It has been a persistent theme of politics in Europe over the last few years: wait until after the German elections. Want to renegotiate the terms of the Greek bailout? Make further moves towards a fiscal union? Even, as the joke goes, the small boy tugging at his father’s sleeve needing to go the toilet. You’ll have to wait until after the German elections.
But those elections have now happened. Angela Merkel has been re-elected chancellor, and the process of creating a new German government now begins. The next steps in fixing the problems of the eurozone can now be taken. Small boys across Europe will be relieved.
But will the next German government really be ready to take the necessary steps? Opinions fall into three broad camps.
First, there are the views of Wolfgang Schauble expressed in the Financial Times last week and attacked on this website here. The necessary steps have already been taken, he said, and it simply needs time for the structural reforms to work.
The second view is that more steps are needed. The banks of the eurozone are still financially shaky and might need more propping up; the economies of the Mediterranean countries are not recovering as quickly as some had hoped; the European Commission needs to lead a programme of investment in infrastructure for growth. These things are necessary and, now that the German voters have had their say, they can now be done. Some of them might be unpopular at first, hence the need for delay, but because they are needed, they are now politically possible and the new government will embark on them.
A coalition between Angela Merkel’s CDU/CSU and the social democratic SPD is the best way to ensure this: a small CDU/CSU absolute majority might have been in hock to some opposition-minded government backbenchers. David Cameron might have offered some useful advice.
The third view, which is my own, lacks confidence that the needs identified by the second group will actually be met. Perhaps a Spanish bank will examine its accounts more closely and hit bankruptcy before adequate new funds can be put in place. Perhaps the government of Portugal or Greece will collapse under the weight of public opposition to austerity. (It is not over, and in fact is getting even worse.) And what chance is there that the current crop of national government leaders are really ready to let the European Commission do what it was set up to do, rather than continually looking over its shoulder at the national capitals?
Andrew Marr’s documentary on the career of Angela Merkel broadcast on Saturday night concluded with a confident sense that she would do whatever was necessary to save the euro. The European Union was the guarantor of freedom, in the eyes of someone who grew up under communism, and she will not let it go. The film included excerpts from speeches in front of the Bundestag when she said as much.
But there are also plenty of occasions when she has made clear her objection to doing the things that would save the euro. Andrew Marr missed them out of his film. Public opinion does not change quickly of its own accord: while the Alternative für Deutschland, the explicitly anti-euro party, got a pleasingly small share of the vote, the prospect of increasing the financial exposure of the German taxpayer to south European economies has still not been broached openly.
The case for doing what needs to done still needs to be made, not least in Germany.