Thursday, October 3, 2013

Merkel, Merkel, Merkel


This is late since the election happened on September 22nd but I have always wanted to write something about this election cycle. I have always and will always be fascinated with Angela Merkel, the girl from communist East Germany who grew up to become the most powerful woman in Europe and in the world.
I had always known about her because of the fact that she is the first female German Chancellor, but I started following her closely when the Greek bailout crisis was going, that fabled time with Merkozy, the portmanteau name of Merkel and Sarkozy together, sadly over since the departure of Sarkozy from French Politics.

Merkel has been Chancellor of Germany since 2005 and was reelected for a third term in 2013. She is the leader of the CDU (Christian Democratic Union), a conservative party. In 2005 when she was first elected, she formed a coalition with CSU (Christian Social Union) a sister party from Bavaria and SDP (Social Democratic Party of Germany) a liberal party and Merkel chief antagonist this election season. In 2009, her coalition government got rid of the SDP and allied itself with the FDP (Free Democratic Party) another liberal party. She is an astute political thinker always doing what is necessary to stay in power.

To understand the forces at hand in the 2013 German Federal Election, a basic understanding of the Euro crisis of 2011-2012 is needed. It was a period in which Greece, Spain and Italy, almost destroyed the European and global economies. The European an economic cooperation made of 27 European nations, is effectively divided in two parts: the Eurozone, 17 countries who have all accepted the Euro as their common currency and the other countries that are still holding their own native currencies. One of the chief problem of the Eurozone was due to the fact that it was comprised of very successful and big countries like Germany and France, and other not so successful minor ones like, Greece, Cyprus, Portugal etc. Those latter countries due to sharing a currency enhanced in value by the successful countries were able to borrow and spend way above their means, which eventually led to a crash in their economies. Ireland and Portugal were among the first to fail, but that was in the late 2000's and they all received bailouts of from European Union countries. Greece's bailout however was spectacular as the country needed hundred of billions to be able to repay their creditors or else default. While Greece is a small country and rather insignificant in the global market, their default would have greatly devalued the Euro, creating an economic chaos that would made larger European ecomomies collapse and make September 2008 look like child's play.

Unlike other European countries that had been suffering recessions due to the 2008 crisis, the German economy was strong and robust. Letting Greece default on their debt would have devalued the Euro, and seriously hurt the Germans. Bailing Greece out, meant that German savings accumulated through hard work would be used to pay for a country that over borrowed and over spent. Merkel mindful of the fact that the mood at home was not of completely bailing Greece out, and that not bailing Greece could cause a economic collapsed opted for the middle road. Greece would receive the 103 billion Euros bailout (with the bulk coming from Germany) but the Greek government would be forced to look at their spending and to do a lot of cutting to reach targets set by the IMF. The bailout would be given in three tranches and only if those targets were met. The Greek prime minister, George Papandreou resigned, and a non politician technocrat, Lucas Papandemos was appointed. To the outside world it looked like Merkel was meddling in Greece's internal affairs and undermining their democracy, therefore she developed an unfair reputation. To me all those actions are understandable as she was trying to protect her fellow countrymen's money, being in an Union means that you have to help each other out, but it does not mean absolute help with no strings attached. She applied the same steely manner with Italy and Spain (writing about their crises would make this piece even longer), Italy changed governments and began cutting and Spain avoided a much bigger plunge in their economy.

Heading in the 2013 elections, Merkel was already on strong footing, Germany was a beacon of stability and the only economy growing in the European Union. Under her leadership, Europe had weathered the Greek crisis, the Italian crisis and the Spanish crisis. She represented calmness and stability to the German people and those become recurring themes in her campaign. Her chief rival the SDP, really had nothing spectacular to offer. Their candidate to the Chancellery, Peer Steinbrueck, a former finance minister in the 90s, had nothing particular to do or say. And in the last days of the election had the foolishness to pose with his middle finger raised on the cover of Sueddeutsche Zeitung (a German magazine). That gesture was widely mocked by the Germans and gave him and the SDP very bad press in the last days of the election, the gap between the SDP and CDU could only increase.



The election results spoke of the admiration of the German people of Merkel. Her party garnered 42% of the vote. Their chief competitors, the SDP came a distant second with only 25.5% of the vote. Unfortunately for Merkel, her junior part to the CSU, was unable to garner enough vote to pass the threshold required to be represented in Parliament. This robbed Merkel of the chance to be the first German chancellor since Adenauer to have a super majority in government. It will be interesting to see who she will pick for he coalition partner, the SDP or the FDP? My money is on the FDP. Peer Steinbrueck, onn the other hand has now resigned from the SDP. I know Angela Merkel is technically a conservative and on the right and that I should be cheering, the SDP who are leftist, but something in me just can't be helped in wishing for prosperity and success for this extraordinary woman. May Germany and Merkel continue on this good path!

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