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    Friday, October 14, 2005

    Let's Ponder the New German Government

    Guardian smartie, Timothy Garton Ash, on the new German government:

    The good news is Angie. The bad news is her government. Unfortunately, the bad is likely to subvert the good. Even if this lady chancellor is made of iron, a messy, unstable coalition will ensure that her feet are stuck in clay. All Europe will keep limping as a result.

    But first, the good news. It's a very good thing that the Federal Republic of Germany will have a chancellor who is a woman and comes from east Germany. Both seemed unthinkable 20 years ago. Both are major steps towards a modern normality for Germany, no longer divided between east and west, nor between ruling men and serving women. . .

    The question is: what can she do? The German constitution gives the federal chancellor considerable powers to set the main lines of policy, and the practice, from the founding postwar chancellor Konrad Adenauer through to Gerhard Schröder, has been for chancellors to make full use of those powers. This has been called a Kanzlerdemokratie, a chancellor-democracy. But the constitution, and the federal political system as it has evolved, also places considerable checks on the chancellor - far more than on any British prime minister. Ironically, a political system designed, with its elaborate checks and balances, to prevent the emergence of another Adolf Hitler, is now helping to prevent the emergence of necessary reforms.

    The upper house, or Bundesrat, composed of representatives of the federal states, can restrain and even block government initiatives far more than the House of Lords. Since there are elections in several federal states every year, there's effectively no such thing as a "mid-term" period when a government can make unpopular but necessary reforms without the fear of being immediately punished at the polls. With proportional representation, the country always has coalition governments, which means more compromises. Never more so than when you have a so-called grand coalition between the two main opposing parties, with the Social Democrats actually having more cabinet seats than the Christian Democrats. Just imagine a Labour-Conservative coalition government, with foreign secretary Hilary Benn and chancellor of the exchequer Gordon Brown serving alongside home secretary David Davis under prime minister David Cameron.

    Fifteen years ago, as Germany was uniting and Angela Merkel was starting her political career, a perceptive observer wrote that the great test for the federal republic was whether its tradition of "change through consensus" could produce enough change. Looking at the outcome of this election, I fear the question is being answered: more consensus, less change. And many observers have a sneaking feeling that this is the answer much of the German electorate still feels most comfortable with, even though no one actually voted for it. Over the next few weeks we shall see what detailed understandings Christian and Social Democrats can reach, as they try to reconcile their starkly contrasting positions on taxes, healthcare and labour market reform. Don't hold your breath. . .

    As for German business, the country's larger companies have certainly made big changes over the past decade. They have internationalised aggressively. Several hold their board meetings in English. They are leaner, meaner, fitter. They have export performances that most British or US companies would die for. But they have done this, on the whole, by cutting jobs in Germany and creating new jobs in the Czech Republic, Poland, India or China. This has not done much to help Germany's more than 5 million unemployed. . .

    The market alone won't do it. It does need the German state to create the conditions in which German companies will create the jobs - at home and not abroad. This means changing labour laws, taxes, welfare contributions and the like. These are the things that an alliance with the free-marketeering Free Democrats would have encouraged, and that with the Social Democrats will slow down. This at a time when Germany faces a fierce double competition: regionally, from the low-wage, low-tax economies of central and eastern Europe, and globally, from Asia. Now more than ever, I suspect that what Germany does will be too little, too late.


    My (painfully underinformed) opinion is that Merkel will pull the German
    (and with it, at least to some degree, the EU's) economy to its feet because even the SDP folks who will end up so well-represented know that will be the measure of the coalition government's success. Will the world watch Germany enjoy an economic boom? No. But things like unemployment must be somewhat improved. And this will take some CDP conservatizing. There will be serious limits, but SDP members know that the situation is dire.

    Alan Hall in Berlin's Independent says, She squeezed into power by making a Faustian pact with her arch enemies and now Angela Merkel will have to live with the consequences.

    Wow- Faustian! Hall's shrillness is matched only by the constant comparisons between Angela Merkel and Margaret Thatcher:

    In The Globe and Mail,Jeffrey Simpson asks Can Germany's Joe Clark become its Maggie Thatcher?

    Germany needs forceful leadership. Europe needs forceful German leadership. Can Germany and Europe get that leadership from a rickety coalition government led by Germany's first female Chancellor, who might aspire to be Germany's Margaret Thatcher but whom the country's political elites consider unprepared for the tasks ahead? The omens are not encouraging -- but then, Angela Merkel has made a career, a bit like Jean Chrétien, by always being underestimated.

    If a woman who isn't wildly liberal does or says anything, we must compare her to Maggie Thatcher. Ugh. Merkel.is.not.Thatcher. Even if it's meant to be a compliment. And even if she shared Thatcher's political ideology, she wouldn't have the power to be Thatcher in the coalition government.

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