MERKEL THE MOVING FORCE
While the expected grand coalition with the Socialists would undoubtedly mean a change in some policy areas for her government, it could help soften the emphasis on austerity at EU level.
But real movement towards a safe and secure common currency will need to move power away from the Bundestag which must vote on an ever-increasing number of issues, including any credit line the EU’s bailout fund will approve for Ireland.
This will require a change in EU treaties to bring them into line with what the German Constitutional Court insists is necessary. It could also open the way to major institutional change in the European Parliament which, the court argues, is not properly democratic because the bigger the population of a country, the fewer members of parliament it has. It says this imbalance needs to be removed — and such a change would open the way to a transformation of the roles of the European Commission and the council that represents the EU states.
But the moving force in all of this is likely to be Merkel. A physicist and daughter of a Lutheran pastor who grew up in East Germany, nobody really noticed her ambition in the CDU until she stepped into power.
Known as Mutte — mother — she tends to lead by default, interested in knowing the outcome before going ahead with the experiment and finds economics less than an exact science.
A master at keeping all the elements of power in Germany in balance, she has maintained a steady ship through taking minimum action, mostly defensive and only the essential. Thanks to the labour and tax reforms introduced by her Socialist predecessor, Gerhard Schröder, Germany had made its adjustments before the euro crisis and was well positioned to ride out the storm.
And thanks to her decision that the bank crisis would not be recognised as an EU or euro crisis and that consequently each country would look after their own banks, she has been able to quietly pump billions into German banks without markets becoming aware.
Ireland’s decision to repay all those who speculatively put money into the Irish banks helped her deliver her policy of keeping Germany clear of the fallout.
Her small economics approach that debt equalled sin was widely accepted by a German public, a high proportion of whom are working poor in a country where many of the jobs are exempt from a minimum wage.
She has been ably assisted and guided by her finance minister, Wolfgang Schäuble, with the main difference being that he is more committed to the EU and to a widely held common currency. He is unlikely to remain in the job with any coalition partner wanting the post.
There has been little investment in infrastructure including road, rail and internet over the past decade, with internet speeds in some parts of the country among the slowest in the EU.
During her chancellorship, Germany has moved centre stage not just in the EU but globally. The complaints from some quarters now are that Germany is not taking sufficient hold of the reins of power as the US did after the last world war.
It is quite clear that when the White House wants to “phone Europe”, it phones Merkel. Much of the rest of the EU accepts Berlin’s storyline on many issues, not least that on the euro crisis, with national profligacy being the main cause rather than a half-baked currency union.
But she has also consolidated her power in the EU in other more tangible ways, with her nominees and close confidants in positions of executive power in the EU institutions — Commission, Council, and Parliament and in the ECB and other important funding areas.
While the big issue for the next few years will be to what extent the EU will put in place the elements missing from a safe, secure and proper common currency, the battle is likely to continue to be fought issue by issue. Germany will not wish to be responsible for anybody’s debts, irrespective of how or why they occurred, and so the elements of a banking union will remain as national as possible until the money is in place.
Merkel, like British PM David Cameron, is a critic of Brussels taking too much action — especially when it clashes with German interest, such as anything to do with vehicles. She has been able to slow or halt developments especially in relation to the euro by insisting it will require a change in treaty, and this too will be on the agenda for the next EU term, beginning middle of next year.
She needs treaty change if she is to remain in power in Germany without having to continuously strike power-draining deals with her MPs, the opposition, and even the constitutional court. Currently every decision by even the European Stability Fund has to be approved by the Bundestag — and only a change in the EU’s rules to answer the constitutional court’s criticisms is likely to change this.
The Socialists with their leader Peer Steinbruck — seen as something of a figure of fun — will warm the temperature of Germany’s reaction to EU events a little. Christine Krajewski, economic adviser to Mr Steinbruck, favours a haircut for Greek debt despite it meaning the EU bailout fund will lose money.
She also believes a redemption fund is required that would see debtor countries like Ireland having their loans pushed out for decades. But all parties are adamant that tax evasion must be ended — and that puts Ireland, the Netherlands, and Luxembourg in the firing line.
But, she points out, the EU and the euro crisis has not had a high profile in this election. The thing that will influence the vote most is the turnout. In 1998, 20m voted for the Socialists but when they were elected in 2009 with just 10m votes because of the drop in the numbers voting.
* The German system of electing representatives to the federal parliament, the Bundestag, is as complicated to the Irish as our proportional representation system is to the Germans.
The ballot paper is divided into two: On the left-hand side the voter chooses the political party they favour (just one vote), while on the right they can choose the candidates from their constituency.
Half the seats (299 of the 598) go to the candidates on the party list; the other half is a first past the post for named candidates.
Sometimes there are more people directly elected representing a party than the number of seats the party is entitled to have in the Bundestag — there were 22 of these in the outgoing parliament. This time around these will have to be balanced out with extra seats created to ensure the proper party balance is created.
A party must get 5% of the vote across the entire country, or more than three seats from the direct list, to enter parliament, a rule to exclude splinter parties for historical reasons.
There are 61.8m people eligible to vote in the country’s 16 lander or states. But you must hold a German passport which is not easy for the close to 20% with an immigrant background and which rises to 40% in Frankfurt and 25% in Berlin. About 10% are eligible to vote.
