Quo Vadis, Germania?

Confusion has a hold on the largest country of the European Union even two weeks after national elections were held. Never in memory did Germans face such ambiguous results: neither of the two main parties, the center-right Union of Christian Democrats (CDU) and the incumbent Socialist Party (SPD), has achieved the majority required to lead the country, even in coalition with their respective traditional partners, the Liberals for the CDU and the Greens for the SPD. And yet this was an election with a seemingly clear ideological divide: liberal reform to shake Germany out of its economic rut or business as usual with the governing SPD.

The biggest economy of the 12-member Euro-zone, Germany has had sluggish growth for at least five years, when the difficulties of integrating East Germany caught up with the Federal Republic. At present unemployment has reached nearly 12 percent of the workforce, or five million people. The CDU offered up a new candidate with a project of painful-but-healthy reform. Germany could either give the much-hyped Angela Merkel a mandate, or it would reconfirm its distrust of Anglo-Saxon-style liberalism and continue to adhere to the continental social-democratic model, permitting the incumbent chancellor Gerhard Schrder to sally on. In the event, such a choice proved too much for the Germans, and today the countrys direction remains anyones guess, although stasis is perhaps most likely.

The present mess follows the very mixed track record of the coalition which has run the country since 1998, gaining reelection in 2002. Red-green, as the colorful union of Socialists and Greens was known, scored its share of successes with the public, including its opposition to George W. Bushs 2003 entry into Iraq. However, the economy has faltered throughout the entire Schrder period, and the chancellors popularity has fallen to new lows, with significant SPD losses in 2004 and 2005 regional elections. His controversial 2003 program for labor and welfare reform met with widespread criticism. This past May, Schrder declared himself incapable of governing and requested an early election. Soon the summer months morphed into a hasty electoral campaign, pitting the self-abashing chancellorthough he remained the same photogenic, forceful orator he has always beenagainst newcomer Merkel.

If the incumbent was so unpopular, why did Merkel so obviously fail to garner more enthusiasm? She had a few cards in her favor: Germany has never had a female chancellor, nor one from East Germany, and her credibility as an economic liberalizer is enhanced because she is a former inhabitant of Soviet-controlled East Germany. Her program promised a strengthened transatlantic alliance to end the excessive anti-American zeal of the Schrder era. Above all, it aimed to relaunch the German economy through liberalization, easily the most discussed issue in the pre-electoral debate.

Maybe fear of Merkels too stringent reforms prompted her rejection at the voting booth. She proposed to raise the value-added tax in 2006, and, more saliently, chose as her prospective finance minister a Heidelberg professor associated with the flat tax, a fixed-rate income tax. According to some commentators, this may have been the innovation which sank Merkels boat. On the other hand, it was apparent throughout the campaign that the changes Merkel represented were of style rather than substance. Even within the CDU, her proposals generated controversy, casting uncertainty on future labor reforms. Further, her liberalism was circumscribed, so that her immigration policy, for instance, remained protectionist. The pains that the relaxation of protectionist laws would provoke make genuine reform in Germany rather unlikely, and only a decisive CDU victory would have brought prospects for genuine change.

If both major parties were losers of sorts, with each receiving about 35 percent of the vote, the minor parties undoubtedly were strengthened. The election also featured a new grouping left of the SPD, succinctly titled the Left Party, which received nine percent of the vote, capitalizing on citizens economic insecurity. Since even with their respective partners, neither CDU nor SPD has the necessary 50 percent majority to govern, we will see a novel coalition. This has caused speculation about improbable combinations such as Greens and Liberals together allying either with the CDU or with the SPD. The mostly likely outcome, nonetheless, is a grand coalition of CDU and SPD. Such a venture has not been seen since the 1970s, and is attractive to no one. A grand coalition will face difficulties that are already obvious, when consensus is lacking even on whether Merkel or Schrder would be chancellor. All in all, Germanys present direction is uncertain at best, and when this muddle is over, it will be close to impossible for any party to address the political and economic issues. Given the countrys stature within the vast economic and political space of Europe, no news from Germany today is bad news indeed.

Alexander Bevilacqua 07, a Crimson editorial editor, is a history concentrator in Leverett House.