Monday, August 12, 2013

German election putters along, euro crisis continues

The German Parliamentary elections are six weeks away. The most lackluster campaign the Social Democrats (SPD) have probably ever run is coming to an end, one way or the other. The chance of SPD Chancellor candidate Peer Steinbrück making things considerably more lively and drastically changing the current prospects are, well, not totally impossible. It's just that the chances look vanishingly small at this point.

Current polling is showing the current coalition of Angela Merkel's Christian Democrats (CDU/CSU) and the Free Democrats (FDP) and the combined opposition parties - the SPD, the Greens and the Left Party - each are polling around 46%. (Koalitionen: Steinbrück hält Rot-Rot-Grün für möglich - irgendwann Spiegel Online 11.08.2013) The remaining 8% would be made up of undecideds and those supporting smaller parties, none of whom are likely to reach the 5% hurdle to be represented in the Budestag. The new anti-euro part Alternative für Deutschland (AfD) may draw significant numbers of votes from the CDU/CSU. Their results will be particularly interesting to see because of their anti-euro position and because they've become a vehicle for hard right sentiments.

But the opposition's 46% only counts if the possibility of a red-red-green coalition of the three parties is a live one. Gregor Gysi, the Left Party's Budestag coalition leader is pressing the SPD to recognize such a possibility, as Cordula Eubel und Matthias Meisner report in Gregor Gysi fordert "Riesenruck" von der SPD, um Rot-Rot-Grün möglich zu machen Tagespiegel Online 10.08.2013. But Steinbrück and SPD Party Chair Sigmar Gabriel are both flatly ruling it out for the fall.

The truth appears to be that both Merkel and Steinbrück would prefer to join together in another Grand Coalition of the CDU and the SPD. If the SPD showed any real sign that they would insist on a qualitatively different euro crisis policy to the current one, that might offer some hope for the eurozone and the EU. But especially with Steinbrück in the lead position, they can only be expected to continue Merkel's brutal austerity policies for southern Europe with continuing attempts to use minor fixes to muddle through each new acute turn in the crisis. It can only go on for so long.

The German Budnesbank is now warning that after the German elections, a new rescue plan for Greece will be necessary. (Markus Sievers, Die Eurokrise kommt wieder Frankfurter Rundschau 11.08.2013) The IMF has already been warning of the same. It's not a secret. It's just something that neither Merkel nor Steinbrück cares to talk about much during the campaign.

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