09 September 2013

Germany and the European question

Ms Merkel's policies have strained the goodwill between Germany and its fellow euro members – and between German voters and their leaders, argues the FT. Angela Merkel's victory could also help David Cameron in Europe - and the AfD in parliament might be bad news for Britain.

In a televised debate between Ms Merkel and her social democrat challenger, Peer Steinbrück, he criticised her for imposing too much austerity on the southern beneficiaries of EU rescue packages. His intervention offered a glimpse of the debate between senior politicians over Germany’s eurozone policy. Not enough has been heard on either side of the debate, a failing that the eurosceptic Alternative for Germany (AfD) has exploited.

As Ms Merkel retorted, goes the FT-editorial (subscription required), Mr Steinbrück’s criticism rang hollow inasmuch as his party has supported the government in every vote on European policy. More fundamentally, that policy has on the whole succeeded - Ms Merkel’s decision to eschew a grand European vision underpins her popularity. It is also a virtue of necessity: her countrymen will not opt for a great leap into deeper union. Instead she has persuaded Germany’s lawmakers, step by step, to back growing commitments to rescue loans. Each time, she has demanded something in return in the form of constraints on national budgetary freedom; each time, she has received what she wanted.

A new poll by Open Europe reveals splits and confusion in the electorate. A good half of respondents agree with Ms Merkel that if the euro fails, so does Europe; and think the euro must be saved at any price. Almost as many say the euro now threatens the whole European project with its promise of peace and prosperity. And while they do not want their money sent abroad, a large majority state that their view on Germany’s membership of the euro does not depend on whether such transfers will be required.

The same survey is quoted by the Telegraph, having found that 52 per cent of Germans want their leaders to withhold any more loans; 57 per cent oppose cancelling more debts - and 55 per cent think that southern European countries should simply leave the eurozone, reducing it to a more select group of nations similar to Germany. This is taken as evidence that Angela Merkel will enter the final stage of her campaign for re-election amid growing signs that her expected victory will see her join Britain's effort to win back powers from Brussels and could thus help David Cameron in Europe.

On the contrary, if Germany's eurosceptic AfD made it into the Bundestag, which doesn't look impossible after they achieved a record high of 4 per cent in recent polls, this could, perhaps ironically, be bad news for David Cameron, writes Mats Persson, Director of Open Europe in his blog for the Telegraph.

The party is definitely a dark horse, he argues, for two reasons:

• There’s probably a larger chunk of swing voters than ever before – over 30 per cent according to a poll – making the elections unusually difficult to call.
• Secondly, polls often underestimate new, come-from-behind protest parties. Online polls tend to put AfD higher than polls conducted over the phone, suggesting voters are still embarrassed to publicly admit they'll vote for the party.

"Having the AfD in the Bundestag is problematic, as it would have the same effect on Merkel as UKIP could have on Cameron in 2015: It would strip her of an overall, centre-right majority. If the AfD makes it into the Bundestag, it may also mean that the German liberals, the FDP doesn't make it. Then Merkel will almost certainly have to rule with the SPD. And a Merkel-led, centre-right government will be far better for the UK’s chances of achieving a new deal in Europe, than one involving the Social Democrats as this option will be less liberal, and far more oriented towards Paris.

"There’s also another general issue. Though AfD is deeply sceptical of the euro - and wants to see it dismantled - it doesn't really have a wider programme for EU reform, which is precisely what the UK is interested in."

Writing for the Financial Times (subscription required), Quentin Peel agrees that should the AfD enter the Bundestag, a grand coalition between CDU and the Social Democrats was the most likely outcome. However, the FT reports, Angela Merkel has blundered into a bitter new row in the German election campaign by accusing the opposition Social Democratic party of being "totally unreliable" on the eurozone financial crisis. The row that has followed Ms Merkel's remarks could yet help the SPD mobilise its traditional supporters to get out and vote in the election. It could also boost backing for the Alternative für Deutschland, which would come near the 5 per cent to get seats in the parliament.