Thursday, August 08, 2013

Merkel's empty election program

Wolfgang Münchau is using his weekly column to look at the election campaign proposals of German political parties leading up to next month's election.

He's previously argued that the Social Democrats (SPD) should have been able to make an issue out of German Chancellor Angela Merkel's disastrously bad handling of the euro crisis. But because of the SPD Chancellor candidate Peer Steinbrück's identification with those policies and with neoliberal economics in general, the SPD just can't make a credible case against Merkel on the euro crisis.

Münchau thinks that the SPD could use the controversy over NSA spying in Germany and Europe to call Merkel's leadership into question. She's showing the same poor judgment and "muddling through" approach that turned a Greek debt crisis in 2009 that could have been handled fairly easily into a full-blown existential crisis for the eurozone and the EU.

But Steinbrück is probably too feckless to even pull that off. In any case, it's pretty clear that his goal is to once again become a junior partner in a Grand Coalition with Merkel and her Christian Democrats (CDU/CSU). As Albrecht Müller points out in Rot-Rot-Grün als einzige Alternative an interview with Jörg Degenhardt on Deutschlandradio 07.08.2013, Steinbrück officially hopes for a red-green coalition with the Green Party. But given what current polls are showing and the weakness of the SPD's campaign, they aren't likely to have enough Bundestag seats after the election to make a red-green majority. The only way the SPD could reasonably expect to lead the next government would be in a "red-red-green" coalition of the SPD, the Left Party and the Greens. But Steinbrück is categorically ruling out the possibility of a coalition including the Left Party.

In Merkel ohne Wirtschaftsplan Spiegel Online 07.08.2013, Münchau looks at the CDU's platform. He isn't impressed. He notes that the CDU program offers only two themes, both of them favorites of Angie: "Wettbewerbsfähigkeit und geringere Staatsverschuldung" ("competitiveness and lower public debt"). For Merkel and the neoliberal conventional wisdom, "competitivess" means lower wages, reduced public services, fewer protections for workers, weaker unions and lower social insurance. Neither her neoliberal version of "competitiveness" or lower public debt in Germany will save the eurozone.

Münchau argues that the notion of national competitiveness is not a meaningful macroeconomic concept. "Sie kennt verschiedene Kategorien von Produktivität, der pro Zeiteinheit geleisteten Arbeit. Aber das Konzept der Wettbewerbsfähigkeit von Staaten kennt sie nicht." ("It [macro] knows different categories of productivity, the work that can be done per unit of time. But the concept of competitiveness for states it doesn't know.") Since Germany currently has a healthy trade balance, it would have to be considered "competitive" at the moment if the concept of national competitiveness has any real meaning.

In fact, as he notes, the present state of German economic prosperity is dependent on exports that are facilitated in a major way by the euro, whose exchange value is considerably lower than that of a separate German currency would be. If/when the euro as a currency disintegrates, Germany's "competitiveness" will quickly enter a different state.

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