The loss of innocence

Yesterday’s three regional elections all had their national and regional stories to tell. The only real common denominator in all three states is the rise of the Alternative for Germany (AfD). In the end, the results of the three regional elections in Germany told many stories and had many different outcomes. And in fact, all traditional parties had some painful defeats but also some encouraging results. Angela Merkel’s CDU, for example, suffered strong losses in Rhineland Palatinate, but remained relatively stable in Baden Wuerttemberg and Saxony-Anhalt. Depending on the upcoming coalition negotiations, Merkel’s CDU could still manage to enter the government in all three regional states (up to now, the CDU was only represented in one out of the three governments). At the same time, the social-democratic junior coalition partner in the federal government, the SPD, suffered painful defeats in Saxony-Anhalt and Baden-Wurttemberg, but gained in Rhineland-Palatinate and came in as the strongest party. Finally, the Green Party celebrated a unique victory in Baden-Wurttemberg, being the strongest party for the first time ever in a regional state, but at the same time recorded disappointing results in the other two states. Not surprisingly, the only party which could enjoy strong gains in all three states was the AfD; at least for the time being Germany’s new anti-euro, anti-immigration party. While the AfD came in at lower double-digit numbers in Rhineland-Palatinate (around 12%) and Baden-Wuerttemberg (around 15% of all votes), it gained almost 25% of all votes in Saxony-Anhalt. As indicated by earlier polls, around three-fourths of all AfD voters favour the party to voice their own protest rather than due to better expertise or political platforms. In the coming days, coalition negotiations in all three states will start. At the same time, national politicians will try to draw their lessons from the elections for national topics and politics. However, the latter will not be that easy as the election results actually only have one common denominator: the emergence of the populist AfD. Furthermore, other interpretations like the elections were a protest vote against Angela Merkel’s stance in the refugee crisis are too short-sighted. The fact that Merkel’s CDU remained relatively stable in two states and that in Rhineland-Palatinate and Baden-Wuerttemberg two politicians, who actually stood closer to Merkel in the refugee crisis than many in her own party, suggests that the regional votes were not only on Merkel. In our view, the elections showed a general trend towards protest votes against the established parties. All in all, yesterday’s election results will not significantly alter Merkel’s stance in the refugee crisis. In fact, Merkel – very silently and gradually – has already adjusted the stance towards more stricter asylum and immigration rules. The results were not strong and clear enough to give Merkel’s critics in her own party enough ammunition to seriously consider a coup. To the contrary, Merkel could eventually get stronger again in the coming weeks; also because one of her potential successors, the CDU’s candidate in Rhineland-Palatinate Julia Klöckner, lost an election for the second time. Unless Finance Minister Schaeuble stands up, backed by the more conservative part of the party, to challenge Merkel’s position, it is hard to see an adequate crown prince or crown princess; at least not for the federal elections next year. While her own party should become less of a problem in the coming months, Merkel will be facing two other big challenges, stemming from yesterday’s elections: a politically embattled junior coalition partner and a more general trend in German politics, the rise of populism. The rise of the AfD will give spin doctors and masterminds the biggest headache. The rise could eventually make coalition building after the 2017-election very complicated. It is a rise, which also shows that Germany has caught up with all other European countries: it has finally lost its immunity against populist parties.

Column - Kanzler-in of Kanzler-raus?

Er broeit iets in Duitsland. Terwijl ik op de fiets op weg naar mijn werk in een Frankfurtse villawijk op het fietspad ‘Moslems raus’ zie staan, komt bondskanselier Merkel op tv haar beleid uitleggen. Normaal heel zuinig met tv-interviews, is dit Merkels tweede live-optreden in vijf maanden. Het maakt duidelijk dat de stormvlaggen in Berlijn gehesen zijn en dat men probeert schade te voorkomen. Dit is geen goedkope verkiezingstruc, maar een teken dat Merkel vecht voor haar politieke toekomst. Misschien te laat. Over ruim een week gaan de kiezers in drie Duitse deelstaten naar de stembus. Er kiezen 12,7 miljoen mensen nieuwe deelstaatregeringen. Zoals vaak bij Duitse regionale verkiezingen gaat het minder over regionale politiek en zijn de verkiezingen vooral een barometer voor de nationale politiek. Zeker nu, ruim een jaar voor de volgende nationale verkiezingen. Feitelijk staat er voor bondskanselier Merkel niet zo veel op het spel. Haar partij zit nu maar in één van de drie deelstaatregeringen. Vanuit de machtspolitiek is het neerwaartse risico dus beperkt. Maar het gaat om veel meer. De verkiezingen worden gezien als belangrijke graadmeter van Merkels vluchtelingenbeleid. Of dat beeld klopt of niet, maakt eigenlijk niet uit. Feit is dat de verkiezingen gevolgen zullen hebben. Voor de Duitse politiek in het algemeen en voor Angela Merkel in het bijzonder. Voor de Duitse politiek dreigt het einde van de voorspelbare republiek. De regionale verkiezingen, de opmars van de nationalistische Alternative für Deutschland en een mogelijk verder verlies van de sociaaldemocraten kunnen de opmaat zijn voor verdere verschuivingen in het Duitse politieke krachtenveld. Ook nationaal. Een verdere versplintering van het partijenstelsel. In het verleden was politiek in Duitsland redelijk simpel. Sociaaldemocraten of christendemocraten regeerden samen met hun natuurlijke juniorpartner: de liberalen, respectievelijk de groenen. En als dat niet mocht lukken, dan maar met elkaar in een grote coalitie. Als de opiniepeilingen uit de drie deelstaten kloppen, is dat verleden tijd. Coalities zullen uit minstens drie partijen bestaan, waarbij alle mogelijke combinaties worden opengehouden. Voor Merkel persoonlijk staat er veel op het spel. Haar tv-optreden toont dat zij, na haar Alleingang, eindelijk probeert breder begrip voor haar vluchtelingenbeleid te kweken. Het gevaar is echter dat dat te laat komt. Het rommelt in de coalitie met de SPD en in haar eigen partij. Ongenoegen dat alleen maar zal verdwijnen met grote overwinningen. En als de opiniepeilingen kloppen, ligt dat niet in het verschiet. Als Merkel politiek aan wil blijven, zullen we haar tot volgend jaar veel vaker live op de buis zien. Haar lot is min of meer verbonden aan het lot van de vluchtelingen: er in, of er uit. Deze column verscheen vandaag in het Belgische dagblad "De Tijd"

Column: Over Merkel, emoties en Waterloo

Angela Merkel is alom bekend als politieke overlevingskunstenaar. Haar doormodderen en strategisch overnemen van standpunten van de tegenstander is haar op verwijten van visieloosheid en draaikonten komen te staan. Niet de wens het klimaat te redden, maar wel de (bijna) kernsmelting in Fukushima en het aangewakkerde anti-nucleaire sentiment deden de bondskanselier plots van standpunt veranderen. Met deze geniale draai veegde zij in een keer het partijprogramma van de Groenen van tafel en maakte zij van Duitsland een voortrekkersland in energie. Duitsland sinds jaar en dag vrijwel het laatste land zonder wettelijk minimumloon? Merkel maakt er haar speerpunt van en haalt de socialisten links in. Over Merkels draaikonterij in de eurocrisis, van géén hulp tot een derde pakket voor Griekenland, is inmiddels ook al alles gezegd. Merkel is de Houdini van de Europese regeringsleiders, een boeienkoningin, die zich uit elke val weet te bevrijden. Zij is een meester in het aanvoelen van de publieke opinie, terwijl zij zelf nooit op emotie is betrapt. De vluchtelingencrisis heeft dit veranderd. De Duitsers laten nu een groot hart zien. Vluchtelingen worden ruimschoots opgenomen, juichend met dekens en knuffels ontvangen op treinstations en de bereidheid hen te helpen is groot. Tienduizenden vluchtelingen lopen op de snelweg in Hongarije, ‘Germany, Germany’ en ‘Merkel’ roepend. Kan Duitsland die toeloop aan? ‘Wir schaffen das’ (dat krijgen we voor elkaar), beweerde de bondskanselier stellig. Dat was een week geleden. Nu zijn de grenzen dicht, zijn de opvangkampen, sporthallen, stations en lege scholen overvol en luidt elke deelstaat de noodklok. En de opvangbereidheid in de andere EU-lidstaten laat te wensen over. De vluchteling-stroom en de hoop op een betere toekomst in ‘Germany’ zijn alleen maar groter geworden. Heeft de best geïnformeerde vrouw van het westelijk halfrond werkelijk niet voorzien dat de genereuze opname van de vluchtelingenstroom de poorten alleen maar verder zou openzetten en dat de voorzieningen in een week uitgeput zouden zijn? Dat er zicht is op een bevolkingsaanwas van 12,5 procent in één jaar? Licht hierop werpt nu - na sluiting van de grenzen en de vraag of Duitsland zich niet moet verontschuldigen vanwege de gastvrije ontvangst van de vluchtelingen - haar uitspraak ‘Dann ist das nicht mein Land’. Merkel toont emoties. De ironie van de geschiedenis is dat net nu Merkel eindelijk emoties laat zien, dit haar einde kan inluiden. Want Duitsers zijn vriendelijk en zullen helpen bij humanitaire nood, maar ook Duitsers willen niet naast een vluchtelingenopvanghuis wonen en sturen hun kinderen naar een witte school. De grenzen kraken en de publieke opinie en de eenheid binnen de christendemocraten vertonen al de eerste barsten. Elke leider vindt vroeg of laat zijn Waterloo. En wat is er mooier voor een christendemocrate dan ten onder te gaan aan barmhartigheid? Deae column verscheen vandaag in het Belgische dagblad "De Tijd"

Eurozone: Behind the scenes of Germany's "yes"

Today’s vote in the German parliament will no doubt bring a “yes” for the third Greek bailout package. While the outcome of the vote might not be spectacular, the details are clearly explosive. Greece and the ongoing negotiations have been the dominant topics for German politicians and common people over the entire summer. With today’s vote in the Bundestag, the German parliament could end these discussions; at least for the time being. To be precise: 631 German MPs have returned from their summer vacation to vote on the third bailout package for Greece. Chancellor Merkel’s government holds 504 seats and, moreover, at least one opposition party – the Greens (holding 63 seats) – already announced it would also vote in favour of a third Greek package. Consequently, anything else than an overwhelming “yes” vote would be a surprise. Nevertheless, today’s vote will be a test for Angela Merkel’s leadership. While opposition from other German parties against the new Greek bailout package has been rather muted, it is Merkel’s own party – the conservative CDU – which is still struggling with support for Greece. When the German parliament voted on the start of the official negotiations with the Tsipras government, 60 members of Merkel’s party voted against. In recent days, the “no” voters have received increasing media attention in Germany. According to reports, Merkel’s chief whip, Volker Kauder, had threatened possible dissidents that they would face consequences, like losing posts and positions in the party, in case they do not stick to the official party line. Against this background, all eyes will be on the exact number of “no” votes from Merkel’s own party today. A number higher than the earlier 60 would not immediately be a problem for Merkel. There simply is no crown prince or princess in her own party, neither are there any signs of a palace revolution. However, in the longer run, a growing number of dissident votes would clearly weaken Merkel’s position in the government and might eventually even reduce her appetite to run for a fourth term in office in the 2017 elections. On a more substantial point, the German government will continue having a hard time, even after today’s vote. It’s the role of the IMF in the third Greek bailout package. German politicians have frequently said that there would be no new package for Greece without IMF participation. At the same time, however, IMF participation would mean debt relief or even debt forgiveness for Greece. At least the latter is something, the same German politicians have been strongly opposing for a long while. How the German government wants to square this circle is still unclear. In our view and judging from last Friday’s Eurogroup statement, a face-saving compromise could be that initially IMF participation would be limited to technical assistance, monitoring and surveillance of the Greek reforms. Later, probably in October after a first successful assessment of the Greek measures and their implementation, the Eurogroup could decide on debt relief measures and then bring the IMF on board with additional financial assistance. Such a scenario seems to be backed by Friday’s Eurogroup statement which said that “in line with the Euro summit statement of 12 July, the Eurogroup stands ready to consider, if necessary, possible additional measures (possible longer grace and repayment periods) aiming at ensuring that Greece's gross financing needs remain at a sustainable level. These measures will be conditional upon full implementation of the measures agreed in the ESM programme and will be considered after the first positive completion of a programme review.” All in all, today’s vote might not be as interesting as another episode of “House of Cards” but it has at least the potential to provide some explosives, even Francis Underwood would pay attention to.

Helers of kwakzalvers?

In de top 100 van de beste economiefaculteiten ter wereld staan maar twee Duitse. Zijn de Duitsers niet goed in de economische leer? De Griekse saga toont dat dit soort rangschikkingen leuk artikelmateriaal vormt, maar dat de werkelijkheid anders is. Het Duitse economische beleid heeft uiteindelijk gezegevierd, ook zonder internationale academische waardering. Griekenland zal daar weinig vruchten van plukken. Als Tsipras echt iets in Europa wil veranderen, kan hij Angela Merkel en Wolfgang Schäuble beter op een zomercursus economie naar Londen of Milaan sturen. Dat is beter dan ministers van Financiën middelvingers op te laten steken of vuil spuiend in de media te verschijnen. Een blik op het akkoord met Griekenland laat de hand zien van de Duitse economische leer: het ordoliberalisme (of in het Duits: Ordnungspolitik). Deze leer staat voor structurele hervormingen als de enige weg naar geluk en economische groei. Helaas betekent het ordoliberalisme na jaren van recessie, massawerkloosheid en politieke instabiliteit in Griekenland ook nieuwe en langdurige problemen. De Duitse school ziet dat anders. De argumentatie is dat Tsipras door zijn stoere politiek het prille herstel van vorig jaar kapot heeft gemaakt. Dat is een denkfout. De groei van vorig jaar was niet het gevolg van succesvolle hervormingen, maar van kunstmatige groei. Het was het gevolg van Europees geld, dat altijd aan het einde van de Europese financieringsperiode (de laatste was van 2007 tot 2013) wordt uitbetaald. Dat gaf Griekenland een groei-effect van zo’n 2 procent van het bruto binnenlands product (bbp). De kunstmatige groei van afgelopen jaar maskeert een veel dramatischer beeld in Griekenland: de uitverkoop van het land, of voor economen, het sterke verval van de zogenaamde kapitaalstock. Kapitaalstock is de actuele waarde van alle productiecapaciteit van de Griekse economie. Die waarde is sinds 2010 met zo’n 8 procent gedaald. Zo’n afbraak van de productiecapaciteit zie je doorgaans alleen tijdens oorlogen of lange economische depressies. Interessant is dat van alle andere Europese probleemlanden alleen Portugal te maken heeft met een afbouw van productiecapaciteit (in mindere mate dan Griekenland). In Ierland en Spanje neemt de kapitaalstock weer toe. Het huidige akkoord met Griekenland is voor deze investeringsproblematiek erg dun. Europa en de Duitse school hopen nog steeds op de louterende kracht van hervormingen. Het geld uit het zogenaamde Juncker-plan bestaat uit al ingeplande EU-middelen, die met veel vertraging het land zullen bereiken. De 12,5 miljard euro die ooit uit een privatiseringsfonds van 50 miljard zal rollen is wishful thinking. Structurele hervormingen zijn absoluut nodig in Griekenland, maar de opbouw van de productiecapaciteit - lees inkomen en daarmee de belastingen - nog meer. Om politieke stabiliteit te krijgen en het Griekse volk én de niet-Grieken aan de kant van Europa te houden, zal de Duitse economische school zich verder moeten verdiepen. Wellicht stijgen de Duitse universiteiten dan ook in de rankings? Deze column verscheen vandaag in het Belgische dagblad "De Tijd"

Eurozone - Still united in diversity

The final stage of the Greek saga debuted along the lines of the recent past. Neither side seems in a hurry to bow to the counterparty’s requests. Having irritated EU Commission President Juncker late last week by quipping that the EU suggestions were irrational, on Tuesday the Greek PM Tsipras finally submitted his new proposal to the institutions. As reported by Kathimerini, it foresees an increase in the primary surplus targets to 0.75% of GDP (from 0.6%) for 2015 and to 1.75% (from 1.5%) in 2016 and an upward adjustment to its three-rates original proposal. The Commission’s first reaction was a cool one, focusing on the fact that the proposal contained ideas already rejected in the past rather than on the adjustments to the primary surplus targets and on the new VAT rates. Unsurprisingly, Greek Finance Minister Varoufakis was also dismissive as he defined last week’s creditor proposal a return back to square one, as if the negotiations had not happened. In our view, even if the manners and procedures of this never-ending process will definitely not win any beauty contest, just looking at the sheer facts it seems as if at least headline numbers and targets have converged again – a tiny bit. The issue is not so much numerical targets but rather how to reach them. This is where the biggest discrepancies between Greece and the rest of the Eurozone still exist. The other, probably most controversial issue is the Greek pension system. While the Eurozone demands an overhaul of the system to make it more sustainable, the Greek government refuses any changes. Even if both sides are still well apart, these discrepancies look bridgeable; at least in normal European circumstances. However, the Greek crisis has long ago entered new dimensions. Therefore, it looks as if an old negotiation pattern is currently emerging again: when progress at the technical level failed to materialise, the negotiation table is shifted to the top politicians. Looking at the key players, it seems as if we are reaching the final stage of the negotiations; at least for a short-term solution. After negotiations at the wider European level, including the IMF, it again seems to come down to another Greek-German showdown. These two government leaders will have to decide whether they can pour more water into their wine and still serve it at home as an exclusive drink and not as a cheap spritzer. In this light, observers were yesterday eagerly awaiting a meeting between Tsipras and Merkel at the margins of an EU-Latin America summit in Brussels. However, the two left main actors of the Greek crisis continued their game of chicken, now even at the level on whether or not a meeting would take place. After denials and opposing news, Tsipras and Merkel, supported by French president Hollande, finally met late last evening. After two hours, the meeting was concluded with only one official statement: government leaders had a good exchange of views in a constructive atmosphere. The negotiations between Greece and the three institutions will be continued with high intensity in the coming days. For us, it is hard to tell what really happened during yesterday’s meeting. It all looks as if the psychological game of who will blink first continues.

Column - The Sound of Merkel

Het was hèt plaatje van de G7-top in Duitsland. Angela Merkel in de bergen op de groene alpenweide met gespreide armen voor Barack Obama die ontspannen op een bank zit, of bijna hangt. Bijna een idyllisch tafereeltje uit 'The Sound of Music’. Angela Merkel als de hartverwarmende Maria van de internationale en Duitse politiek. Een Maria echter die vooral opleeft in de bergen en op het platteland, maar niet in de stad. In de schaduw van de G7 en Griekenland was er afgelopen weekend in Dresden een kleine, voor buitenlanders en financiële markten op het eerste gezicht tamelijk onbelangrijke burgemeestersverkiezing. In de hoofdstad van de conservatieve deelstaat Saksen leed de kandidaat van Merkels CDU een pijnlijke nederlaag. Hij haalde slechts 15 procent van de stemmen. Wat kan het de koningin van Europa, de sirtaki dansend voor de Amerikaanse president, nog schelen wat er in een Duitse stad van 500.000 inwoners gebeurt? De nederlaag in Dresden markeert het dieptepunt van een lange, treurige trend. In geen enkele grote Duitse stad zit er nog een partijlid van Merkel aan het stuur. In 2005, aan het begin van haar kanselierschap, zat de CDU nog in 7 van de grootste 15 Duitse steden stevig in het zadel. Ondanks enkele inhoudelijke veranderingen onder het leiderschap van Merkel lukt het de CDU niet aansluiting te krijgen bij de moderne grote steden. Het familiebeeld is weliswaar iets liberaler geworden, maar het blijft nog te conservatief, te veel ruikend naar mottenballen. Er ontbreekt een typische CDU-stempel op het urbane leven. Een echt alternatief voor de fietspad- en patchwork-familie-politiek van andere partijen heeft de CDU niet. Op het stedelijke niveau wordt zo het grootste probleem van de Duitse christendemocraten duidelijk: in het tiende jaar van bondskanselier Merkel is de partij inhoudelijk geïmplodeerd, met weinig geprofileerde mensen. De partij is Merkel, en Merkel is de partij. Het fenomeen Mutti kan voor de CDU nog een nachtmerrie worden. Op een einde van het Merkel-tijdperk is de partij niet voorbereid. En met de steeds toenemende urbanisering in Duitsland zal ook de invloed van het platteland, waar de CDU nog sterk staat, op de nationale politiek steeds kleiner worden. Voor Angela daarentegen maakt dat alles niets meer uit. Zolang haar populariteit bij de Duitsers zo hoog blijft, is zij het laatste houvast voor haar partij. De machtsgarantie. Bij elke nederlaag op regionaal of stedelijk niveau zal haar macht eerder toenemen dan afnemen. Want er is geen alternatief. Zo krijgt Merkel volgens mij ook later nog een nieuw reddingspakket voor Griekenland door het Duitse parlement. Internationaal zal Merkel verder de toon aangeven en elke berg beklimmen. Haar eigen partij wacht evenwel geen hemelse muziek maar rollende donder zodra Angela uitbarst in de klassieker ‘So long, farewell’. Deze column verscheen vanochtend in het Belgische dagblad "De Tijd"

Merkel, growth, Greece and TGEFKAT

The German economy ended a volatile year on a very strong note. According to the statistical office’s first official estimate, the economy grew by 0.7 % QoQ in the final quarter of 2014. This is more than the first estimate for the annual growth number had suggested. Compared with the last quarter of 2013, the economy grew by 1.6%. Details of 4Q GDP will only be published at the end of the month but available monthly indicators and the statistical office’s statement suggest that domestic demand was the main growth driver. A clear sign that lower oil prices have found their way into consumers’ pockets. Looking ahead, the German economy looks set to continue surfing on a wave of economic well-being. With the strong labour market, wage increases, low energy prices and extremely low interest rates, consumers should continue to spend it. At the same time, the weak euro will definitely benefit German exports, letting them return as a growth engine. With a statistical overhang of 0.5%, less public holidays and the external stimulus package our current GDP growth forecast of 1.5% for 2015 looks almost pessimistic. The big unknown for 2015 remains domestic investment. While low interest rates and comfortable liquidity positions of many corporates should normally bode well for investment, uncertainty about the future of the Eurozone and continued geopolitical tensions could still dampen investment growth in 2015. While the German economy is doing what it is supposed to do (ie growing), the German government can concentrate on the conflict with Greece. After the disappointing Eurogroup meeting, hopes on a compromise had received a clear hit. However, yesterday evening at the European leaders’ meeting in Brussels, comments from German chancellor Merkel surprisingly opened the door for Greece. Merkel signaled German willingness to compromise, stressing the importance of rules and being a reliable partner in Europe. Combined with German media reports and official statements, the German government could eventually become flexible on the primary surplus target for Greece and conditions of the planned privatisiation. However, red lines the German government is not willing to cross are clearly debt forgiveness, supervision and credible commitments. This means that Greece would have to swallow some bitter pills like an extension of the current bailout programme and cooperation with the Troika. In this context, it does not surprise that German media yesterday night reported that a group of experts from the three institutions formerly known as The Troika will investigate possible overlaps between the current bailout programme and the wishlist of the new Greek government in the coming days. Whether Merkel’s comments are really a substantial change in the Eurozone’s negotiation chaos and an invitation to compromise or just a precautionary measure so that she cannot be blamed if things go completely wrong, remains to be seen. One thing is at least for sure: with Merkel’s moves, the pressure is now on Greece.

And finally...Merkel's third term in office

Almost three months after the federal elections, Angela Merkel can officially begin her third term in office on Tuesday. It was an exciting news weekend in Germany. The grand coalition has finally received the green light from the SPD grassroots. According to the SPD, 76% of its grassroots members taking part in a postal ballot voted in favour of joining a coalition with the Christian-democrats. Almost 80% of all SPD members participated in the vote. After this final green light, the new government will officially be sworn in on Tuesday and can finally start work. Yesterday evening, all government parties named their ministers. The most interesting nominations are another term as finance minister for Wolfgang Schaeuble; the first-ever cabinet member with Turkish origin, Aydan Özoğuz, as Under Secretary for immigration, refugees and integration; the first-ever female defence minister, Ursula von der Leyen and, finally, Jörg Asmussen’s nomination as new Under Secretary in the labour ministry. The move from ECB executive board member Jörg Asmussen came as a big surprise. With Asmussen’s exit, out of all German members of the ECB’s Governing Council, only Otmar Issing has ended his official term. The other four – Welteke, Stark, Weber and Asmussen – all left earlier (due to different reasons). It seems as if Asmussen’s move to Berlin is not driven by any monetary policy conflicts but rather by his private life. With Asmussen’s exit, the ECB will lose an important connection to both the German government and the German public. In the public debate on the ECB’s monetary policy, Asmussen has been an important counterweight to Bundesbank president Weidmann. Although legally speaking no single country has a permanent seat in the ECB’s executive board, it seems impossible that Asmussen will not be replaced by another German. Yesterday, three names were already being mentioned: current Bundesbank vicepresident Lautenschläger, chief financial supervisor König and a member of the Council of Economic Advisers, Buch. Interestingly, all three possible candidates are women. European heads of state are responsible for the nomination. In our view, the nomination could take until the next Spring summit of European leaders. In theory, other countries could also put forward a candidate for the succession of Asmussen but this looks highly unlikely. Back to the new German government. The nomination of all ministers shows that two of the most important policy topics for the coming years will be highly influenced by the social-democrats: the introduction of a minimum wage and the energy transition. The social democrats received the ministries for labour and a new “super-ministry” combining the economy and energy. Angela Merkel as chancellor and Wolfgang Schäuble as finance will remain in the driving seat of the other well-known “hot topics: fiscal and European policies, including the Eurozone crisis management. All in all, the composition of the next German government shows that the socialdemocrats have negotiated well. The next government will be a coalition of two parties almost at eye level. Some might see this as a problem as it does not fully reflect the results of the elections. In our view, however, this distribution of power could eventually turn out to be a blessing, at least if it leads to a more stable coalition.

Germany (almost) has a new government

Germany is preparing for a grand coalition. After weeks of negotiations, the parties agreed on a coalition deal. Now, the SPD members will have to give the final green light. More than two months after the elections, Germany finally has a coalition deal. Early yesterday morning, the two Christian-democratic parties (CDU and CSU) and the socialdemocratic SPD reached a final coalition deal. The final deal is a 185-page package with lots of good descriptive analysis but also many meaningless words. Stripping down the coalition deal to the essentials, a couple of tangible issues and measures remain. The most remarkable measures are probably the introduction of a minimum wage of €8.50 starting in 2015 but with a transition period until 2017, the reduction of the retirement age to 63 years for persons with a work life of more than 45 years, a pension increase for mothers with children born before 1992, a principal agreement on a highway toll and changes to dual citizenships. In addition, the coalition deal includes several expenditure increases to build or renovate schools and childcare facilities, to modernize highways and to reintegrate long-term unemployed but also higher expenditures into development aid. These measures could amount to around €40bn (1.6% GDP). Interestingly, the coalition partners want to finance these additional expenditures without tax increases. In fact, the goal of a balanced fiscal balance remains unchanged. These calculations might work at the current juncture with strong economic growth and record high tax revenues. However, it is doubtful that the new expenditure plans could survive an economic downturn without higher taxes and/or increasing the fiscal deficit. While the announced measures for the domestic economy clearly reflect a socialdemocratic stamp combined with several presents, Germany’s European and Eurozone policies will not change with the new coalition. The coalition deal confirms the well-known approach of solidarity against solidity, meaning weaker Eurozone countries can be rescued but only if they implement structural reforms. Moreover, the coalition deal underlined Germany’s “no” to debt mutualisation, common Eurobonds, a debt redemption fund and a common deposit guarantee scheme. Fiscal consolidation will also remain a red thread. As regards to further Eurozone integration, the coalition deal remains rather vague. The big vision thing is still missing. Instead, the new government looks set to pursue the idea of reform contracts to create additional incentives for structural reforms, will push to exclude costs of future bank recapitalisations from fiscal deficit calculations and will rather slow down than accelerate the speed towards a banking union. Interestingly, the new coalition seems to add a new condition to direct bank recapitalisation through the ESM. The EU summit in the summer of 2012 agreed to allow for direct ESM bank recapitalization (after a bail-in cascade and national contributions) once the ECB has taken up its new role as bank supervisor in late-2014. The new German coalition only wants to agree to direct bank recapitalisation once the Eurozone has also agreed on a bank resolution mechanism. While Germany continues to commit to further Eurozone integration, it remains striking that every time concrete steps and measures have to be taken, it is often Germany which slows down the process. All in all, the coalition deal is what it was expected to be: a compromise. Whether the coalition will last, now depends on the ballot of SPD members, with the results expected in mid-December. As regards to the economic aspects of the coalition deal, it looks as if the new government’s focus is on redistributing the harvest of earlier economic reforms, rather than using the economic good times for new structural reforms. The short-term impact on the economy should be positive. However, in the longer term, the coalition deal could turn out to have been a missed opportunity.

German labour market remains source of stability

Source of stability. German unemployment dropped by a non-seasonally adjusted 47,800 in October, bringing the total number of unemployed to 2.801 million, the lowest level since November 2012. In seasonally-adjusted terms, unemployment increased by 2,000, leaving the seasonally-adjusted unemployment rate unchanged at 6.9%. The Fall revival of the German labour market turned out to be slightly softer than normal. However, with these numbers, the German labour market still remains an important growth driver. Record high employment combined with yet another increase in real wages (+1% YoY since the beginning of the year) bodes well for private consumption. And, indeed, retail sales and new car registrations in the first two months of 3Q confirm continued consumption growth. Nevertheless, today’s numbers should not deviate from the fact that the German labour market has probably reached its natural level of unemployment. The de facto stagnation of both unemployment and employment rates since the beginning of the year sends a clear signal. The impact from ageing, with the baby boomer generation leaving the labour market, and immigration could become the most important drivers of unemployment rates in the coming year. Moreover, there is another element which could affect the labour market significantly: the current coalition negotiations on a minimum wage. The social-democrats have presented a nation-wide minimum wage of 8.50 per hour as a demand they will not let go. The impact of such a minimum wage on the German labour market is controversial. Opponents of minimum wages argue that they hurt jobs, supporters say that they combat exploitation and social inequality. Even historical evidence from other countries is not straight forward but provides arguments for both opponents and supporters. Economics is not an exact science. Therefore, the proof will simply be in the eating. In the short run, a minimum wage would not only increase the lowest wages but probably also wages currently (slightly) above 8.50 per hour. Households’ purchasing power could temporarily increase. To some extent, a minimum wage in Germany would mark the end of a long journey which started with the labour market reforms in the early-2000s. After the introduction of a minimum wage, it will be hard to squeeze additional positive effects out of the labour market. To continue the current job market miracle or start a new one, a minimum wage should be flanked by additional measures to create new jobs. Even children know that only redistributing the pie eventually leads to an empty plate.

Let the negotiations finally begin

This week, the official coalition talks between Angela Merkel’s CDU and the social-democratic SPD can finally start. It probably did not need any phone calls from other Eurozone leaders, but finally, three weeks after the elections, official coalition talks in Germany will start this week. Two weeks of so-called exploratory talks had limited the options for Angela Merkel to one: the social-democratic SPD. It does not seem to be love at first sight, but on Friday both parties, CDU and SPD, announced that they were ready for official coalition talks. Yesterday, the SPD party convention gave the final green light. The SPD convention’s “yes” was sweetened by the party leaders’ list of key demands of Angela Merkel. These demands include (i) the introduction of a nationwide minimum wage of €8.50, (ii) equal pay for men and women, (iii) a financial transaction tax, (iv) more investment in infrastructure and education, (v) a strategy to boost growth and employment in the Eurozone, (vi) equal pensions for seniors in the former West and East Germany, (vii) the ability to have dual citizenship, (viii) measures to make it easier to combine work with family life, (ix) a cap on rents and (x) stricter penalties for tax evaders. In our view, these demands should hardly have the potential to derail the upcoming coalition talks. On some issues, like for example the minimum wage, the CDU had already moved towards the SPD’s position in recent days. Other issues have been phrased rather vaguely, opening the door for compromises. More controversial issues like the call for tax increases have been dropped. Once a coalition deal is struck, the SPD is still set to seek final approval in a poll of its grassroots members. The negotiations might not even be the biggest challenge, at least not for the SPD.

Historical night with Queen Mutti

The rather dull election campaign ended with a big bang and an election evening which made history. The German elections turned out to be unexpectedly nail-biting. As expected, it was already clear with the first exit polls at 6pm CET that Angela Merkel’s CDU would become the biggest party. In fact, Merkel reversed the outcomes of the past two elections, in which she did not manage to sustain the opinion poll results on Election Day, and led her party to its best result in 20 years. Moreover, last night offered a couple of other historical moments. Merkel’s junior coalition partner, the liberal FDP, missed the 5% threshold and will for the first time ever have no seat in parliament. At the same time, the anti-euro party, the Alternative for Germany, had an impressive performance, gaining 4.7% of all votes. At the beginning of the evening, an absolute majority for Angela Merkel seemed possible. With the official preliminary result, however, the next government can only be a grand coalition of CDU and SPD or CDU and Greens. The theoretically possible option of SPD, Greens and Linke has repeatedly been ruled out by both the SPD and Greens, and again last night. The other theoretical option, new elections, is also very unlikely in Germany. All of this means that the Germans will very likely get the coalition they have been looking for, at least according to latest surveys. This is a so-called CDU and SPD grand coalition. It is in fact the only realistically possible combination. Negotiations, however, will not be easy. The next government has a unique opportunity to use the current economic good times to ensure Germany’s leading position beyond current growth success. For a long while, Germany has benefited from the earlier reforms of the mid-2000s under former chancellor Schröder and, quite paradoxically, fiscal stimulus during the first part of the financial crisis under Merkel’s first government. Examples of this include car scrap schemes and subsidised short-term work schemes. In recent years, zealousness for reform has clearly slowed down. Therefore, it does not come as a real surprise that in OECD studies Germany often stands at the bottom of the list when it comes to newly implemented reforms. In our view, the biggest challenges for any new German government are to ensure that the economy remains the powerhouse of the Eurozone and can keep its leading position in world markets. To this end, the economic good times should be used to tackle important policy issues such as ageing and pension, investment and innovation, the final shift to renewable energies, and Europe. Germany is still amongst the fastest ageing economies of all European countries. Despite earlier reforms and increased retirement ages, the pension and health care systems are still under pressure. There is a lack of qualified workers in the health and elderly care sector and there have been recent discussions on civil servant pensions. Moreover, the new German government should not be complacent and should use the still-good economic times to invest in the future. Over the last decade, Germany has created a widening investment gap, both for public and private investments. Possible areas for investments are, for example, infrastructure (railways, highways), the expansion of broadband networks, and also energy transformation (including storage systems and smart grids). Energy transformation as such will of course also require significant attention. The shift from nuclear power to renewable energies is far from being finalised. In the short term, a possible coalition of CDU and SPD would clearly have to deal with campaign differences on whether to increase or cut taxes and what kind of minimum wage the country needs. Beyond these issues, however, a grand coalition would have a broad base in parliament, and, equally important, in the Upper House (Bundesrat) to bring forward necessary investment projects, further reforms of the pension system and next steps towards further Eurozone integration. For the Eurozone, a grand coalition would probably continue the current crisis management but with a softer hand. Eurobonds are unlikely but some new European investment initiatives and a soft push towards hidden burden sharing could be the result of a grand coalition. Even a kind of redemption fund, a Eurozone bank resolution fund and far-reaching integration could eventually enter the Eurozone’s centre stage with a grand coalition. All in all, a dull election campaign ended with a big bang and an election evening which made history. Germany has not become a political monarchy but Queen Mutti remains the undisputed political leader.

Gapend over de finish

Gapend hang ik over mijn eigen column. De Duitse verkiezingen zijn zo saai als de wedstrijd van Die Mannschaft tegen de Faeröer-eilanden. Alles is eigenlijk wel tot op het bot geanalyseerd en ongeïnspireerde campagnes laten heel Duitsland langzaam indommelen. Toch zegt mijn buikgevoel dat het eindspel spannend zal worden. 

 Verkiezingen in tijden van een goed draaiende economie zijn bijna nooit opwindend en de campagnetijd in Duitsland is behoorlijk saai. De enige grote thema's waar de twee kanshebbers op het kanselierschap zich echt onderscheiden zijn het wel of niet invoeren van een minimumloon en de verlaging of verhoging van de belastingen. Andere thema's, zoals Europa, komen nauwelijks ter sprake of blijven bij de meeste Duitsers niet hangen. 

 Otto Normalverbraucher ligt dus niet wakker van de verkiezingen. Merkel wel. Niettegenstaande zij volgens de peilingen nog steeds ruim voorligt op haar tegenstander Peer Steinbrück (SPD), is er een kentering zichtbaar. Gedoodverfde winnaars in peilingen krijgen tegen het einde van campagnes altijd te maken met kiezersmoeheid. Volgens mij zijn er minstens drie redenen waarom de verkiezingsuitslag op 22 september nog veel mensen zou kunnen verrassen: Beieren, het televisieduel en het verleden.   

Wat veel niet-Duitsers niet weten, is dat er aanstaande zondag al wordt gestemd in Beieren, waar de nieuwe deelstaatregering moet worden gekozen. Merkel kan in Beieren eigenlijk alleen maar verliezen. Op dit moment lijkt het erop dat de CSU, de Beierse zusterpartij van Merkels CDU, de volstrekte meerderheid haalt en de liberale FDP de kiesdrempel van 5 procent niet haalt. Goed nieuws voor Merkel, zou je denken. Maar neen. Zo'n uitslag wiegt Merkel-stemmers nog verder in slaap - aangezien hun stem niet meer nodig lijkt voor de overwinning - en duwt strategische kiezers mogelijk naar de FDP. Een onverwacht goed resultaat voor de SPD geeft Steinbrück een beslissend duwtje in de rug. 

 Sinds het grote televisieduel tussen Merkel en Steinbrück ruim een week geleden is er een eigenaardige sfeer ontstaan in Duitsland. Er zijn kleine tekenen van een kentering. Terwijl Angela Merkel recentelijk nog de onaantastbare regentes van Duitsland was, zijn er nu meer en meer stemmen en publicaties met een duidelijk kritischer toon. De terughoudende en soms aarzelende stijl van Merkel wordt ineens openlijk aangevallen. Misschien is het alleen een stormpje in de media om de kijkcijfers op te krikken. Maar misschien is het toch meer.

 Een blik op de geschiedenis laat zien dat Merkels CDU sinds 1998 in de verkiezingsnacht nooit zo veel stemmen haalde als een maand ervoor werd voorspeld in de peilingen. Het onbesliste televisiedebat heeft bij de oppositie de hoop aangewakkerd dat de geschiedenis zich herhaalt. 

 Die Mannschaft heeft dinsdag met ongeïnspireerd spel nog ruim gewonnen en gaat gapend richting WK. Merkel haalt de overwinning zeer waarschijnlijk ook, maar met meer angstzweet dan verwacht. 

  Deze column verscheen vandaag in het Belgische dagblad "De Tijd"

Industrial production points to strong growth comeback of German economy

Impressive comeback. The German economy is on a good way towards an impressive growth comeback in the second quarter. Industrial production increased by 2.4% MoM in June, after an 0.8% MoM drop in May. The increase in production was broadly-based across all sectors. Production in the construction sector increased by 1.6% MoM. Compared with 1Q 13, industrial production was up by 3.4% in 2Q.
 
Slowly but surely industrial activity has returned as an important growth driver for the German economy. Since the turn of the year, inventories have remained rather stable, while new orders have gradually picked up. Moreover, the construction sector has staged – the expected – comeback after the harsh winter. Yesterday’s new order data confirmed that the industrial engine will not run out of fuel any time soon. A monthly increase by almost 4% was rather impressive. In fact, improving new orders is not a one-off.  Order books have gradually thickened over the last six months with a quarterly increase of 0.5% QoQ in 1Q 13 and 1.2% QoQ in 2Q.

It looks as if the German economy is again walking on two feet: solid private consumption and strengthening industrial activity. Looking ahead, the biggest short- and medium-term risks for the German economy seem to stem from a further softening of economic activity in emerging economies, above all China, and a longer-lasting economic slump in Germany’s main trading partner: France.

Moreover, another pressing issue for the German economy is weak domestic investment. Yesterday, in its latest Article IV report, the IMF linked weak domestic investment to the euro crisis and falling German exports to Eurozone peers. In our view, there is more to German investment weakness than the euro crisis. In fact, weak domestic investment is not only a recent phenomenon but has been accompanying the German economy for much longer, driven by a preference for foreign rather than domestic investments in the private sector and a significant reduction of public investments. One way or the other, the next German government will have to address the issue of domestic investment to ensure Germany’s leading economic role.

With this week’s data a long rollercoaster ride of the German economy is coming to an end. Since the start of the year, German macro data has been highly erratic. Harsh and persistent winter weather, early Eastern, public holidays and vacation frequently blurred the data and required an extra portion of gut feelings to look through short-term fluctuations. The month of June was the first noise-free month; the month of truth. Data released so far has been very promising, sending two messages: i) the German economy should have staged an impressive growth comeback in the second quarter (with growth somewhere between 0.6% and 0.8% QoQ); and ii) such a comeback could be sufficient to have pushed the entire Eurozone out of the recession.

July ZEW sends mixed message

No further guidance. Today’s ZEW index has something for everyone. The ZEW index which measures investors’ confidence dropped unexpectedly to 36.3 in July, from 38.5 in June. At the same time, however, investors have become more positive on the current economic situation. The current assessment component increased to 10.6, from 8.6 in June. The first increase after three consecutive drops.

Today’s ZEW index fits into the current picture that the German economy looks like a grab bag, which has something for everyone. It has something for everyone. For the optimists, there is the strong labour market, solid private consumption, strong construction growth and confidence indicators at high levels. At the same time, however, there are dropping new orders, disappointing exports and the continuing euro crisis for the pessimists.

Admittedly, new dark clouds have started to black out growth prospects of the German economy. These clouds are not coming from the South but from the East. The stuttering and now slowing Chinese economy is a clear cause of concern. could become a new risk factor for the German economic outlook. China has become the fifth most important market for German exporters, accounting for roughly 6% of total exports. Obviously, a Chinese hard landing would not leave the German economy unharmed. In the short run, however, the stronger-than-expected recovery in the US and the UK should at least partly cushion a negative Chinese impact. Particularly the US could come to the German rescue. Over the last three years, the US has returned as Germany’s second most important trading partner.

Today’s ZEW index had something for both pessimists and optimist. The truth is probably somewhere in the middle: the German economy remains solid but we will have to get used to annual growth rates of around 1% and not 3%. With such growth rates, it won’t be the economy which decides the September elections but other issues. The latest spying affair and increasing domestic political pressure on the government could be a bigger game changer in the coming weeks. It is almost an irony of fate that exactly in this situation Germany seems to need the US economy more than ever.

German government agrees on emergency fund against flood damages

Yesterday, the government agreed on an €8bn emergency fund to tackle the damages from the severe floods. Despite individual tragedies, the overall impact from the floods on the entire economy should remain limited.

For more than two weeks, Germany has been suffering from flooding of several rivers which have devastated parts of southern and eastern Germany. The extent of the flooding seems to exceed the so-called “100-year flood” which hit the country in 2002. As so often in these moments of human tragedies, the question of the macro-economic impact of such natural disasters pops up.

The answer is almost always the same and bare statistics tell a rather heartless story: the macro-economic impact of most natural disasters remains rather limited. Looking at industrial production and GDP growth during the floods in 1993, 1997, 2002 and 2010, it hardly shows any abnormal developments that could be related to the floods. In our view, the macro-economic impact of major floods in Germany over the last 20 years has been close to zero. This can mainly be explained by two factors: i) floods in Germany mostly hit rural and agricultural regions but not the backbone of the economy, the industry; and ii) natural disasters have a negative one-off impact on the wealth and/or the capital stock of an economy, which does not show in the GDP data. Subsequent reconstruction works, however, often lead to a pick-up in economic activity.

Sometimes, the pick-up in economic activity is interpreted as the fact that natural disasters have a paradoxically positive impact on growth. This interpretation, however, should be taken with a pinch of salt as it does not take opportunity costs into account and ignores the fact that reconstruction works have to be financed.

Returning to the current floods, Germany’s federal and state governments agreed on an emergency fund to tackle the costs of the floods and to launch reconstruction works. The fund should reach €8bn (around 0.3% of GDP). Officially, the financing of the fund has not been decided, yet, but judging from official statements, the €8bn should be financed by new debt and not by new taxes. In fact, the floods could prevent Germany from recording the second consecutive year with a fiscal surplus. In addition, Germany can also hope for some aid from the European Investment Bank, which earlier said it would consider loans to countries affected by the flooding amounting to around €1bn.

All in all, as in the past, the current flood will not come without costs and individual tragedies. Lost homes, production facilities or damaged infrastructure will trigger damage claims for insurance companies, wealth losses for households and companies and/or reconstruction work. The growth path of the total economy, however, should hardly be affected.

Beiers gevaar voor Angie

Bayern München is de nieuwe grootmacht in het Europese voetbal. Dominantie en succes horen bij het Beierse zelfbesef. Beieren is de motor van de Duitse economie en het bewijs dat Lederhosen en moderne technologieën bij elkaar passen. Beieren is ook een grootmacht in het Duitse politieke landschap. Een bolwerk van Angela Merkels christendemocraten. Maar na jaren van lusten dreigt Beieren nu een gevaar te worden voor Angela Merkel. Beieren belast letterlijk haar herverkiezing.

Beieren en belastingen zijn in Duitsland hét thema. Eerst bleek Uli Hoeneß, de bekende en populaire baas van Bayern München, met zwart geld in Zwitserland op de financiële markten te hebben gegokt. En nu is er ook een hele affaire over Beierse politici die ruimhartig familieleden in hun hofhouding hebben opgenomen. Terwijl dat laatste tot voor kort juridisch gezien niet strafbaar was, heeft het tot een grote morele verontwaardiging geleid. Er zijn inmiddels zelfs politici voor opgestapt.

Wat voor outsiders misschien op een regionaal vuurtje lijkt, is een buitenkans voor de roddelpers en kan tot een uitslaande bosbrand leiden voor Angela Merkel. Beieren was altijd al een beetje anders. Het is niet alleen een Duitse deelstaat, maar ook een vrijstaat in Duitsland. Een vrijstaat die sinds de Tweede Wereldoorlog bijna als een monarchie wordt gerund. Een monarchie onder leiding van de CSU - de Beierse zusterpartij van Angela Merkels CDU - die elf van de zestien regionale verkiezingen sinds 1946 met een volstrekte meerderheid heeft gewonnen. De grootte van Beieren maakt dat de CSU bij nationale verkiezingen snel 7 tot 10 procent van alle stemmen wint. Bijna elke conservatieve bondskanselier heeft een sterke Beierse CSU nodig om verkiezingen te winnen.

Belastingontduiking en nepotisme doen het nooit goed in Duitsland. Zeker niet vlak voor verkiezingen. Sowieso hebben steeds meer Duitsers het idee dat kleine dieven ijzeren ketenen hebben en grote dieven gouden. De oppositiepartijen waren al eerder begonnen aan een campagne voor sociale rechtvaardigheid en zullen niet nalaten dat vuur aan te wakkeren. Door de Beierse affaires bleef zelfs de owngoal van de oppositie - plannen voor een forse belastingverhoging na de verkiezingen met rijken- en vermogensbelastingen à la française - tot nog toe zonder voelbare schade.

De Duitse verkiezingen worden nog zeer spannend. Anders dan veel buitenlandse commentatoren denken, is het verre van een gelopen race. Een derde termijn als kanselier voor Merkel zal niet afketsen door haar eigen fouten, maar kan elk moment stuklopen door kleine, onvoorspelbare affaires buiten haar bereik. Er is echter kans dat Merkel ook die affaires overleeft. In de Duitse geschiedenis werd er maar één conservatieve politicus bondskanselier zonder een absolute meerderheid van de CSU in Beieren: Angela Merkel, in 2009.

Deze column verscheen vandaag in het Belgische dagblad "De Tijd"

ZEW drops in April

Correction but no collapse. The German ZEW index dropped in April after four consecutive increases. The ZEW index which measures investors’ confidence now stands at 36.3, from 48.5 in March; still above its historical average. At the same time, investors have become somewhat more negative on the current economic situation. The current assessment component dropped to 9.2, from 13.6 in March. New uncertainty stemming from the euro crisis and doubts about the strength of Chinese economy seem to have dented analysts’ optimism. However, it only looks like a correction at a level still consistent with modest growth. The big confidence collapse some had expected after the Cypriot bailout has so far failed to appear.


In the coming months, economic developments in Germany could take a back seat, making room for politics. As springtime has finally started, the economy should leave any weather-inflicted problems behind, finally starting the recovery. However, the economy will not experience the same sharp rebound as after the last contraction in 2009, but should rather recover gradually on the back of solid domestic demand and continued but fragile improvement of the global economy. Unless tail risks materialise, the recovery should neither be weak enough to unsettle, nor strong enough to create new excitement. It could become the economic incarnation of muddling through.

As regards politics, the campaign for the federal elections in September is gaining momentum. Even if there does not seem to be the single, decisive election topic, it is obvious that the euro crisis will be part of the campaigns and discussions. It might not be a winning issue between chancellor Merkel and her social-democratic challenger Steinbrück as the two biggest German parties hardly have substantially differing views on the crisis management. However, the emergence of a new, anti-euro party, the Alternative for Germany, could cost both parties important votes, even if Germans normally think more than twice before they choose political experiments in federal elections. Interestingly, according to latest opinion polls, there are more potential voters of the current opposition parties sympathising with the Alternative for Germany than voters of Merkel’s coalition.

With anti-euro and a return to the D-Mark ideas finally having a voice in Germany’s political arena, chancellor Merkel and her government are most likely to continue their strict stance of conditional integration, rather than easing it. In our view, Merkel will avoid making any concessions in the coming months. To the contrary, Merkel is likely to guard German taxpayers’ money even more than before. In this respect, expect the German government to continue pushing for the concept of bail-ins, even if it is not a template, to become a permanent feature of the crisis management’s toolkit.

Het catenaccio van Angela

Wat hebben Angela Merkel en ik gemeen? We houden allebei van voetbal. Wie herinnert zich niet het beeld van de juichende Angela Merkel live in het stadion bij belangrijke wedstrijden van die Mannschaft. Haar liefde voor de sport gaat echter nog niet zo ver dat zij met haar politieke strategie het spel van die Mannschaft kopieert.

In het Duitse politieke landschap hebben de tegenstanders van de euro eindelijk een stem gekregen. De nieuwe partij Alternative für Deutschland (AfD) is een vergaarbak van oude tegenstanders van de monetaire unie, vooral hoogleraren en populisten. Het programma is duidelijk: Duitsland moet terugkeren naar de D-Mark.

Zie je, hoor je nu veel international commentatoren zeggen, de Duitsers hebben ook genoeg van de eindeloze reddingsacties. Ik heb er mijn twijfels bij. Volgens recente peilingen is nog 27 procent van de Duitsers voor een terugkeer naar de D-Mark. Twee jaar geleden was dat nog meer dan 50 procent. Natuurlijk kijken veel Duitsers met buikpijn naar de Europese reddingsacties, maar zolang ze het niet in de eigen broekzak voelen, zal de wrevel niet verder gaan dan de borreltafel in de kroeg. Bovenal zijn Duitsers, anders dan bijvoorbeeld de Nederlanders in de afgelopen tien jaar, geen protest- of impulskiezers. Zeker niet op landelijk niveau.

De kans is groot dat het AfD hetzelfde lot gaat lijden als de Piraten: een tijdelijk mediafenomeen dat snel weer in de onbeduidendheid verdwijnt. Angela Merkel zal de opkomst van deze anti-europartij echter toch met argusogen volgen. Merkel weet dat er met Europa en de eurozone geen verkiezingen in Duitsland te winnen zijn. Wel te verliezen. Zo lang de Duitsers maar het idee hebben dat Angie goed over hun centjes waakt en de Zuid-Europese uitvreters iets doen in ruil voor de financiële hulp, is alles goed. Een beetje solidariteit mag dan ook wel. De redding van Cyprus en de lopende discussie over toekomstige bail-in's passen precies in die strategie en zal elk anti-eurosentiment in de kiem smoren. Het hoort bij de politieke strategie van Merkel om fouten te vermijden en de politieke tegenstander geen ruimte voor aanvallen te bieden. Met die strategie heeft Merkel succesvol de sociaaldemocratische uitdager geneutraliseerd en de verkiezingscampagne tot nog toe gereduceerd tot een pure sympathiewedstrijd. Een wedstrijd, die zij duidelijk gaat winnen.

Merkel staat 1-0 voor, maar durft niet voor de 2-0 te gaan. Natuurlijk heeft zij ook getalenteerde aanvallers op de bank zitten. Wat te denken van thema's zoals de gevolgen van de vergrijzing of hoe Duitsland zich voorbereidt op de tijd waarin de Chinese bedrijven Duitse producten daadwerkelijk kunnen namaken? Innovatie, onderwijs en work-lifebalans zijn onderwerpen, die het tweede doelpunt kunnen maken, maar die ook de verdediging blootleggen. In de politiek houdt Merkel duidelijk meer van een potje ouderwetse Italiaanse catenaccio dan van het flitsende en aanvallende spel van die Mannschaft. Eigenlijk jammer.

Deze column verscheen vandaag in het Belgische dagblad "De Tijd"