With Emmanuel Macron’s election as French president, a sharp critic of Germany’s vast export surplus has become one of the most powerful men in Europe. Although his opinion is shared widely by commentators, politicians, and organisations such as the IMF, the German public is still largely ignorant of the devastating consequences of the macroeconomic policies of its current government. Unless this changes, the internal cohesion of the European Union and the well-being of its citizens are under serious threat….
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She looks as unruffled and collected as ever: Angela Merkel’s relentless success is much in the line of German politics, which eulogises experience and calmness in the face of major challenges.
In September, Germans will head to the polls to vote for a new parliament. While European countries such as the Netherlands or France have seen massive rises in far-right movements, Germany – while being one of the most permissive countries when it comes to immigration – has been largely untouched by any kind of political shift.
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When German Chancellor Angela Merkel publicly stated that she hopes Emmanuel Macron will win the French presidential elections, few were surprised. Not only have both sides been in regular contact over the past months, but it also seemed unlikely that Merkel would refuse to back the only person still able to prevent a Marine Le Pen presidency.
Nevertheless, if Macron wins on Sunday, which current polls suggest is likely, this will not only be a relief for Merkel, but will also put her in a difficult position. Macron, who has run on a decisively pro-European platform, will need to prove his ability to achieve reforms once elected. For his planned reforms on the EU-level however –– which most prominently feature a common eurozone budget and parliament –– he will rely on German cooperation. The problem? Until now, the appetite of Germany’s current government for Macron’s reforms has been rather low.
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In September, Germans will head to the polls to elect a new parliament. One of the parties expected to enter the Bundestag for the very first time is the Alternative für Deutschland (or Alternative for Germany). Over the course of two years, as AfD has transitioned from an agenda of economic reform to one of nationalist populism, they have morphed into something resembling the American alt-right.
In 2012, a group of German conservatives and classical-liberal economists who had defected from Angela Merkel’s center-right and the traditional liberal-democrat party found themselves associating with independent-voter groups in order to run for office on the local level. Soon, these conservatives, who were heavily critical of the European Union’s economic interventionism and especially the European common currency, found themselves alienated by these existing platforms, and in 2013 they founded the AfD.
Soon after its creation, the party began to struggle with internal disagreements about the priorities of its political message: the classical liberals were keen on developing a German brand of Euroscepticism—which, relative to the Anglo-Saxon brand, would appear less aggressive and more academic—while nativists and those who were religiously inspired pushed for more nationalism and social conservatism on issues like gay marriage (which remains illegal in Germany). These were internal fights over these differences during the 2013 election, which contributed to the AfD narrowly failing to enter parliament.
In 2014, the party continued its rise in the polls. It won electoral success in the European Parliament, local parliaments, and municipal councils. Former AfD chairman Bernd Lucke, a classical-liberal economist known for his numerous appearances on German TV shows dedicated to debates on the Euro and its effect on the European debt crisis, became the target of the nationalist wing of the party. But AfD’s moment in the spotlight was short-lived. As the issue of Greece leaving the Euro was swept off the table and the Euro-crisis became uninteresting for the German media, so did the focus on the AfD.
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Nothing is really changing politically in Berlin. To begin with, Germany’s socialists are currently in a coalition with the conservatives, forming an immense majority in parliament. The coalition has slowed down public spending cuts and reforms enacted by the previous government. The German Left is at risk of fading into irrelevance as its choices regarding coalitions are limited: it’s either Merkel once again or going down the road of a three-party coalition.
In this post-crisis economy, Berlin shouldn’t be interested in who organizes a government reshuffle in September, but should instead be concerned with how a freer economy can unleash the potential of hard-working Germans.
Germany’s historic free-market champion, former conservative politician Ludwig Erhard, should serve as a role model for the ideological emptiness of contemporary German politics. Erhard is known to be responsible for the most extensive period of economic deregulation in modern times. Instead of following the temptation of slowly moving towards more economically interventionist policies, Berlin should follow Erhard’s example who believed that, instead of central planners, individuals should decide a country’s future.
Continue reading at FEE.