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15 September 2013

Wolfgang Münchau: Germany’s 'boring' election is vital to the eurozone

Writing for the FT, Münchau says that the important question of this election is whether the new German parliament is more or less likely to agree steps to a resolution of the eurozone crisis. If the SPD and Greens were to win outright, they would move faster than Merkel on crisis management.

The elections on 22 September are ultimately very important. Once you move beyond this admittedly boring election campaign, there is actually quite a bit at stake, but this is not reflected in the political debate. The outcome of the eurozone crisis in particular will depend to a large extent on how the SPD performs at the ballot box.

Here are some possible scenarios: If the current centre-right partnership of Christian Democrats and liberal Free Democrats fails to get a majority, the SPD may end up being pushed into a grand coalition with Ms Merkel. In that case, expect little immediate change. Any serious debate about a renewal inside the party will be put on ice.

If the SPD and the Greens were to win the elections outright, they would probably move faster than the Merkel coalition on crisis management simply because they would have a majority in both chambers of the parliament. Not a single poll, however, has come even close predicting such a possibility.

The outcome becomes truly interesting if the present coalition wins: The bad news is that not much will change initially. A CDU-FDP coalition will do the minimum needed to prevent an immediate break-up of the single currency but no more. If Germany is to ever change its position, we will most likely see this happening first on the left. And herein lies the potentially good news. The SPD is more likely to renew when in opposition than when in government.

Full article (FT subscription required)

© Financial Times

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