Germany has become a dominant force in Europe. Its position has been forged with a strong manufacturing sector that has made it one of the the world's largest exporters. Those exports bring in massive amounts of capital, which Germany then spends primarily in Europe, providing a major source of funds for the economies of other European nations. Furthermore, Germany is also Europe's most populous nation and that makes polling the opinions of its people seriously relevant to understanding the future of Europe as a whole.
These factors make German economic policy important far beyond the borders of the German federal states and the near future of those policies is now up for debate as Germany goes to the polls for its Federal Elections on 22nd September.
The main contenders for the election are the incumbent Christlich Demokratische Union Deutschlands (CDU), led by Chancellor Angela Merkel, and the Sozialdemokratische Partei Deutschlands (SPD), led by former Finance Minister Peer Steinbruck. Behind the two biggest parties are three smaller third parties: the Freie Demokratische Partei (FDP), Die Grunen (The Greens) and Die Linke (The Left).
Germany is currently governed by the CDU, led by Chancellor Angela Merkel, in coalition with the FDP. That government is much comparable with the UK's coalition government, an alliance between majority conservatives and junior partner liberals. On coming to power back in 2005, Frau Merkel and the CDU had aimed to bring in a number of conservative and free market reforms - including tax code simplification, tax cuts and reduced public spending (Economist, 2013; BBC, 2005) - however events have largely gotten in the way of attempted reforms.
Initially Chancellor Merkel's time in office began in a grand coalition between the CDU and the SPD, which limited the ability of the CDU to pursue conservative policies. The subsequent financial crisis has since brought further restrictions. However, it also brought political opportunities. Chancellor Merkel has been a prominent player in European Union politics. She has been a strong advocate of a conservative, austerity-based, response to the financial crisis and courtesy of Germany's influential role has managed to get austerity placed at the heart of the EU's response (Vasagar, 2013).
And that role in EU austerity measures is one primary sticking point between the CDU and their major opposition, the SPD. A social democratic party led by Herr Peer Steinbruck, the SPD are Germany's oldest political party, founded with much the same purpose in mind as the UK Labour Party; championing the rights of workers. Herr Steinbruck, whose reputation for 'straight talk' and blunt language seems to have harmed his chances more than helped (BBC, 2013), has been keen to pounce upon Chancellor Merkel's role in EU austerity and push for a more growth oriented strategy.
Like other social democratic parties in Europe - such as the UK Labour Party and the Socialist Party in France - this means reducing or restricting austerity in favour of more public spending. Herr Steinbruck points to the success of the Marshall Plan, implemented following the Second World War, in using massive investment to support the recovery and development of allied nations (BBC, 2013).
The success of one of these parties in establishing or confirming their economic policy in Germany will have a profound affect upon the policies of European nations over the next few years. But that will only happen if either of the main parties can successfully form a coalition. Germany has seen coalition governments after every election since 1949, a product of its electoral system that seeks the stability and representation offered by proportional representation.
That system means that parties have to find things in common on which to work together, in order to gather sufficient support to govern. This is most easily achieved by one of the major parties allying with one of the third parties. The most successful amongst the third parties is the FDP. A free market liberal party, in recent years they have tended towards siding with the CDU - as they currently do in a coalition government - with whom they share economic policies (BBC, 2013).
Opposing those positions are the two other third parties: The Greens and the Left.
The Greens are likely to find common ground with the SPD, with whom they share concerns for social welfare. Important issues for them include the implementation of a national minimum wage, an issue that the SPD has also campaigned on. The Greens also benefit from the general adoption by the other parties of their policy favouring the abandonment of nuclear power by 2020. The likelihood of Red-Green alliance between the SPD and Greens is increased by both prior alliances at the federal level - having previously governed together between 1998 and 2005 (BBC, 1998) - and recent regional elections where they have formed coalitions.
The other third party, The Left, are a party representing the far left of the political spectrum. While the party has much in common with both the SPD and the Greens, it has also carried an unfortunate reputation as an extremist group. With a history rooted in communist East Germany's governing party, its history since reunification has been mired by its past and by the controversial surveillance of certain party members on suspicion of extremism (Handelsblatt, 2012).
The outcome of this election will be incredibly important to all other European countries and many other countries around the world. From the financial crisis in Europe, to the talks to establish an EU-US free trade agreement (Rawlinson, 2013), to the President of the European Commission's stated belief in the EU's State of the Union debate that the time has come to closer bond the nations of Europe (BBC, 2013), the priorities set by Germany's election will affect the path forward at a crucial time.
However, debates within Germany have veered away from the idea of the country's larger role in European and world affairs (Hewitt, 2013). Germany's role in financial rescue efforts in Europe is a difficult subject, and both sides have preferred to focus on domestic concerns with clearer divides such as employment law and the minimum wage.
Yet the far reaching influence of this upcoming election cannot be denied. Its economic strength, large population, and influence within the European Union, make what happens in Germany relevant to people in many other countries. Like the Italian elections this spring, and the French elections the previous spring, what happens in Germany will have wider consequences.
Yet the far reaching influence of this upcoming election cannot be denied. Its economic strength, large population, and influence within the European Union, make what happens in Germany relevant to people in many other countries. Like the Italian elections this spring, and the French elections the previous spring, what happens in Germany will have wider consequences.
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References:
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+ The Economist's 'Angela Merkel: A safe pair of hands'; 14th September 2013.
+ BBC's 'Merkel defends German reform plan'; 12 November 2005.
+ Jeevan Vasagar's 'Angela Merkel's rival accuses her of 'deadly austerity' in TV debate'; in The Telegraph; 1 September 2013.
+ BBC's 'Steinbruck rude finger irks Germans in election run-up'; 13 September 2013.
+ BBC's 'Profile: Peer Steinbruck'; 13 September 2013.
+ BBC's 'German election: Potential coalition "kingmakers"'; 12 September 2013.
+ BBC's 'SPD approves red-green coalition'; 25 October 1998.
+ Handelsblatt's 'CSU-Generalsekretär bringt Verbot der Linken ins Spiel'; 30 January 2012.
+ Kevin Rawlinson's 'NSA row: Merkel rival threatens to suspend EU-US trade talks'; in The Guardian; 26 August 2013.
+ BBC's 'Barroso's state of union: EU must not delay reforms'; 11 September 2013.
+ Gavin Hewitt's 'Europe "on hold" over key German election'; on the BBC; 11 September 2013,
+ Sheila Pulham, Chris Fenn, Garry Blight & Guardian Research Department's 'Left, right, left: how political shifts have altered the map of Europe'; in The Guardian; 9 May 2012.
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