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Mainstream, VOL LI, No 40, September 21, 2013

Letter from Germany: Social Democrats Face a Tough Task in the Federal Elections

Sunday 22 September 2013

by Arani Basu

This article reached us sometime ago but could not be used earlier due to unavoidable reasons.

With federal elections round the corner, it is a matter of concern for the Social Democratic Party (SPD) and Christian Democratic Union (CDU) if the next government in Germany would be able to save the country from financial crisis—a malice gone viral all over Europe. Economically stability therefore is undoubtedly the biggest deciding factor when it comes to analysing this year’s federal elections in Germany. The Christian Democrats or Social Democrats? Will the people elect Angela Merkel for the third time in a row or give Peer Steinbrueck a chance? Who will ultimately win the September 22 elections? These questions loom large not only in Germany but also throughout the entire Euro-zone.

The question of who will lead Deutschland also interests the Indians. Political analysts in the country have already predicted a clean sweep by Angela Merkel and her coalition in the federal elections. Angela Merkel is known in India for her balanced and logical tactics in politics. In the past years, she has left her mark on the Indo-German partnership. She met Prime Minister Manmohan Singh on his visit to Berlin early this year (April 2013). The Indo-German bilateral trade had registered an increase of 18.4 per cent and reached 18.97 billion Euros in 2011 just before the massive economic slowdown gripped India.

According to Dr Detlef Briesen, a Professor of History and Journalism at the Justus-Liebig University, Giessen, Merkel’s high standing is also connected with the country’s decent economic growth in spite of the overall depressing economic scene in Europe. Germany as a nation in the Eurozone is doing fantastically well economically and is in a very good position. The Opposition does not throw a big challenge to her.

‘Angela Merkel has a good understanding of different viewpoints that help her identify the solutions. She is on the up and being the world’s most powerful woman, Merkel really goes down well with the Indians,’ says Vineet Thakur, a Research Scholar in International Relations at the Jawaharlal Nehru University, New Delhi.

Indeed, many in Germany say that it is the popularity of Chancellor Angela Merkel with which the Christian Democrats in the September elections 2013 will sail through. At the same time it is true that the country’s main Opposition party, the Social Democratic Party (SPD), is not overflowing and bursting with confidence about the upcoming federal elections. Some even said outright—they think they will not win the elections. The supporters of the SPD are campaigning more in hope than in expectation at this point in time. A section of the party workers were pinning their hopes on the large number of the electorate who still remain undecided on their selection of candidates.

There are quite a few issues which are standing between the Opposition and Angela Markel’s dream run to the Parliament House in Berlin and the most important factor is Merkel’s growing popularity. Not only the seniors, the new and young voters are tremendously in favour of her as well, as she runs for the third successive term for the Chancellor’s position.

Popularity of Dr Merkel

A recently conducted survey shows that in Germany over two of three people eligible to vote like her to be the leader of the country over the SPD’s Steinbrueck, her only rival. Only a meagre 29 per cent felt that Peer Steinbrueck will do better than Angela Merkel as the Chancellor of Germany. This was a talking point in a recent SDP rally in Berlin where the talk was not of clear dissatisfaction but rather of what should happen if the conservative Christian Democrats (CDU) and its partners emerged as the strongest grouping in the Bundestag. After the 2005 elections, the CDU and SPD formed a Right-Left ‘grand coalition’. Angela Merkel was the leader and Peer Steinbrueck was roped in as the Finance Minister. Now the core members of the SPD think that this ruined their chances in the coming elections and it was a wrong decision to join the government. The prevailing view among the campaigners this time is that this should be rejected— a victory or straight playing the role of the Opposition is all what they want at this point in time. They feel this is the only way they can do well in the coming days—and will be able to put more pressure on the government.

In fact the leader of the SDP, Peer Steinbrueck, has already ruled out participating in another grand coalition under Angela Merkel. His main associate, Frank-Walter Steinmeier, the leader of the SPD in Parliament, is also believed to be cynical about the same idea.

Tax Issues

Germany has a very strong and solid economic policy: on one hand, this enables it to run its budget in a solid way and on the other hand, it tackles the economic issues of the nation. But many think it is about time that Germany should address the problem of scarcity of skilled labour (which they have ignored for very long) and that such domestic issues would be the prime focus of the people of the country just before the elections. To them, this is far grave an issue than the crisis in the Euro-zone and may have far-reaching impact in the economy if ignored.

Also, a section of politicians are contemplating a rise in taxes. In a recently concluded event in Berlin, both the SPD and CDU agreed on what the election was about: tax rise. But at the same time they disagreed on the wisdom of taking such a step. The SPD has pledged to raise the top rate from 42 per cent to 49 per cent and reintroduce a wealth tax. Both the Social Democrats and environmentalist Greens want to follow France and impose new taxes on the wealthy to help reduce the national deficit. As of now, the Merkel Government has cleverly dodged the topic but proponents say this could bring an additional 11.5 billion euros into the public coffer each year. According to a very senior member of the SPD, ‘The only way we can earn more is through tax. We need more tax for sure. Around 10 per cent of the rich in Germany dodge tax and the government is very well aware of it. It is the rich who have to pay more and the wealth tax is needed.’

We know in France, the wealth tax featured as one of the biggest political platforms in François Hollande’s campaign to become the President. Now, calls are steadily growing in Germany to introduce the wealth tax in order to combat a national budget deficit that has swelled during the economic crisis. On paper, the wealth tax still exists in the country but it has not been applied since 1997. The debate over the re-introduction of the tax began in early August 2012—just a year before the September 2013 elections. The calls of different social organisations, unions and other groups for stiffer taxes for the wealthy have been met with strong resistance from Chancellor Angela Merkel’s government so far.

Euro Crisis

The entire Euro-zone is in deep trouble that has politically gripped the European neighbours and their economies like never before. As we have all observed, Chancellor Merkel has spent plentiful of her energy in the last four years coping with the Euro-zone cash crunch. So, naturally it is not altogether surprising that she is going for a focus which is soft in nature, given that the unpopular euro crisis has taken place more on the German television screens than on the city streets. Indeed there has been little talk of economic and European issues in the campaigns in Germany.

It is true that Dr Merkel has been much more concerned to highlight the positives in this campaign, emphasising things like a recent IMF report that christened Germany as an ‘anchor of stability’ in the Euro-zone. Growth forecasts for the current year and the coming years stand at 0.3 per cent and 1.3 per cent respectively, with much of the credit going to Bundesbank, considering its efforts to pull the Euro-zone out of its two-year recession. We know that Germany‘s export-driven economy has always been dependent on the health of its trading partners. Their future, according to the IMF, depends on an end to the uncertainty about the appetite for national reform coupled with an open-ended timeline for reforms to regulate Europe’s financial sector—the so-called banking union—and other reforms of the European economic and monetary union (EMU). The fate of Germany and its neighbours is increasingly becoming inseparable. According to a survey published in the month of August, voters in Germany are much more worried about the crisis that is omnipresent in the area than the election campaign.

In Germany today, about 49 per cent of the voters are concerned about the economic cost of the ongoing crisis. Around 54 per cent are worried about the cost to social cohesion while a whopping 89 per cent think their politicians are not telling them the truth about the Euro-zone crisis.

Bavarian State Elections: An Acid Test

The southern German state bordering Austria will have its state elections on September 15, 2013, a week before the federal elections. Many regard that the trend in Bavaria will be followed in the rest of Germany. Since 1958, the Christian Social Union (CSU) has been ruling the government, holding an absolute majority of votes in the ‘Landtag’ between 1966 and 2008. However, since 2008 the CSU has been in a coalition with the FDP. The CSU is a special case in German politics: it is an independent, liberal-conservative EPP member party which only competes in the Free State of Bavaria. The CSU is regarded as the sister party of the ruling CDU in Germany. All other parties are organised as federal parties with associations in all federal states. Only the CDU is not competing in Bavaria against the CSU. But in 2013, having already lost its majority last time, the CSU has to face a real opponent. During the last decades the SDP in Bavaria has been very far away from having a chance to win the election; now it has nominated the successful and popular Mayor of Munich, Christian Ude, to run against ‘Minister-president’ (Prime Minister) Horst Seehofer.

With 12.5 million people living in Bavaria, the state, which is home to engineering giant Siemens AG (SIE) and luxury car-maker Bayerische Motoren Werke AG (BMW), has more voters than in any of Germany’s 16 regions except North Rhine-Westphalia. Chancellor Merkel is keen to tap into that wellspring of potential support to keep away the challenge by the Social Democrats, the biggest Opposition party in the country. This mood was reflected in a recently conducted poll in the state and showed the support for the CSU was around 47 per cent—a significant increase from 2008 (43.4 per cent) and they are on the verge of reaching the magic figure which will give them the majority in the state. The same poll revealed a downslide of 0.6 per cent in the vote-share of the SDP in the state as they are set to receive around 18 per cent. One thing is for sure. Angela Merkel’s victory depends on a good result in Bavaria and considering things as of now, it seems the CSU will contribute a significant share to the federal vote.

Conclusion

Just under a month to go for the elections and the people seem to be fine and ignorant towards the glitches that their neighbours are facing in everyday life. From a distance and as an outsider, it seems that the Germans are living a life in the middle of a jerky ocean. The people of Deutschland do read newspapers or watch television and learn about the ‘Greek Tragedy’ but do they at all worry about it? Well, at least the signs are imminent and clear for now.

Whoever (the SDP or CDU) forms the next government in Germany, it would need to work in a manner which will bail out the debt-ridden nations as well as keep Germany away from financial crisis. Otherwise the beautiful, sweet life in Germany may come to a halt!

No one will be able to say that they had not been warned, that they had not seen the signs! 

Arani Basu is a Doctoral Candidate, International Graduate Centre for the Study of Culture, Justus-Liebig University, Giessen (Germany). He can be contacted at aranibasu.b@gmail.com

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