Monday, September 23, 2013
Germany: good news for Europe?
Angela Merkel has obtained an excellent result in the German general election. However, the liberals and the euro-sceptics failed to overcome the threshold to go into Parliament. The result is that there is a left wing majority in the German Parliament. This majority will not translate into a left wing government because the SPD rejects to be in government with the extreme left (probably for good reasons). However, the fact that a potential left wing majority exists is an important constraint for any policy. The social democrats slightly improve their percentage relative to the previous election. This illustrates the general difficulties of the social democracy in Europe, but at the same time it shows that any realistic progressive alternative must be built around social democracy. The wave of fringe parties eroding the role of mainstream parties has been stopped, at least in Germany, probably showing the correlation between a country being deep in crisis and the surge of these fringe parties. Wolfgang Munchau, associate editor of the Financial Times, said that a slight improvement is the worse that could happen to the SPD, because it will not cause a big change in German policies towards Europe, and it will not trigger the profound renewal that is necessary in the SPD. However, given that realistically it was very difficult to avoid a good result for the Christian Democrats, a grand coalition between the CDU and the SPD is a lesser evil that should produce small but significant changes in the policies to manage the euro crisis. We should expect some moderation of the austerity policies and a serious push towards an integrated Europe that make growth policies possible.