A more European Germany
After the elections, Berlin must strengthen its own economy to spur growth in the EU
Now that the campaign for the German elections on September 22 has started, one thing is eminently clear: Europe needs not only a European Germany, but a Germany that fully and emphatically accepts its role as the driving force of the continent’s economy.
It is true that in the second quarter Europe has emerged from the recession that plagued it for a year and a half, thanks largely to the comeback of Germany and France. But it is also true that this new growth is feeble and vulnerable to unforeseen setbacks; that the asymmetries between North and South are still growing; that the second recession registered since the Lehman Brothers crash in 2008 has lasted longer in the EU than in any other region of the world; and that while the US has bounced back almost to levels of well-being previous to the crisis, the EU has continued setting new lows.
All these adversities add up to a single conclusion: the intense and monolithic policy of austerity applied in the EU, due to the influence of Berlin, has not produced results even remotely comparable with those of other areas, particularly the US, though the latter enjoys many advantages — the dominance of the dollar and the confidence derived from its world hegemony — that distort any direct comparison.
The challenges that Angela Merkel or her successor must face are not limited to the orientation of the European economy
For these reasons, however much this improvement in circumstances serves to lighten pessimism, it cannot be used to justify the supposed desirability of the recipes that have been applied. What is in fact desirable for all Europeans is for the German electoral result to unblock matters of common and urgent interest, which have until now been more or less postponed, such as banking union and the aggravation of the Greek crisis.
These problems demand that the new power in Berlin be more inclined to a balanced mix of economic policies — that is, a mix which, without forgetting the need to balance public budgets, will also devote attention to economic reactivation by means of selective measures to stimulate growth.
A modification of economic policy may be arrived at along two political paths. Either the German government finally changes course on its own account (a difficult and chancy option) or it changes its coalition partner (as it seems that, in any case, there must be a coalition). The latter looks more promising in terms of coherence, particularly if a new Christian Democrat-Social Democrat alliance is forged.
Yet the challenges that Angela Merkel or her successor must face are not limited to the orientation of the European economy. They also, and perhaps primarily, concern the German one, long enmeshed in a model whose imperfections are beginning to be laid bare: by scanty internal demand; by mediocre rates of investment in infrastructure; by the aging of the population, which has been not been compensated by a more aggressive immigration policy; and by the rigidity of the services sector, which has long been awaiting a liberalization conceived in terms of more flexibility and dynamism. After all, the best way for Germany to stimulate the economy of the rest of Europe would be for it to stimulate its own.
