Reelection Campaign

No Sign of Change

  • Why it matters

    Why it matters

    Angela Merkel could become the longest-serving chancellor in German history, matching Helmut Kohl’s 16 years.

  • Facts

    Facts

    • Angela Merkel became leader of the conservative Christian Democratic Party in 2000 and has been the country’s chancellor since 2005.
    • The Christian Democrats narrowly missed winning an absolute majority in 2013 federal elections and are ruling in a coalition government with the center-left Social Democrats.
    • Ms. Merkel’s popularity has waned in the past year due in large part to the refugee crisis. Her CDU has slumped in the polls to around 30 percent, though it remains the largest party.
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    Audio

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German Chancellor Angela Merkel arrives for a news conference at the CDU headquarters in Berlin
Ms. Merkel won't change her stripes after 12 years in power, Handelsblatt's chief politics editor argues. Source: DPA [M]

Angela Merkel has confirmed her candidacy to become federal chancellor for the fourth time. The decision suggests there will be no change of course. The German public feels it is in good hands with the longest-serving government head in the Western world.

This feel-good factor is worth a lot in times where populists are gaining ground. But is it really enough for a country like Germany?

Helmut Kohl’s fourth term as chancellor amounted to four wasted years. The country was blighted, and at the end of it, people went for a genuine fresh start in the form of Social Democrat Gerhard Schröder.

Today, the chancellor’s economy is doing nicely on the back of zero interest rates, demographic factors pushing down unemployment on the labor market, and the low price of oil. But there will be no modernization agenda or digital economic miracle with Ms. Merkel at the helm.

Everything points to a new version of the “make a wish“ coalition.

The chair of the center-right Christian Democratic Union, who presented herself as a reformer in 2003 at the party conference in Leipzig, is now a thing of the past. The way it looks now, everything points to a continuation of the governing grand coalition of Ms. Merkel’s CDU and the center-left Social Democratic Party, which is the best constellation for the chancellor to be able to govern quietly for another four years.

But that will not benefit the middle classes, above all. Tax cuts are only ever promised during election campaigns – afterwards nobody wants to know. People can only dream of the end of the solidarity tax – a tax introduced after unification to help finance investment in the former East Germany – being abolished, or a softening of the bracket creep that has dogged Germany’s tax code. But Ms. Merkel has also been magnanimous in the last three years, increasing the pensions of mothers, facilitating pensions at the age of 63 and introducing the minimum wage. Interestingly, these were all projects which affect private citizens and companies and will start to to put a burden on state coffers right at the end of her possible fourth term in office.

Everything points to a new version of the “make a wish“ coalition, made up of the center-right CDU and its Bavarian sister party, the Christian Social Union (CSU) , together with the center-left Social Democratic Party (SPD). This is an investment in the past, not in the future. There will be a minor tax reform and another big and costly pension reform in Germany. We will see small increases in social security and unemployment insurance contributions – all carefully measured.

Only then will there be a close look at the legacy of Ms. Merkel, when there is a final reckoning.  Only then will we see what burdens people can expect after her 16 years in office. The population is already having to pay rising prices for electricity as a result of Ms. Merkel’s “energy revolution.” It is still not clear if the rescue packages for Greece will be the zero-sum result for Germany’s budget, as was promised. We still do not know what the refugee crisis will cost. The gainfully employed middle classes will derive little benefit from all of that.

A great deal has to happen if Angela Merkel and the citizens of Germany, two partners who were once deeply in love, are not to grow still further apart.

 

To contact the author: sigmund@handelsblatt.com

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