Merkel II will change EU

Re-elected to the German chancellorship with a new coalition partner, Angela Merkel intends to steer a different political course in her second term of office. The economy, diplomacy, energy: Germany’s new tack could have far-reaching consequences for Europe.

Published on 30 October 2009 at 18:49
Chancellor Angela Merkel at the Aquila G8 summit on 8 July, 2009 (AFP)

On the domestic front, the government are planning to slash taxes, even if it means plunging the national debt to perilous depths. In the international arena, they have already announced plans to cement ties with Poland and France, as well as steps toward landing a permanent seat on the UN Security Council. These are the priorities of the new German government: let’s explore their ramifications for Poland and Europe as a whole.

1. Europe’s dwindling coffers

Germany, like most EU countries, is sunk deep in debt. This is the news that worries Europe most. “That means Germany won’t be donning its EU Santa Claus costume again any time soon to dole out European handouts,” forecasts Thomas Klau, an analyst at the European Council on Foreign Relations (a pan-European think tank). Under the influence of her new coalition partners, the FDP free-market liberals, the chancellor has had to give in to the idea of tax cuts. The bottom line: the national debt will grow by another 5% of GDP in 2011.

In view of the recent constitutional amendment requiring the government to tackle the budget deficit, a thoroughgoing austerity policy is bound to be in the offing. “A Germany that balks at every cent spent does not bode very well for the next round of EU budget talks for 2014–2020,” underscores Thomas Klau. Germany, the biggest contributor, will want a small budget. Poland, the chief beneficiary of European aid, will want the opposite. The CDU/CSU (Christian Democratic Union/Christian Social Union) and FDP (Free Democrats) coalition have already announced that the cost-cutting will mainly affect regional spending. But Polish farmers – and those elsewhere in the Union, for that matter – have nothing to worry about: thanks to unrelenting pressure from the Bavarian CSU, which traditionally represents Germany’s rural electorate, there won’t be any major changes in the agricultural domain.

2. No to protectionism and no European tax

In their coalition deal, Angela Merkel and Guido Westerwelle’s government repeatedly eschew protectionism and solemnly swear to abide by EU competition rules. The power-sharing coalition aim to press ahead with the liberalisation of the European market, and have ruled out the idea of a European tax that Gerhard Schröder fought for a few years back. On the other hand, the advocates of a strong Europe in the international arena are delighted with the CDU/FDP’s outright support for the Lisbon Treaty.

3. Reaching out to Poland

France and Poland, the only European partners mentioned in the coalition agreement, will be Germany’s key allies over the next four yeas. That seems perfectly normal as far as France is concerned, but more surprising with regard to Poland – and it goes to show that government elites in Berlin believe in breathing new life into cooperation tools like the Weimar Triangle. “The possibility of bolstering its alliance with the main EU players is a chance not to be missed for Warsaw,” stresses Gunther Hellmann, a political scientist at Frankfurt University.

4. More room for manoeuvre in Russian relations

Maintaining good relations with Russia remains a top priority of German diplomacy. Berlin will not relinquish its support for companies doing business with the Eastern goliath. The coalition agreement, however, does include several provisions that show Angela Merkel has learned some lessons from Gerhard Schröder’s too overtly Russophilic stance. The new government’s determination to backtrack on the nuclear phase-out law negotiated by the Social Democrat/Green administration in 2000 is bound to have an impact on relations with Russia. By banking on nuclear power, Germany would reduce its dependence on Russian gas for a while. “Atomic is only a temporary solution though. Real diversification will necessarily involve petrol and natural gas from Central Asia and the Caspian Sea region. We’ve got to make the most of the next four years to develop these channels,” regional expert Rainer Lindner told us.

5. Berlin is ready to join the major league

“We want to play an active part in the alliances of which we are members,” it says in the coalition agreement. Berlin’s desire to take a permanent seat on the UN Security Council runs right along these lines. This is one of the few ideas chancellor Merkel has co-opted from Gerhard Schröder. However, Germany would be willing to forego that option if the EU were to apply for a common European seat. Still and all, it is hard to imagine the UK and France leaping into that breach.

COOPERATION

Franco-German honeymoon

Nothing happens by chance in politics. Now that she has been re-elected Chancellor by the Bundestag, Angela Merkel will make her first official visit to Paris. Although it may have prompted harsh criticism in Germany, her economic about-turn has made one man happy: Nicolas Sarkozy — who will no longer be the sole defender of a policy of increasing the public deficit. “It’s too good to be true, a German who is nearly a Keynesian,” remarks Le Monde. At a joint press conference on Wednesday 28 October, the two heads of state were clearly delighted with each other. “Her choice of promoting growth by reducing taxes is very useful for Europe, and it will enable France and Germany to work more closely (…) I am pleased to welcome a great friend tonight,” announced the French President. “Lieber Nicolas, vielen Dank ! ” [Dear Nicolas, thank you very much!] replied a visibly chuffed Mrs Merkel. ” The divisive issues of the past — Europe, NATO, and enlargement — have simply vanished,” remarks Le Monde. The two countries are already preparing joint propositions on more extensive economic collaboration to be presented in January. In the meantime, Angela and Nicolas will meet again on 11 November under the Arc de Triomphe in Paris for a joint commemoration of the 1918 armistice.

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