When I listen to my colleagues or read the English papers, the general consensus is that the Germans don’t like the Euro and don’t want to fund Greece’s bail-outs anymore. Whilst you can hardly argue against this overall impression of German public opinion, the feed-through from that to the German political landscape hasn’t necessarily reflected that popular view. In Finland and the Netherlands, Eurosceptic sentiment has created opportunities for increased political mandates for populist right-wing parties which emphasise national interests over the European “project”. But that hasn’t been the German electoral trend.
The German federal state election results since 2010 reveal that German voters have made a considerable move to the left. In the chart below, we combined the vote share of the three main parties on the left of the political centre – Sozialdemokratische Partei Deutschlands (SPD), Die Grünen (Green Party) and Die Linke (The Left) – and added recent poll results for the Berlin election (18 September) and the general election trend. The combined vote share of these parties is in all elections above 50%, and even above 60% in Hamburg, Bremen, Mecklenburg-Vorpommern and Berlin. This signifies a clear shift in political sentiment, as the comparison with the previous election results shows.
There are three significant implications of these results. First of all, the centre-right coalition parties have lost the majority in Germany’s upper house (“Bundesrat”). That is, this body will have to achieve compromise across party lines until the next major federal state elections which are not due before 2013. As the Bundesrat is meant to vote on legislation regarding European Union affairs, it is not difficult to see that recent complaints about too little involvement in the EFSF reforms will lead to more consultation with the Social Democrats and the Greens. Given the coalition government’s recent struggle to find a common position in the Euro crisis, this might not reassure the markets of a strong and clearly unified German position.
Secondly, if voters were aiming at a strengthening of Eurosceptic voices, they will be disappointed in the future. The Social Democrats and the Greens tend to be in favour of European integration and were both strong supporters of the Euro when they were in government. Even The Left, who are less enthusiastic about the Eurozone, don’t fundamentally challenge Germany’s membership.
Finally, we should keep this recent electoral trend and those two implications in mind when we are debating whether Germany is going to leave the Eurozone or going to chuck anyone else out of the inner circle. I get the feeling that the pro-Euro political powerbase in Germany is often underestimated abroad.
Interesting points. Indeed,Germany’s membership of the Euro has given it a huge boost to its exports while many of its Eurozone rivals allowed their competitiveness to slip, Germany increased hers. If Germany were to reinstate the DM, I suspect it would soar to the point of crushing Germany’s export machine and do damage to the economy.
But I wonder do Germany’s voters understand that? Do they think it’s worth paying the price of keeping the Eurozone together as a basis of keeping their exports competitive?
The cost being fiscal union & Eurozone bonds, which would likely raise the cost of money domestically (ie dilute Germany’s creditworthiness), maybe even require higher taxes to basically bail-out countries, which have been profligate, and anyway even this might not work. It would be a gamble, which could end in an even bigger mess than the current one.
The Danes just elected a left wing, big spend, big tax, pro-immigration party:
http://www.guardian.co.uk/commentisfree/2011/sep/16/demark-thorning-schmidt-election-coalition
I am not an economist. I am a history buff. For the life of me I do not understand how austerity will solve the problem either. Austerity will also cause the German economy to contract. If the consuming countries in Europe have imposed austerity they will not have the money to spend on German goods.
What is needed is consistent standards throughout the EU member countries. You need retirement age to be the same, social programs the same. In Greece alot of people retire at 50 not all of them but most of them do. I watched a documentary on Greek social programs and they blame Germany because they held their wages to 7%, so Greece hands out 27% raises because they felt it was unfair.
Standards must be the same. I do not see a solution to their problems in the political areana until soverign countries give up soverignty so they can solve their problems. You have 17 countries basically doing their own thing. Taxpayers in other countries are starting to wake up to this and have had enough and I do not blame them. Why would I want to fund the retirement of a Greek that retires at 50 when I cannot retire until I am 67. Look at France they increased the retirement age two years and there was rioting in the streets.
They can continue to dump more and more money down the black hole, but until someone says enough is enough, the problems will just increase in size and scale until people will no longer pay these taxes and rioting begins.