Friday 23 June 2017

Win puts Germany in the driving seat to help solve eurozone crisis

AnALYSIS

Thomas Molloy

Thomas Molloy

A DECADE ago, a general election in Germany did not even merit a headline on RTE's 'Six One' news. German politics was widely regarded as being as dull and reliable as a VW Golf.

Today, Germany's political system is a lot more colourful and a lot less predictable. The three parties which dominated German politics in the post-war era have been replaced by five parties as well as quirky movements such as the Pirate Party, which got more than 8pc of the seats from Berlin's three million voters in regional elections this month.

This has had the unfortunate effect of turning German politics into a circus, like the American variety.

We are all used to the idea of paralysis in the United States in the 12 months leading up to a presidential election, but Europeans are also slowly having to get used to a similar rhythm on this side of the Atlantic.

Germany's bumper crop of regional elections this year (seven so far) has been one of the reasons for Chancellor Angela Merkel's hesitant response to the eurozone crisis. The bad news is that this is a long-term trend. The good news is that a pause in the election cycle and Merkel's victory in the parliament yesterday means that she will now be free to concentrate on solving the crisis.

Many things were said before the vote to soothe nerves among the three parties that make up Merkel's coalition, but most of them can be slowly jettisoned in the weeks ahead -- just as the FG-Labour coalition here has successfully reneged on promises over Anglo's bondholders and other solemn election pledges prior to the general election.

Merkel will be helped by the fact that things are going pretty well in Germany right now.

Yesterday, unemployment fell to a 20-year low of 6.6pc. The public everywhere tends to be largely indifferent to economic and foreign policy when things are going well.

Yesterday's Bundestag vote, the relatively healthy economy and a pause in the endless round of regional elections now gives Merkel an opportunity to sort out Europe.

Her solutions won't be popular at home but history suggests that Merkel will almost certainly use this chance to bolster the rescue funds available to Europe and then allow a much-needed Greek default. This may be a little cynical but it is good news for Ireland and Europe.

Irish Independent

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