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What Europe expects from post-Merkel Germany

Oct 2, 2021

02-10-2021 (updated: 02-10-2021 ) Welcome to a Special Edition of The Capitals. EURACTIV partners across Europe analysed what is at stake for EU countries as the “colours” of the next government will determine domestic politics and critical EU policies. [ Shutterstock/niroworld ] As political parties in Berlin are holding the first official coalition talks this weekend, the rest of Europe has adopted a wait and see approach. EURACTIV partners across Europe analysed what is at stake for EU countries as the “colours” of the next government will determine domestic politics and critical EU policies. The prospect of an SPD-led progressive government makes governments led by right-wing parties feel uncomfortable, and far-right ones feel threatened. Main conclusions: The participation of the Greens in the next government raises eyebrows in Eastern Europe, especially when it comes to the rule of law and green policies. Europe’s south hopes to end strict fiscal discipline while austerity hawks count on German liberals to lower anti-austerity expectations. WESTERN EUROPE The French dilemma  In France, the executive has carefully avoided a reaction to the outcome of the German elections. However, in a Twitter post on 26 September, French President Emmanuel Macron used election day to talk about his EU vision and ambitions. He recalled his initiative for a “sovereign, unified and democratic Europe”, launched four years ago during a speech at Sorbonne University. The message is a strong one: in Paris, hopes centre on creating an ambitiously pro-European German government, four years after the last re-election of Angela Merkel that left the Elysée frustrated concerning some aspirations on the European level. As French Presidential elections approach next spring– when Paris will be holding the presidency of the EU Council – it will be crucial to get things moving in the European scene. The Macronist executive will also want concrete results to show as the EU moves to negotiate the Fit for 55-package. However, France will still need a strong and equally ambitious German partner government to advance on the EU level. “German coalition talks should in no way coincide with France’s pre-election period. An unstable Germany will have a negative impact on Macron, something that far-right parties will take advantage of,” an EU source told EURACTIV, adding that ideally, a government should be formed before the end of the year. “A coalition including the Greens would curry favour in Paris”, policy analysts Sébastian Maillard and Alice Schmidhuber of the Jacques Delors Institute recently wrote in a policy paper . “An understanding with the Greens is considered easy and strategic for European economic issues in order to sustain the European fiscal stimulus and to revise the Stability Pact”, they said. “Conversely, a liberal return to power is feared due to their expected uncompromising attitude on these very issues”, they warned. In this light, the results of the German elections appear ambivalent for Paris. While the Green party’s participation in the future government seems certain, so does that of the liberal party. Much will thus depend on the compromises the two parties will reach in the upcoming coalition talks. On a broader level, the same applies to the outcome of the two parties’ negotiations with CDU and SPD. While a right-wing/liberal-dominated coalition might indicate the return of the very budgetary discipline so strongly apprehended in Paris, a left-wing/green coalition would undoubtedly mean greater flexibility on budgetary issues. On the other hand, it could mean trouble for France on the questions of nuclear power and common defence. /// Conservative Kurz remains silent as progressives celebrate The Austrian Green-chief congratulated his German sister party for their “best result in history” and says that the current constellation “is a great opportunity to enter government on the federal level.” The result of the German Greens is “good news for the future of our children in Europe,” he added. The liberal NEOS were also congratulating their counterpart in Germany: “A strong vote for the liberals means the strengthening of the centre,” NEOS leader Beate Meinl-Reisinger commented on Twitter. The Austrian Social Democrats called the result “a historic success” for the SPD, with SPÖ delegation leader in the European Parliament, Andreas Schieder, emphasising that this election “is the opportunity for a progressive shift in all of the European Union.” However, one person remained suspiciously silent: the conservative chancellor Sebastian Kurz, who neither commented on the historic bad results of the CDU nor the victory of the Social Democrats. “The result in Germany opens up different coalition constellations, and the next weeks will show who will become the next chancellor in Germany,” Kurz told the APA. However, the Chancellor was confident that the “good collaboration with the future government will continue” as Germany and Austria are “close partners and friends,” Kurz added. NORDICS Scholz seen as another ‘socialist ally’ in Scandinavia The mood in Finland (and presumably also in other Nordic countries) after the German elections and SPD victory is one of calm and anticipation. Many commentators mentioned that Olaf Scholz came from the shores of the Baltic Sea and had a background as the Mayor of Hamburg. That is supposed to give him some northern mentality and affinity with the Scandinavian welfare system. Finland, Sweden and Denmark (and soon also Norway, after their recent elections) all have a Social Democratic prime minister. Now they will have an “ally” in Germany. Answering a question from the Finnish daily, Helsingin Sanomat Scholz said: “I believe that what we are going to do in Europe will be very pleasing for the Scandinavian member states.” What would that mean? According to Jan von Gerich, the Chief Economist of Nordea Bank, the traffic light government of SPD, Greens and FDP would probably pursue a less strict fiscal policy and be more lenient towards indebtedness and budgetary deficits. That path could lead to fiscal integration in the Eurozone. Instead of being a temporary instrument, The Next Generation EU (NGEU), created amidst the pandemic, could become a permanent one controlled by the Commission. At least from the Finnish perspective, such a policy would have pros and cons. Infrastructure investments in green technology and digitalisation would offer Finland and also other Nordic countries mouth-watering opportunities. Germany is Finland’s number one export destination. However, the current Finnish government, especially the Minister of Finance, Annika Saarikko (Center), together with Sweden and Denmark (and Latvia, Austria, the Netherlands, Czech Republic and Slovakia), have been cautious on EU’s fiscal reforms and have been calling for old budget deficit frameworks. A possible more pro-integration EU policy in Germany would force Finland to think again about its alignments. A lot depends on the coming German government coalition. No matter what, Finland does not expect any overnight turnarounds. Continuation is seen as a virtue, policy towards Russia will not likely change, Nord Stream 2 will open, and building a common European defence will drag on. For Finland, this is positive. (Pekka Vantinenn, EURACTIV.com) Italy aims to fill the ‘Merkel vacuum’ “We’re currently undergoing a phase of change in European leadership. What Italy can do right now is take the opportunity to fill this leadership vacuum and lead the European Union”, Foreign Minister Luigi di Maio said in a TV appearance. “There are great expectations towards Italy. I believe that Draghi won’t disappoint them because Italy has a lot to say on a European level”, Di Maio added. The former European Central Bank chief, Prime Minister Mario Draghi, is being mentioned by many observers as the natural successor to Merkel as the EU’s most prominent leader. “Respected almost throughout Italy’s fractious political spectrum, he’s already rescued the country’s vaccination drive and tackled one of the problems considered most urgent but also most difficult — the inefficiency of the court system”, German commentator Andreas Kluth noted on Bloomberg. While Draghi himself is yet to comment on the election result, every prominent actor in Italian politics has jumped on the opportunity to give their interpretation of the German outcome. Centre-left Democratic Party secretary Enrico Letta said SPD’s win “is proof that the pandemic has to be tackled from a left-wing perspective”. In contrast, former prime minister Matteo Renzi, a staunch centrist of government-sinking fame, is unsure. “The liberal centrists and the Greens will be decisive for governing. The name of the chancellor – paradoxically – depends on them, more than on the big parties”, he noted. On the far-right, both League’s Matteo Salvini and Brothers of Italy’s Giorgia Meloni consider SPD’s success to be a warning sign. “With a sensational defeat of the centre-right and the victory of the socialists, it’s increasingly important for the Italian centre-right to unite”, Salvini said, adding that the “social-communist ideology in Europe” would otherwise have no limits. Meloni, for her part, commented that “the collapse in popularity among the CDU and CSU in Germany after 16 years of Merkel chancellorship and the success of the SPD shows that centre-right forces that lend themselves to unnatural alliances with the left for years end up watering down their identity and losing consensus”. (Viola Stefanello | EURACTIV.it) /// Spaniards hope for an EU ‘progressive axis’ The Spanish government, a coalition of the socialist party (PSOE) and left-wing Unidas Podemos (United We Can)- considers that Scholz’s victory will help consolidate a “progressive axis” in the EU, Spanish media reported. “Spain and Germany were already united in Europeanism. Now even more in colour and political orientation to promote a green and fair economic recovery”, Spain’s socialist PM, Pedro Sánchez, said on Monday (27 September), EURACTIV’s partner EFE reports . PSOE sources quoted 28 September by El Mundo stressed that if the SPD can finally form a progressive government, this would be a decisive factor to boost environmental and economic policies to guarantee basic services for the citizens. If Scholz forms a government with the Greens (Die Grüne), this “would be closer to our (political) views and would make the consolidation of the exit from austerity faster”, PSOE sources stressed. The end of austerity in sight Adriana Lastra, PSOE’s deputy secretary-general, expressed her optimism about the future road map of cooperation with Berlin: “it is a victory that has great significance throughout Europe, considering the political and economic weight of Germany”, she said, quoted by Spanish media on Tuesday. “The way out of this (post-COVID-19) crisis cannot be like the way out of the 2008 crisis; it cannot be an austerity-based way out. We have all understood the lesson, and society is betting on social democracy so that a fair recovery reaches everyone”, Lastra added. MEP: United to end ‘conservative hegemony’ MEP Juan Fernando López Aguilar told EURACTIV that EU socialists, in general, should learn from the past, when governments led by social democrats were a minority around the EU Council table, and there was an overwhelming hegemony of the conservatives. “There was a minority of progressive governments that were marginalised by decisions which causes severe damage to the EU social pillar,” he said. He added that now that the socialist heads of government are growing in numbers, the region, especially those “who have been impoverished by the years of austerity.” (Fernando Heller /EuroEFE / MADRID, Pol Afonso Fortuny | EURACTIV.com) /// Greeks hope to take a ‘fiscal breath’ Faced with public debt accounting for 210% of the GDP, Greeks focussed on the stance of the next German government on EU fiscal policy. There are fears that a “Jamaica government”, with the Ministry of Finance going into the hands of the Liberals, will insist on returning to a strict fiscal policy under the old Stability Pact. The conservative government (New Democracy, EPP) has avoided taking an official position. Certainly, the defeat of the Christian Democrats was not perceived positively, considering that the Greek PM Kyriakos Mitsotakis will be one of the few right-wing heads of states in the EU Council. On the contrary, the opposition leftist Syriza party expressed its satisfaction with the SPD victory. Similarly, Greek socialists chief Fofi Gennimata welcomed the news. “Social democracy is coming back. A wind of new change is blowing in Europe. Congratulations and good luck to Olaf Scholz. Today is a better day for Germany and Europe. We look forward to working closely with our German comrades,” he said. Overall, there are no high expectations for significant changes in German policy in the coming years. Of particular importance is the relationship between Berlin and Ankara, dominated by the refugee issue. In Athens, it is considered that Angela Merkel maintained a neutral, even tolerant, attitude towards Recep Tayyip Erdogan’s aggressiveness against Greece. However, Greece knows there are important trade links between Turkey and Germany, which will not change with a progressive government. On a political level, a progressive coalition in Germany may affect Greek politics too. For a long time, there has been discussion over the need for progressive parties to join forces and run against the ruling conservative party. Syriza leader Alexis Tsipras has repeatedly made such a call to Greek socialists and leftist Diem25 led by Yanis Varoufakis. (Kostas Argyros | EURACTIV.gr) Czechia fears ‘Green’ pressure on rule of law The Czech diplomacy representation in Berlin is convinced that Germany will have to change and adapt to the new global reality full of instabilities regardless of the election results. A slight shift in German foreign policy is expected, but the EU’s cohesion will remain a common Czech and German priority together with the necessary green transformation of industry. Czech experts share such a view. However, if German Greens strengthen their position in the country’s foreign policy after elections, Czechia could expect significantly higher pressure in several areas. “Conflict of interest, the rule of law and media independence – especially of public broadcasters – would be much more carefully followed. Any Czech diversions from EU standards would be reflected in the quality of Czech-German relations,” Vladimir Handl from the Department of German and Austrian Studies at Prague-based Charles University told EURACTIV.cz. Parliamentary elections are held in Czechia on 8-9 October, only two weeks after the German elections. Still, no substantial changes in bilateral relations are expected due to heavy economic interdependence. Handl is sure that current bilateral relations are very stable. “We can characterise them as ‘functional pragmatisms’ based on economic ties,” Handl said. “Angela Merkel’s departure in itself will not bring any significant change in Czech-German relations,” he added. On the other, the end of Merkel’s era could affect personal ties between the two countries. While Merkel comes from East Germany and has a strong relationship with Eastern European countries, all the potential successors lack such proximity. (Aneta Zachova, EURACTIV.cz) /// An ‘ideological’ stance toward Slovakia? A potential German left-wing progressive government ruled by the SPD may be bad news for Slovakia and the Visegrad region. Especially with Die Linke in the coalition, said Milan Nič, the German Council on Foreign Relations analyst. Even without Die Linke in the government, Nič expects the new government’s stance towards Visegrad countries to be more ideological and with fewer personal ties that would attenuate conflicts. “Not only that social democrats are not in the government in any of the Visegrad countries; they are not even in charge of capital cities”. Moreover, the new coalition may be stricter in the questions like the rule of law, democratic principles, climate and energy. This will mean deterioration of relations, especially with Warsaw. However, a push for such questions may also mean less cohesion in Visegrad because the “new government will focus on issues, on which Visegrad countries do not agree upon themselves”. Analysts expect the most significant tension to arise in the case of Die Linke in the government. “Besides other things, we would have to open questions such as defence or foreign relations”. German elections are so far not a topic in Slovakia. Public statements of the government officials are scarce, as well as media coverage. Nič implies that this reflects the overall state of German-Slovak relations. “They are empty and mostly based on a European level. I would expect the Ministry of Foreign Affairs to prioritise relations with Berlin,” Nič added. A few exceptions include the initiatives of president Zuzana Čaputová who recently received her German counterpart, Frank-Walter Steinmeier, in Bratislava. (Michal Hudec, EURACTIV.sk) /// Poland, Hungary cautious with Greens   “Potential change of government in Germany will not impact the Polish-German relations substantially”, says Agnieszka Łada-Konefał, vice-director of the German Institute of Polish Affairs in Darmstadt (Deutsches Polen-Institut in Darmstadt). “There is room for new accents. Poland shall remain an important partner for Germany and an important EU member state, according to the Germans”, she told EURACTIV. Łada-Konefał emphasised that the German approach towards Poland is based on a large pan-partisan consensus. “Germans need to have good relations with Poland to counterbalance their relations with France”, she said. According to the expert, an additional reason is “the general disengagement of the Polish side”. On Russia, Łada-Konefał said: “SPD is more pro-Russian, and the Greens are more critical towards Russia, and they will need to cooperate. The question remains if the pro-Russian Die Linke joins the coalition”. On security and NATO, the expert noted that if Die Linke joins the government in Berlin, “it may impact German engagement in international security”. The German party which may bring the most significant change to the relations with Poland are the Greens. They are the most critical of climate policy in Poland and the rule of law situation. “Should the Greens control the foreign ministry, there might be an increased criticism towards Poland”, the expert said, adding that it may be moderate because once in government, the Greens are expected to tone down their rhetoric on Poland. A similar view was shared by Hungarian analyst Dániel Hegedüs from the German Marshall Fund. The Greens and FDP “of course are committed to liberal democratic values,” he told EURACTIV. However, “whether that can be directly translated into German government policy when they come into the sawmill of everyday politics, then I have my doubts.” (Piotr Maciej Kaczynski | EURACTIV.pl, Vlagyiszlav Makszimov | EURACTIV.com) THE BALKANS Borissov: From Brussels favourite to ‘bad boy’? An SPD-led government in Germany has significant potential to sharpen international attention to the problems of corruption in Bulgaria. This could create big issues for former Prime Minister Boyko Borissov and his GERB party (EPP), which is trying to find ways to return to power. For the past 15 years, Borissov has consistently enjoyed the support of the CDU/CSU and Konrad Adenauer Foundation (CDU) helped establish the GERB party in 2006. The former Bulgarian prime minister has always enjoyed the strong support of the EPP in Brussels. In return, he has taken on the balancer role in the Balkans while also liaising with Turkish President Recep Tayyip Erdogan. Merkel’s resignation and the coming to power of a left-wing government in Germany can turn Borissov from a Brussels favourite into the bad boy from the Balkans. Ironically, Germany is likely to play a leading role in this process. The Friedrich Naumann FDP foundation has been active in Bulgaria for years, exposing corruption scandals during GERB’s rule. Since 2015, the foundation has been publishing the “Black Book of Government Waste in Bulgaria”, which aims to bring together in one book all corruption scandals in the country. The edition is free for anyone who wants to understand the extent of corruption in the poorest EU country. During this period, Boyko Borissov was the country’s prime minister and a favourite of the CDU/CSU. The Greens and the FDP know a lot about what has happened in Bulgaria in recent years and will probably not be late to point the finger. Increasing international pressure will make it much harder for Borissov to survive politically. He is still using the image of “Brussels’ favourite” in his country, which guarantees European money, trying to break out of the internal political isolation he found himself in after the April elections. (Krasen Nikolov, EURACTIV.bg) /// Romanian socialists to take advantage of the ‘momentum’ Iohannis, the first ethnic German to be elected president of Romania, has long been seen as a close ally of Angela Merkel in EU summits. He has so far been silent on the results of the German elections, as well as the vast majority of his allies. PNL, the center-right party that supported Iohannis in the presidential elections, has its own political crisis to handle at home, as it faces a no confidence vote in the parliament on Tuesday. Siegfried Muresan, a Romanian MEP and vice-chair of the EPP Group in the European Parliament, conceded the loss of the German conservatives for the first time since 2002 but said he still hopes the CDU will be a part of the government. Muresan said a coalition between CDU and SPD is possible but unlikely. More likely, he said, is that there will be a coalition with the two smaller parties, the Greens and the liberal FDP. “The question is who will convince both parties to form a coalition with them,” Muresan noted. “For Romania and the entire EU, it is essential that Europe’s largest member state will be led by a stable and coherent government,” Muresan said, adding that his own preference would be a government led by a right-wing chancellor. On the other hand, Romanian socialists were quick to hail SPD’s victory. “I congratulate Olaf Scholz and the German Social Democrats for their huge victory in the federal election,” wrote Marcel Ciolacu, the president of Romania’s socialist party PSD, on Facebook. “The left-wing has a real chance to lead Germany’s destiny over the next years and return a social and human dimension to Europe,” Ciolacu added. Read more. Victor Negrescu, an MEP from PSD, said the results in Germany showed that the left is gaining ground across the bloc. “The result in Germany, like in Norway, confirms that our fight for a modern left is right. Social democrats across Romania should be convinced that we are on the right track across Europe. We will continue the work of PES activists for a Romanian left that prioritises citizens,” Negrescu said. However, Romanian social democrats do not seem to be fully aligned with their EU political family. Relations between Romania’s PSD and the S&D group in the European Parliament do not seem to be fully fixed, after the Party of European Socialists (PES) froze relations with the Romanian party due to rule of law issues back in 2019. At the time, the PSD government attempted to push forward major changes to justice legislation which were heavily criticised by the European Commission and other international institutions for weakening the fight against corruption. After Liviu Dragnea, the president of PSD and the mastermind behind the attempt to change the laws, was jailed in May 2019 with corruption charges, relations between PSD and PES were partly recovered. However, Romanian social democrats are still far from having the same progressive agenda as some of their counterparts in Europe. For example, two weeks ago, PSD MEPs were the only members of the S&D group who voted against the EU Parliament’s resolution on the LGBTIQ community rights. (Bogdan Neagu | EURACTIV.ro) Croats do not expect ‘major’ changes “Angela Merkel’s 16 years have ended, and those were good 16 years,” social democrat Croatian President Zoran Milanović has said. He projected that the SPD would form the new government, but “there won’t be any major changes in German politics, towards Europe and towards Croatia”. On the other hand, the SPD’s victory is not good news for conservative PM Andrej Plenković, President of the HDZ party affiliated to the EPP. Plenković saw a change ‘in the mood’ of German voters. “We noted a certain change in the mood of voters in Germany, we will follow with interest the further development of events regarding the formation of the future coalition and government, of course expecting the continuation of good relations between Croatia and Germany, which is our priority,” Plenković commented. (Zeljko Trkanjec | EURACTIV.hr) A Bosnian refugee’s path to Bundestag Jasmina Hostert, born in Pašić in 1982, was seriously wounded, losing her arm at the beginning of the war in BiH. She was then sent to Germany for treatment and is now an SPD lawmaker in the Bundestag. Adis Ahmetović was born in Hanover after his parents left BiH for Germany because of the war. Both have vowed to help BiH. “We need a new plan, a better plan than what Merkel has been doing for the last 16 years”, said Adis Ahmetović. The SPD’s longtime parliamentarian, originally from Croatia, Josip Juratović, also got a new mandate. He has been an opponent to nationalist policies in BiH for years and has been advocating for stronger internal integration of the country. (Zeljko Trkanjec | EURACTIV.hr)

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