If in Italy, the farewell speech of a long-time leader, in power for 16 years, had been greeted with screams and laughter, the next day the main German newspapers, starting with the Frankfurter Allgemeine, would not have hesitated. The usual Italians. This time, however, it was the very icon of the most recent European history. That Angela Merkel who in her speech had the audacity to accuse Olaf Scholz, the SPD candidate for the chancellery , twice . That the polls consider winning. To start pandemonium.
It would be minor news, if it did not show the nervousness that characterizes an electoral campaign, such as the German one, on the outcome of which not only the near future of Germany will depend. But of the entire European Union. In fact, depending on who wins – the Csu-Liberali-Verdi or Spd-Linke-Verdi line-up – the door of the Recovery Fund, which has just been ajar, will be opened or closed permanently.
The latest polls indicate a prevalence of SPD. Which accompanies the collapse of the CDU. The latter accounted for 22 percent, against 23-24 of its rival-allies in the Grosse Koalition, which is still standing. The fall of Merkel’s party would still amount to around 10 percent, although the latest figures indicate a strong recovery. However that may be, it would go little to the benefit of the Social Democrats. Having the latter a percentage – again according to the polls – equal to just 3 percent more than the historical low of the previous elections. Hence the annoyed reply of Merkel herself: “The counting of votes is done on election day”.
If things were to go according to the forecasts of the polls, it would be a small revolution and the end of an experiment, that of the Grosse Koalition, which has characterized the German political landscape since the birth of the euro. A longevity of over 15 years, except for a short period (2009 -13) in which the stainless Frau Angela governs the country with the liberals of the FDP. The transition from national unity to the regime of alternation will be good or bad
This is the great unknown that disturbs the sleep of so many commentators.
Difficult to answer in the play of light and shadow that has always characterized the life of each country. Thanks to that political experiment, Germany has reached a position of primacy in Europe. Certainly not the re-edition, in various guises, of the Holy Roman Empire, a sort of Fourth Reich, as some English historians claim, but in any case a supremacy, at times, without hegemony. Without that ability, that is, to combine honors and burdens that the leadership function has always entailed.
There is no doubt that the Grosse Koalition has contributed to exalt, for better or for worse, the elements of continuity in German history. Starting from the drama represented by the reasons that led to the fall of the Weimar Republic: hyper inflation, the destruction of national savings and so on. A trauma that, despite the past years, has weighed on the conduct of economic policy. This is demonstrated by the large surplus on the current account of the balance of payments. Which was already characteristic of the Federal Republic, but which, after reunification, after an initial period of uncertainty, has become even more consistent.
That mercantilist excess was nothing more than the demonstration of a tendentially and systematically deflationary policy: ready to sacrifice, in the name of financial stability, opportunities for growth and development. As well as collective well-being. Problems that in the aftermath of the efforts made to fight the pandemic are found in all their scope. Scholz, the SPD candidate, made proposals to bring the federal budget back under control, not by reducing expenses, but by increasing the tax burden on higher incomes, up to and including the hypothesis of a property. Measures aimed, above all, at guaranteeing the macroeconomic balance of the country and its strong exporting capacity.
But what is good for Germany is also good for Europe
This is the other horn of the dilemma. What will change in Brussels, the day after September 26, when, when the polls are closed, it will be seen who won and who lost
Much will depend on the figure of the new Chancellor. The polls favor Scholz, against Baerbock, the leader of the Greens, and Laschet, for the CDU. Characters who, at least at the beginning, will not have the charisma of Angela Merkel. Her ability to hold off those who, like Jens Weidmann , the president of the Bundesbank, have always tried, unsuccessfully, to give Mario Draghi a hard time.
Some indications emerge from the electoral programs of the individual parties, including a different propensity for renewed financial rigor. Stronger among Catholics and Liberals, less so for Greens and Social Democrats. The dates also diverge, from which to trigger any trap, as well as some details. While continuity with the past seems to prevail for the CSU, some important news are hypothesized for the eventual “traffic light” coalition (Social Democrats, Liberals and Greens). Starting, as has been said, with fiscal policy. Which nevertheless encounters the strong opposition of the Christian Democrats.
In fact, on the public investment front, especially if green, the agreement in pectore of the likely winning coalition could lead to the right to the golden rule. For green investments alone, the budget deficit could be overcome, which the German Constitution limits to 0.35 per cent of GDP. All the more reason, then, if it were the European Commission to take on the problem, making the Recovery Fund permanent. Hypothesis that others see as smoke and mirrors.
The agreement on the other issues is more complicated. Especially for foreign policy: all the more so if the coalition were to extend to Linke. The German extreme left does not recognize itself in NATO. As for the Greens, they do not want to discount either China or Russia. To the point of wanting to question the same gas agreements, so criticized by the American administration.
Then there is the immigration chapter. The Christian Democrats made self-criticism, after the famous New Year, in Cologne, which led to the indictment of a hundred immigrants for the violence perpetrated. The Greens, on the other hand, are calling for greater openness, especially in favor of refugees from Afghanistan. Social Democrats and liberals, in turn, would be inclined to favor their reception in neighboring countries. In short: a beautiful mosaic of positions. It will not be easy to reach a compromise solution.
One would say “great and confusion under the sky”. But unlike what Mao Zedong believed, “The situation is far from“ excellent ”. It will therefore take a lot of patience and as much attention. The international context, Covid permitting, is rapidly changing. And, as has always happened, the epicenter of the change will be the United States. It will be up to the Fed to chart the course to which the ECB, albeit obtorto collo, will have to adapt.
In its last meeting, the European Central Bank somehow played with words. It is not tapering – Lagarde said – to justify a reduction (of how much
) of the purchases of securities, under the Pepp program, but simple recalibration. It will certainly be so. Although in the eyes of most, it appeared as a timid choice waiting to understand how strong the west wind will be.
A second variable is then given by the discussion that has just opened, in Ecofin, on the destinies of the Stability and Growth Pact. Pure and simple return to the past say the “frugal” (Denmark, Latvia, Czech Republic, Netherlands, Sweden, Finland and Slovakia) against the expectations of the rest of the European countries. Germany, at the moment, has not pronounced itself. But the CDU has made it clear that it agrees with this position and flew into the polls.
Also because Scholz, as head of the Ministry of Finance, was somehow involved, even if not personally, in a bad money laundering business. Due to the lack of supervision exercised by his department on the banks involved in the affair. Yellow in yellow, then. There is definitely no peace in Berlin, demonstrating how difficult it will be to drive the weary European convoy in the coming years. Which risks, excluding Mario Draghi, of not having characters up to the need.
