Europe figures low in German elections

By Jonathon Cini

The most recent election loss last week in local elections in Lower Saxony where the Social-Democrats (SPD) and the Greens won marginally is one of a growing number of defeats for the Christian Democratic Party (CDU) in some of Germany's largest states (Spiegel, 2013).  Last year the CDU also lost the North Rhine-Westphalia election (one of Europe's most populated areas with a population of 18 million) as well as in the wealthy area of Baden-Württemberg in 2011 (BBC, 2012) (Spiegel, 2012) (Spiegel, 2013). Such results have got many in Europe concerned. Observers are asking the question; what outcome will this have on the stability and success of the European Union.

The foreign press are expecting the European Union (EU) to be a major campaign issue. However, inside Germany the competing parties remain largely tight lipped.  It is expected that while Euro politics remains on top of the international agenda, in Germany it will play a more minor role.  In the recent past here in Germany, any euro –sceptical party to emerge has quickly failed (Deutsche Bank Research, 2013).  The population remains pro-European and both major parties know this. Consequently, no major party is likely to submit an alternative path for the European Union during the upcoming campaign.

The two mainstream parties, the CDU and the SPD ultimately share the same principles on European matters. Any discussions that may be held will surround achieving equilibrium between a fiscal union and the pertaining conditions, as well as any future role the European Central bank (ECB) will play in maintaining the political integration of Europe. As Deutsche Bank Research (2013) identifies, the only real difference may arise from SPD leader Peer Steinbrück who has been calling for greater transparency when resolving the EU crisis, and to provide German taxpayers with a greater overview of the costs of saving Europe (Deutsche Bank Research, 2013).

Perhaps Steinbrück has identified reasons for the recent lack lustre performances of the CDU in regional elections. Maybe despite all the reports of high popularity among German voters for Merkel they can instead see through her attempts at hiding the full extent of the financial costs of saving the European Union. Hiding the truth from the German taxpayers who may inevitably be left with the bill has become high priority of the German Government leading up to the election in September this year. 

Late last year The Economist (2012) wrote that the federalisation of Europe through creating a banking union would potentially cost €300 billion-400 billion, with one third of this expense expected to be covered by German tax payers. In addition, mutualising debt is reported to increase Germany's interest costs by €15 billion per annum (The Economist, 2012).  However, it should be pointed out that the alternative, which involved the exit of Spain, Ireland, Portugal, Cyprus and Greece from the EU would cost Germany €500 billion, or 20% of GDP (The Economist, 2012) .

Despite these costs many believe Merkel will still be re-elected. She has an advantageous position given she is caretaker of a solid economy, and at the same time her tough stance on keeping the euro alive resonates with the German public who also remain pro-European (Deutsche Bank Research, 2013). However her coalition partner, the FDP, is not faring so well in opinion polls. Hence, this is why other possible combinations such as the CDU forming coalitions with the SPD and or with the Greens have been proposed. In the recent past, an alliance with the greens was seen as unlikely, but given the Government's change in energy policy, nuclear power is no longer an obstacle between both parties (Deutsche Bank Research, 2013).

After analysing the political climate in Germany, it appears as though European politics will not be on the top of either major parties agenda in the upcoming German elections. However, it does seem worthy of a discussion, given the potential repercussions and costs to the German public in the long term.

This in turn highlights the importance and significance of David Cameron's speech last week, who holds fears for the England in a more federalised European Union. If Steinbrück succeeds in his call for greater transparency before the German election we may see leaders of the respective parties, tabling alternative policies in their upcoming campaigns concerning the future of the Europe Union, as has happened in England this week.

Sources

BBC, 14 May 2012, "State election deals blow to Germany's Merkel"

Deutsche Bank Research, January 4 2013, "Germany at the polls"

Spiegel Online, March 20 2012, "Snap Election in NRW : State Vote Threatens Merkel's Government"

Spiegel Online, January 21 2013, "CDU Loses Lower Saxony: State Defeat Heralds Tough Re-Election Fight for Merkel",

The Economist, August 11 2012, "Tempted, Angela?"