The German election has failed to answer the European question. At the beginning of the year, every opinion poll predicted a humiliating defeat for Gerhard Schroeder and his SPD-led government. But, in the end, the German people split their votes and gave both main parties – the CDU and the SPD – 35 per cent each. However, the CDU won three more seats and so Angela Merkel became chancellor. But the SPD has gained more cabinet seats than the CDU, including the key posts of the finance, foreign and employment portfolios.
To a British politician, this may seem like an alliance against nature; like having Michael Howard, David Willetts, and Teresa May in a cabinet headed by a Labour prime minister. But such cohabitation is not unknown on the continent. It may work. In effect, the Germans, by a large majority of more than 80 per cent of the votes cast, supported economic reform programmes, but not on the snail’s pace basis of the former government and without embracing some of ultra-liberal proposals of the rightist opposition parties.
Merkel is a first in Europe. The first woman chancellor in German history. The first person who spent most of their life under communism to take charge of the biggest Atlantic economy outside America. The first chancellor in more than two decades who speaks fluent English. Can she do it? Can she tackle the endemic unemployment and slow growth which has bedevilled the German economy since 1990?
Many London-based commentators are already writing off the new German government.
Many of the statistics are on the side of the pessimists. Schroeder inherited 4 million unemployed from the former CDU chancellor, Helmut Kohl, and was unable to reduce this figure. The Germans have gone on a consumption strike. While German firms are record-breaking exporters, internal German demand is weak.
The SPD government was not helped by trade unions that defended the so-called German social model, even though in recent years it was spewing 1,000 trade union members every working day out of the labour market and out of trade union membership onto the dole queues.
German trade unions were über-intelligent in the long decades of rebuilding Germany, in helping to create the most advanced industrial workshop in the world outside Japan. But in 21st-century Germany, open to all the economic forces of post-communist Europe combined with a highly internationalised and mobile German capitalism, the old paradigm that in 1989 gave Germany unemployment of under 5 per cent, plus a 35 hour week and massive investment in the public sector, can no longer be sustained.
Some rightists hope that Merkel will be a Margaret Thatcher. Ordinary Germans hope she will be a Harry Potter, able, without too much pain, to magically bring about the return to growth and full employment. However, in government she will need the help of the SPD ministers who, if they can claim credit for any economic and job-creation measures, may be able to win the next election by themselves.
For this to happen, the SDP will need help from a German trade union movement that can restore dynamism to the labour market. Europe will not survive with a permanently weakened Germany. Britain’s biggest trading partner outside the US is Germany. French growth has been constantly held back by the enduring economic anorexia of Germany. The Poles have just elected a more nationalist, socially conservative president. If Poland has a strong, confident western neighbour able to soak up surplus Polish labour, and investing spare capital and capacity 100km east of Berlin, then Poland would have an easier European perspective.
Schadenfreude is one German word every English-speaker knows. Enjoying Germany’s discomfit since 1990, as the Kohl government failed to adapt to the needs of a re-united nation, has filled many a column in the London press. But a weak, unhappy and pessimistic Germany is no help to Britain. Europe needs a successful and prosperous Germany. Instead, we may be getting a Weimar-lite. There will be no answer to the European question until the Germans find an adequate response to their own problems.
The EU was constructed to wean the old, nation-first passions of Europe off the comforting nipples of populism, protectionism and power politics that constituted the default setting for much of its politics. Seeing the blue and yellow stars of the EU flag hanging alongside the German flag outside every public building in Germany, and outside every German embassy, is a reminder of how Europe has channelled much of its destructive history into a more positive direction. The Eurosceptics who want to see a Europe of nation-über-alles, in place of a strongly integrated and integrating Europe, should examine history. If the grand coalition headed by Angela Merkel fails to deliver, all of us will be weaker, and Europe will be a nastier place for the British.