Thursday, August 11, 2005

Intelligence Brief: Germany

Drafted By: Federico Bordonaro

Elections in Germany are approaching, currently scheduled for September 18. A poll taken on August 3 confirms the trend from July: the Christian Democrats have a solid 42 percent majority. The Social Democrats (S.P.D.) -- who are currently in power -- remain stuck at 29 percent, whereas radical Left alliance Linksbuendnis (which is formed by the Electoral Alternative for Labor and Social Justice (W.A.S.G.) and the Party of Democratic Socialism (P.D.S.), which is now known as Linkspartei) is at 11 percent. [See: "Angela Merkel's Forecasted Win and Germany's Foreign Policy"]

However, on August 5, some high-profile independent lawyers, and experts from the German Federal Constitutional Court (Bundesverfassungsgericht) told the press that the Left has misused federal electoral laws because in some German states it is not clear whether voters of the Linksbuendnis would be voting for a P.D.S. or for a W.A.S.G. candidate. It is argued that this confusion has been created in order to get P.D.S. officials elected in western states where they normally receive very little support. Therefore, some German states could disallow the Linksbuendnis to take part in September's vote.

While the battle for federal acceptance of the Linksbuendnis has just started, the issue signals a serious political problem in Germany since traditional parties have not been able to effectively contrast the Left's electoral strategy.

The German Crisis and the Rise of W.A.S.G.

W.A.S.G. is without a doubt the most important political novelty of today's Germany. Launched by former Social Democrat minister Oskar Lafontaine and his leftist followers, W.A.S.G. has been able to successfully intercept S.P.D.'s disappointed voters. Social Democrat Prime Minister Gerhard Schroeder, elected in 1998, has tried in the last years to introduce market reforms in accordance to the wishes of German entrepreneurs, but the German social and political landscape has shown signs of severe unhappiness with his policies.

Trade unions, workers and parties from the Left judge the reforms too market-oriented and fear that the renowned German welfare state will be dismantled. On the contrary, liberal conservative movements and German capitalists believe the reforms were too weak and insufficient to tackle what German President Horst Koehler argued on July 22, that Germany faced "an unprecedented crisis" that needs the government to "pursue its agenda with full determination and energy."

As a result, the S.P.D.-led coalition experienced a dramatic decrease of support in the last four years, and Schroeder's ability to remain in power after 2002 is explained by some analysts as due to his steadfast opposition to the U.S.-led war in Iraq, which made it possible for the Social Democrat to keep the Left's votes in 2002. However, notwithstanding a new foreign policy, characterized by a strategic partnership with Russia, a strong commitment to refuse any involvement in the Iraq war, and an open dialogue with Washington in order to relaunch the transatlantic relationship, Schroeder's days in power seem to be nearing an end.

Germany's social system is nowadays widely perceived as unable to cope with the aggressive Anglo-Saxon neo-liberal model. In the post-bipolar geo-economy, statist policies based on public spending and labor market guarantees are often considered impossible to harmonize with companies' needs to compete globally. Moreover, the European Union -- of which Germany is the largest country, and one of its leading states -- has been built upon neo-liberal principles.

However, German wealth and an excellent welfare state are inextricably linked to the twentieth century's German "social market system" -- also known as "Rhine capitalism." Should such a model be dismantled -- in order to increase economic competitiveness -- it is fairly obvious that the social stability largely enjoyed by the country in the last 60 years would be extremely hard to maintain.

This context has witnessed an unexpected rise of the Linksbuendnis. Whereas P.D.S. has always remained strong in the eastern states, the W.A.S.G. has rapidly gained consensus in various states of the country, and not only in the poorer ones in the east. Lafontaine's strategy is to gather the votes of those German citizens who do not believe the welfare state is doomed to fail in the age of globalization. After the E.U.'s single currency introductions, Germany has fallen prey to recession and economic depression. Many Germans no longer believe that the euro -- and the European Union -- are without question in Berlin's interests.

As wages no longer progress like they did in the 1980s, and the E.U. is plagued by inner division and economic crisis, a significant part of the German population is skeptical about the classical Europeanist and moderately liberal policy advocated by both the C.D.U. and the S.P.D. (and their respective allies the Free Democratic Party (F.D.P.) and the Green Party).

Since in 2005 the new W.A.S.G. party rapidly found a strategic agreement with P.D.S. to create the Linksbuendnis, Christian Democrats and Social Democrats realized how dismal their situation looked. Hence, the current juridical issues are regarded by some observers as a C.D.U./S.P.D. maneuver to hamper the Left alliance's rise.

However, the general situation looks unsettled. W.A.S.G.'s leader Klaus Ernst announced on July 20 that his party does not rule out entering a coalition with the Social Democrats and the Greens in order to prevent the formation of a C.D.U.-C.S.U.-led government. Moreover, 39 percent of German citizens would accept a C.D.U./S.P.D. "Grand Coalition," according to a recent poll.

The Bottom Line

It is far from clear whether the Linksbuendnis will be able to compete in every German state. It is certain, though, that its struggle to resolve any juridical issues will be energetic and will have wide popular support. However, any policy designed to resolve the German economic crisis will be very difficult to bring about. The welfare state and the German social model have become a landmark of the German post-Nazi national identity.

However, the fundamental question will be that of the revitalization of the once near-perfect European economy -- either by a neo-liberal turn, or by a difficult (but desired by many) re-launch of a more traditionally German social market and welfare-oriented program.

Expect an Angela Merkel government, presumably allied with the F.D.P., to face steadfast opposition by a revitalized Left opposition, and to struggle with having to make unpopular decisions. Look for new crises to surface in a declining S.P.D., as its Leftist identity shifts toward the Linksbuendnis and its reformist agenda is carried on more decidedly by a conservative rule.



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