Friday, September 22, 2017

France and Germany on the Eve of the German Vote

My take for The American Prospect here.


bert said...

We'll see at the weekend, but current polls have the AfD coming third, if only just.,_2017
If there's another grand coalition that makes them the official opposition in parliament. Not necessarily a reason to throw a fit, but perhaps to be a bit less sanguine than you are in your piece.

Anonymous said...

A really excellent piece. I don't know if I would say that Merkel lacks a sense of tragedy: she is a woman of hidden depths, and she is almost completely inscrutable. In the areas where one might say she lacked vision (particularly when it came to the Euro-crisis and Germany's mistreatment of Greece), I suspect that she believes she was constrained to act as she did. I certainly think that Germany ought to have been more generous, and not only to Greece. However, I'm not persuaded that Merkel could have changed German policy in a meaningful way. It is Schäuble (and the vast majority of Germans) who takes a moralistic perspective on the state of the Eurozone and who blames southern nations for their debts. Merkel, I think, blames the current disfunction of the Eurozone on the people who designed it in the 90s (one of whom was Schäuble). Up until this she has seen these problems as impossible to fix (and perhaps as a price worth having paid for German unity), so she accepts them and mumbles. She is very capable of risky, decisive action when she feels that the moment calls for it: on nuclear power, on refugees and on sanctions against Russia.

What she does not have is the ability (absolutely necessary a French or American politician) to incarnate a certain vision of Germany's destiny. She always gives the impression that she is responding to circumstances that come her way, and she plays down the extent to which she or her country can shape these circumstances. On the crucial issue of the Eurozone, however, I do not think that the problem is a lack of leadership from the German Chancellery. The sort of fiscal integration that seems necessary from the French perspective is politically impossible for the Germans, and Angela Merkel couldn't deliver it if she were Konrad Adenauer and Willy Brandt rolled into one. Perhaps she will make another, final grand gesture in the direction of European unity in her last term. I doubt that it will be enough.

As Wolfgang Munchäu has pointed out (, this sleepy election will see 30% of the German electorate voting for eurosceptics parties (the FDP surely now qualifies as eurosceptic). What will happen in the next election, when the German economy may not be doing so well, and when a post-Merkel CDU/CSU feels more free to hunt for votes on the far-right? We will miss Merkel when she is gone, but France should not count on substantial concessions from Germany.

Geoffy4T said...

Excellent writing by Prof. Goldhammer, as usual. Thoroughly enjoyable and educating. And as usual, I have a couple of quibbles:

1) If this is indeed Merkel's last turn, she is likely getting out on top. German exporters, the engine of the nation's economy, are going to find the wind switching from their backs to their faces. The weak Euro that gave a discount to their goods when sold abroad is now likely going to strengthen, thanks to Trump's pressure to drive OUR currency down. At the same time, the jump in interest rates to offset such weakness was muffled by Mario "whatever it takes" Draghi [helped out by keeping Eurozone inflation low via Austerity.] German exporters, then, enjoyed the best of both worlds, denominating prices in a weak currency, while financing those activities at low interest rates. [Interestingly, Le Pen deserves some credit: the Euro's biggest drop occured when it appeared possible that she might win.]

2) The article correctly expands on Le Pen's incompetence as a campaigner [much like HRC in America,] which I believe is AT LEAST as big a reason for Macron's win as any finesse on his part. With her gone [and she IS gone,] we shall see if Jupiter [and Merkel, for that matter] will follow the template of George H.W. Bush in '92. The latter was polling over 80% approval after winning the Gulf War, only to lose months later to a political unknown. An election post-mortem talked of Bush's popularity as being "a mile wide and an inch deep," [the exact opposite of Trump.]

3) It is grossly premature to write the AfD's epitaph, "As a result, the threat of populist reaction in Germany has subsided, and the AfD is currently polling under 10 percent." The latest polls I've seen show them creeping UP, towards 12%.

Finally, we are once again focusing on Martinez's lip hair: is it something the Mustache SAID?

bernard said...

If I were Angela Merkel, I'd be planning on beating Helmut Kohl's longevity record (1982 to 1998). Why does everyone have to assume that this is the last time she runs?

As for Macron, I note that his popularity, which had sunk during summertime, has gone up by 5 points in September, the month where he started implementing in earnest his campaign promises: reform of labour laws (and promise of a massive increase in job training funds), reform of independent's social insurance, doubling of self-entrepreneur's threshold for simplified and discounted fiscal and social contribution obligations, reform of the "taxe d'habitation" etc. etc. Strangely enough, the man is actually implementing the program he ran on. It is not entirely impossible that the French are starting to notice that this politician says what he will do and does as he says. It might even be the case that this one reason why protests against the labour law reforms are less successful than they otherwise might be. You never know, people might be noticing facts.

Now, given that these are reforms that have not been "tried" before, it is entirely normal to reserve judgment on whether they will result into a structurally lower unemployment rate (the unemployment rate will go down anyway because the economy is booming at the moment). Fair enough.

I personally think that they will help some, but that a major reform - not just an expansion of funding - of the job training sector will be vital to a real success. The issue here is that the job training sector as it applies to unemployed people and job seeking youth is profoundly inefficient and riddled with fraudulous companies, in reality if not from a penal code point of view (and Pôle Emploi is a sad joke of an agency). This to my view may well decide the success or failure of Macron. So for now, we can only hope and wish him well.


In reality, Germany has a very large current account surplus against the rest of the Eurozone, so the weak Euro argument is just one small, incomplete aspect of the issue. The fundamental issue is that Germany is not investing and still saves a lot, so they are exporting a lot of their savings. Simple as that. If you believe in life-cycle savings theory (Schaüble does, me I am sure I will the day I am presented with scientific evidence), the current account should eventually recede in the future. And, who knows, Germany might invest in decent Autobahnen too...

On MLP, she is not just an incompetent campaigner, she is incompetent, period.