded in Catalonia in 2007, made the leap from regional politics to national politics, but its leader Albert Rivera must be disappointed that it failed to steal more voters from Rajoy.
With another handful of seats going to various pro-independence Catalan parties, as well as Basque and Galician regional parties, the net result is that no one has enough seats in the 350-member Congreso de los Diputados (Congress of Deputies), the lower house of Spain’s legislature, the Cortes Generales (General Courts).
Notably, Rajoy maintained the PP’s majority, however reduced, in the far less powerful upper house, the Senado (Senate), which can be overruled on most matters (i.e., not ‘organic laws’ that deal with constitutional matters, civil rights and federalism) by majority vote of the Chamber of Deputies.Voters elected 208 senators on Sunday as well (an additional 58 senators are appointed by regional assemblies).
Two sets of statistics are worth considering.
First, the traditional major parties (the PP and PSOE) won just 50.7% of the vote in aggregate, compared to 83.8% in the 2008 election and 73.4% in the 2011 election. Obviously, that means Spain is entering a new era where coalition politics are more important. That’s not entirely unprecedented — when José María Aznar won 156 seats after the 1996 elections, he had to work with Catalan, Basque and Canarian nationalists to form a stable government. But the success of Podemos and Ciudadanos has transformed Spain’s politics from a two-party matter to a multiparty affair.
Secondly, among the four major parties to emerge from the 2015 election, it’s staggering just how evenly divided the Spanish left and right are. Together, the PP and Ciudadanos won 42.65% of the vote and the PSOE and Podemos won 42.67%. Spain’s electorate, in the broadest sense, delivered neither a mandate to a sharp left turn or a sharp right turn.
What Spain now faces is a difficult choice of among three different paths, all of which carry their own risks and challenges. Spain’s new young king, Felipe VI, will also take a more hands-on role in the coalition formation process than his father, Juan Carlos I, ever did. The good news for Spain is that the three options each mirror paths taken by three of its fellow European Union member-states in the last three years:
Germany 2013: a ‘grand coalition’ between the two established parties;
Portugal 2015: a fragile coalition government that brings together all of the parties and movements of the left; and
Greece 2012: deadlocked coalition talks lead to fresh elections.
To the extent that Spain is entering a new coalition-based era of its parliamentary politics, a reshaped Spanish political landscape might transcend 20th century fractures and the transition to democracy that’s dominated Spanish political life for a half-century.
Though I wasn’t able to join The Atlantic‘s conference this week on the future of the LGBT civil rights fight, I took to Twitter earlier today to make that case that the future of the LGBT rights fights is largely international in character.
In the span of six days, German chancellor Angela Merkel has made a teenage Palestinian refugee cry with her government’s stand on refugee and immigration policy (then tried to pet her, in what must be one of her most cringe-worthy moments as chancellor), reiterated her increasingly isolated position in Europe in opposition to LGBT marriage equality and almost allowed her finance minister Wolfgang Schäuble to force Greece out of the eurozone, in the process undermining Merkel’s authority both at home and within the wider eurozone.
Merkel, who won a narrower-than-expected victory in the 2005 election, reached the apex of her political power in September 2013, when her governing Christlich Demokratische Union Deutschlands (CDU, Christian Democratic Union) nearly won an absolute majority in the country’s parliamentary elections. Despite being forced back into a ‘grand coalition’ with the rival center-left Sozialdemokratische Partei Deutschlands (SPD, Social Democratic Party), Merkel’s popularity crested. At long last, she had won a clear personal mandate for her cautious, seemingly ideology-free leadership.
But when faced with policy issues — like Greece, LGBT rights and immigration — featuring such sharp contrasts, Merkel’s popularity was always going to fall from those stratospheric levels.
The crisis over Greece’s future highlighted the limits of Merkel’s conciliatory governing style — to sit back, wait for a consensus to emerge and follow public opinion, even (or especially) if it means co-opting a rival party’s positions. That’s how Merkel has handled everything from nuclear power to raising the minimum wage. But there’s a limit to that kind of governance. Continue reading Has Germany (and Europe) reached peak Merkel?→
Though it’s Yanis Varoufakis, the Marxist economist and recently deposed Greek finance minister, who is typically painted in the media as the drag on the long-running negotiations to avoid a Greek default and keep the country within the eurozone, his intransigence has been met at every step of the way by Germany’s finance minister Wolfgang Schäuble, whose sneering impatience for Greek demands has been no less personal than Varoufakis’s over-the-top denunciations of European ministerial colleagues as ‘terrorists.’
Schäuble’s sharp-tongued wit has been a constant through five years of negotiations that stretch back long before prime minister Alexis Tsipras and the far-left SYRIZA (Συνασπισμός Ριζοσπαστικής Αριστεράς, the Coalition of the Radical Left) took power in January. On Thursday, Schäuble joked to an increasingly concerned US treasury secretary Jack Lew that he would be willing to swap Europe’s Greece troubles for Puerto Rico’s debt crisis.
When it comes to Greece, Schäuble is in many ways Germany’s opposition leader, even though he’s a stalwart of chancellor Angela Merkel’s governing Christlich Demokratische Union Deutschlands (CDU, Christian Democratic Party). He’s made it clear throughout the course of negotiations that he favors pushing Greece out of the eurozone, a result that other European leaders worry could destroy the single currency’s credibility — not to mention plunge Greece into an even more painful depression. Back in 2011 and 2012, few German politicians — just a handful of grey-haired Bavarian conservatives — were willing to call for Greece’s eurozone exit. Today, however, it’s a mainstream position, even on the center-left.
Germany is currently governed through a ‘grand coalition’ between the center-right CDU and the Sozialdemokratische Partei Deutschlands (SPD, Social Democratic Party) that includes around 80% of the entire Bundestag, the lower house of the German parliament. Nevertheless, Merkel is limited in her maneuverability — if she gives too much to Greece, there’s a chance Schäuble could lead a revolt of CDU backbenchers who already worry Merkel has transformed the party into a political amoeba that sways to the path of political expediency.
As Tsipras and his new finance minister Euclid Tsakalotos wait for Greece’s creditors to evaluation the government’s probable last proposal for debt relief, there’s a lot that lies in Schäuble’s hands. Even as French president François Hollande has directed his entire economic leadership — prime minister Manuel Valls, finance minister Michel Sapin and economic minister Emmanuel Macron — to help save Greece’s place in the eurozone, German doubts about the deal, a three-year bailout of over €50 billion, could still derail Saturday’s deadline. A full summit of the European Union’s leaders has been scheduled for Sunday. With banks running out of money and Greece banks nearing insolvency, European leaders have made it clear that if they don’t reach a deal with Tsipras on Saturday, they will spend Sunday addressing how Greece will exit the single currency.
Germany, as the largest member-state, is the largest contribution to any stability funding that comes from the European Commission and/or the European Central Bank. It’s currently on the hook for around €90 billion of Greece’s €5320 billion public debt. Merkel, despite doubts in her own party, has supported Greece’s two bailouts in the past, though she’s done so by demanding harsh strings that satisfy her own conservative flank and, of course, German taxpayers, who are ultimately on the hook for nearly one-third of Greece’s bailout debt.
Back in 2010, with a nod to moral hazard, Merkel cruelly told then-prime minister George Papandreou that she had to make the bailout as difficult as possible:
Mr. Papandreou says that when he asked German Chancellor Angela Merkel for gentler conditions in 2010, she replied that the aid program had to hurt. “We want to make sure nobody else will want this,” Ms. Merkel told him.
In principle, it was Merkel’s nod toward moral hazard — she couldn’t give the Greeks terms that Spain, Italy, Ireland, Portugal or the Baltic states might soon want. But in practice, it was a sop to the German right, which was growing ever more disgusted at consecutive Greek governments, which haven’t had the strongest reform record.
It’s the most important trans-Atlantic politics meme since that time US president Barack Obama took a selfie with British prime minister David Cameron and Danish prime minister Helle Thorning-Schmidt.
A throwback to The Sound of Music, yes, as the leaders of the G7 (just when we’d gotten used to G8) gathered at Schloss Elmau in the Bavarian Alps to consider the risks to the global economy — most notably, the risks from Russia’s continued mayhem in Ukraine and its growing isolation in the rest of the world. Greece, too, is high on the agenda, with time running out for the beleaguered country to make a deal with its European and IMF creditors.
It’s disappointing, however, that Obama’s first beer in the country was non-alcoholic. (Hint, Mr. President: You’re doing it wrong).
The real question: how would Julie Andrews tackle Russian president Vladimir Putin, or ISIS, or the fallout from a potential Greek fall from the eurozone, or US-EU free trade? Or climate change? That high-profile conference in Paris is only five months away…