Friday, 4 October 2013

Mrs Merkel's real challenge

So Germany's centre-right Christian Democrats won their general election. Convincingly. Resoundingly. At one point there was even talk of an overall majority - a rare event indeed in the history of the post-war Federal Republic. Angela Merkel (above) is to be congratulated. Safe, unsurprising, managerial and above all conservative with a small 'c' as well as a big 'C', she has managed the rare trick of becoming the nation's 'mother' - reassuring, capable, respected and safe.

But where does she go from here? With her preferred Free Democratic coalition partner outside of Parliament for the first time, she's probably going to have to team up with her major rivals, the Social Democrats. That'll involve the creation of a broad-based coalition that'll be able to tackle problems with no fear of defeat in parliament - but which might also proceed very, very cautiously.

That's going to be a problem for the rest of Europe. For although the Social Democrats might pull Mrs Merkel further towards the centre in her dealings with the Eurozone's debtor nations (which can only be a good thing), there's no sign whatsoever that any changes will be anything more than superficial. Why should there be, the Christian Democrats having been sent back yet again with a better bargaining hand? There's also every sign that official German attitudes to the United Kingdom's much-maligned renegotiation of the terms of EU membership will harden, given the Social Democrat's hostility to the development of any such a la carte Europe.

What might genuine radicalism look like, though? Well, it'd see Germany engage in much more debt relief to Ireland, Spain, Portugal and Greece - and Italy, too, if that nation can finally break the logjam of its stiflingly personal and poisonous electoral politics. Most importantly, there'd be the creation of a true European currency, rather than the simulacrum of a 'Euro' that we have now. One debt; one set of bonds; one powerful Finance Ministry to match its central bank; one budget. That, and that alone, can possibly stabilise the Euro and allow the citizens of Europe's economically smaller and weaker nations some relief: for interest rates and risk will then abate somewhat.

That's where Britain (and some others) come in. If that's going to happen, the bonds of EU membership are going to have to loosen a little, for these countries just don't sit very well within that system. Germany's going to have to allow that, too, for the European Union to thrive.

So there we have it: a deepening, and a paradoxically loosening, Union. Liberated by her electoral triumph, a truly radical leader would seize the initiative and build a really powerful set of European financial institutions, before letting nations who don't want to join out of some of the tighter knock-on regulations that will inevitably follow. For now, Mrs Merkel commands all she surveys. She is Europe's true leader.

But will she seize that moment? Probably not. She's built a career on caution, conservatism, and step-by-step incrementalism. She hasn't got where she is today by defying the voters - and Germans are tired of 'paying for other people', as they see it. The vision is probably a fleeting one, for Germany's political class, no less than Britain's, is rather stunted in its ambition and its imagination.

Which is a pity for everyone, but especially for the citizens of Greece and Spain, driven into ruin by a Europe that can bring itself to be neither one thing nor the other.