The politics of the Eurozone are evolving. As progressive and conservative visions for the continent's economic future emerge, unprecedented levels of cross-border political co-operation are now also taking place. In the short-term, this could fracture the Franco-German axis. Taking a longer perspective, however, we might be witnessing the birth of transnational partisan politics.
Earlier this month, German Chancellor Angela Merkel announced she will campaign for French President Nicolas Sarkozy in this spring's elections. And this week, Der Spiegel reported secret diplomacy has been underway for months between Merkel's CDU headquarters in Berlin and the offices of Sarkozy's UMP Party in Paris. Indeed, Merkel's team is expending as much energy on the French presidential race as they would on an important regional election at home.
This is an unprecedented move, reversing decades of German impartiality in the domestic affairs of their neighbors. While driven by fear the fiscal pact agreed to save the Eurozone might be overturned if the French Socialist Party's candidate for President, Francois Hollande, wins the election, the consequences of this strategy could be far-reaching, indeed.
On the very same day the pact was originally outlined by Merkel and Sarkozy in Paris last December, Francois Hollande chose to address a gathering of Germany's official opposition party, the Social Democrats, at their bi-annual congress in Berlin. There, he argued that the pact - which includes automatic sanctions for member states that fail to keep budget deficits under 3% of GDP, makes it easier for EU regulators to challenge national budget policies, and enshrines a "golden rule" to balance budgets - was an attempt to "constitutionalize Austerity." Hollande proposes to re-negotiate the treaty so as to complement commitments to fiscal responsibility with obligations to favor pro-growth policies on the part of the European Central Bank and the creation of EuroBonds and Euro Firewall.
Today, the juxtaposition is striking. While the Franco-German axis remains at the heart of Europe, a political storm is developing between competing visions of Europe's future: one progressive, the other conservative; one focused on growth, the other on austerity.
In the past, the Franco-German axis drove Europe forward through cross party consensus. Helmut Schmidt was a social democrat and Giscard D'Estaing a conservative. Together they founded the European Monetary System, the precursor of the Euro. And the Euro itself was brought to life by the Christian Democrat Helmut Kohl, and the Socialist Francois Mitterand. Interestingly, at the Social Democratic Party's congress in Berlin, Helmut Schmidt, chose to be critical of Merkel's handling of the crisis. Germany, he argued, had an historic obligation to return the generosity its neighbors and current allies had shown following the Second World War, and a moral obligation to act with greater solidarity given it had benefited most from the Euro. While foreshadowing the substance of Hollande's speech the following day, Schmidt rationalized an alternative strategy in terms of historical obligation and enlightened national interest, not a new European progressive vision at odds with the continent's current conservative leadership.
Elsewhere, however, there are indications that a transnational progressive movement to counter the Merkel-Sarkozy alliance is taking shape. Last weekend, in Seville, candidates for leadership of the Spanish Socialist Party echoed calls for a progressive response to the crisis. Hollande's advisors were present, as too were delegates from the German Social Democratic Party. In Berlin too, they have begun privately to express their sympathy for a more progressive policy. The difficulty German Social Democrats face is that Merkel's approach is proving popular at home. Indeed, this week her ratings have jumped two percentage points to 38 percent, their highest levels since August 2009.
With Federal elections scheduled in Germany for Fall 2013, the big question is whether the Social Democrat's chairman, Sigmar Gabriel, will take the risk and campaign alongside Francois Hollande? A progressive resolution to the debt crisis will be hard to sell to the German public, even if it he believes it to be a more effective and appropriate solution in the long-term. Indications are that he will. The Foundation for European Progressive Studies -- led by the Italian Democrat and former Prime Minister, Massimo D'Alema -- is set to hold a gathering in support of Hollande next month, and Gabriel is scheduled to speak.
The next few months, then, could profoundly reshape European politics for years to come. Progressive in Europe should hope that they do.
Follow Matt Browne on Twitter: www.twitter.com/GlobalProgresMB
French election poised to become referendum on fiscal union pact ...
The vast majority of the EU has nothing we Americans would recognize as free market conservatism. The argument in the EU is how best to manage the decline of their debt ridden welfare states now that they have run out of other people's money. The so called conservatives want to raise taxes and trim spending, while the progressives want to print money and maintain spending. Both are recipes for economic contraction.
A free market solution would lower tax rates and lower the size of government as a percentage of GDP even more. Basically what happened during the 80s and 90s in the United States.
America's only real problem is its government.
Today this practically means a Chancellor will be elected from the members of the largest coalition party which in turn means that Chancellors are either from the Christian Democratic Union (the party currently headed by Merkel) or the Social Democratic Party. It is important to note that it's not necessarily the party leader who will be elected.
Usually, the parties determine prior to the campaign season in a party congress who will be their Chancellorship candidate. So the public is aware when a new Bundestag is elected who is likely (depending on the resulting majority coalitions) to be Chancellor.
So, for the upcoming election (regularly in 2013 - should the current coalition hold until then and the Bundestag not be disbanded early) the Christian Democrats will most likely chose Angela Merkel again as their front runner. It is still open right now who the Social Democrats are going to pick: Current party leader (and former Minister of the Environment) Gabriel, former Financial Minister Steinbrück or the current caucus leader and former Foreign Minister Steinmeier (who was the candidate in 2009 already).
"A really efficient totalitarian state would be one in which the all-powerful executive of political bosses and their army of managers control a population of slaves who do not have to be coerced, because they love their servitude.
To make them love it is the task assigned, in present-day totalitarian states, to ministries of propaganda, newspaper editors, and school teachers."
Aldous Huxley
Upending the rule not to meddle in the sovereign affairs of their neighbors is both desperate and reckless. It is not likely she came up with this idea, and is acting on behalf of her backers who did not like the French German stance on Iraq.
Europe supporting action against Iran is of paramount importance for those setting her loose on the campaign trail in France.
Let us hope the voters of France and Germany rid us of the politicians who are putting ideology ahead of country.
Note how the austerity package for Greece is being used to disguise the true motivation.
That is actually a solid result. Germany doesn't have a "first past post"/ two-party parliamentarian system. We usually have coalition governments consisting from at least two parties.
Consequences of this are, for example, that the current government is center-right, made up from the Christian Democrats (Merkel) and Free Democrats (mostly libertarian/ pro- business; previously led by current Foreign Minister Westerwelle, now led by Minister of Economics Rösler). The FDP is utterly, bitterly and vocally opposed to things like the Financial Transaction Tax (as long as it's not implement in all of the EU meaning also in the UK). Due to the coalition agreement Chancellor Merkel cannot go against that. But - given the dire situation the FDP is in (they could end up not being seated in the next Bundestag since - in polls - for more than a year now they poll with less than 5%) - Chancellor Merkel, in a press conference with PM Monti publicly (and quite unprecedented) said she personally was in favor of a FTT but that the FDP was blocking.
Germany will be fine, as long as the US provides for their external defense to prevent a Germany-Russian replay of the Cold War (with Poland once again serving as the buffer and doormat).
The rest of Europe is circling the drain, some more quickly, some more slowly. The curiosity in all this is that Europe faces the same choice as in 1939: invite Germany in, or effectively cease to exist as a sovereign entity. Greece will have the drachma, which will provide those nations left inside the Eurozone with an interesting display of the consequences of leaving.