♠ Posted by Emmanuel in Europe
at 11/16/2011 02:19:00 PM
There's interesting stuff c/o the Globalist's Stephan Richter on how German austerity measures under previous German Chancellor Gerhard Schroeder of the Social Democratic Party (SPD) actually set the stage for his CDU successor Angela Merkel to reap the benefits. The straightforward narrative here is that he effectively sealed his political fate as his traditionally left-leaning party could not stomach downsizing the welfare state. Ironically, Schroeder's actions set Germany as a pace-setter for European reform that have now put it in good stead when various economic commentators were literally crying Wolf way back when:A key ingredient of Germany’s success in today’s increasingly dismal global economic environment was that a former chancellor, Gerhard Schroeder, mustered the courage to jump over his shadow.From what I can gather, Germany's success at implementing reform first does not necessarily mean that other countries should follow its example. Rather, just as Schroeder of the SDP put into place uncharacteristically "neoliberal" reforms, so should the CDU be more charitable toward its European neighbours as opposed to being German-centred all the time:
Thanks to the fact that he, a man of the center-left, was principled enough to launch structural reforms to Germany’s welfare state via the so-called (and aptly titled) Agenda 2010, Germany’s economy is now performing relatively well. Commentators such as the Financial Times’ Martin Wolf had claimed at the time that the German economy would fail due to high price and benefit levels, which the country would not be able to reduce. As a consequence, they argued, it would catapult itself out of a competitive world market.
Things have turned out differently. Although controversial, Schroeder’s historic achievement was to bring German unemployment benefits down to the American level. The fact that Germany’s unemployment rate, long an albatross around the country’s neck, is now at the lowest level in two decades (and in line with U.S. levels during good economic times) proves the architects of the project right.
However, now she faces a similar test of political courage. Just as it was a test of character for Schroeder and his Social Democratic Party (SPD) to trim the welfare state, so it is now a test of character for Mrs. Merkel and her Christian Democratic Union (CDU) to accomplish the rightsizing of the nation state.While there are problems with the identification of CDU as being more domestically oriented--think of Helmut Kohl--I do agree that the challenge of a conservative party accepting "ever closer union" especially at this time are enormous and at least on a par with Agenda 2010 for the SPD. Hopefully statesmanship wins out. That is, you may even sacrifice your political career, but what matters to you most in the end?
While in a completely different domain, that is a challenge on par with what the SPD had to accomplish. Basically, the CDU’s voter base consists of proudly patriotic people. But rather than bask in the illusory glory of Germany doing marvelously, thank you, Mrs. Merkel has to move her base to accept that, in the end, Germany does have to provide a significant back-up mechanism for Europe. Making the case for sharing a nation’s wealth with others is certainly no easy task.
And so bring on those EU-wide bonds signed severally by Eurozone member countries--Germany included first and foremost...
Just imagine the firestorm the German unions would have unleashed against the CDU had it been the one to implement the structural reform package called Agenda 2010. The beauty of the political dialectic governing Germany is that it is now the CDU that must act in the overall national interest by overcoming the overly nation-state-oriented thinking in its conservative wing.
Conservatives cannot continue basking in self-satisfaction at the good things the EU delivers to Germany’s balance sheet, while refusing to accept any debits. That is why Mrs. Merkel has quite a task ahead of her. She must, and she will, make the case for a truly historical transition toward a deeper integration process.
