Der seltsame Fall des Dr. Jekyll und Mr. Hyde
stephen clarke, 21 October 2011
While British politicians gear up for a debate on whether or not to hold a referendum on EU membership, and discussion swirls around how the British public feels about Europe, perhaps more important is how the German public feels.
Without attempting to suggest that the concerns and views of the British public do not matter, how Germans and the German Government acts in the next 6 months could determine what kind of EU Britain decides to stay in or get out of. This is because the fate of the Eurozone and the single currency will have an immense affect upon the EU and the choice faced by Britain.
Those looking to opinion polls for guidance on the direction that Germany is heading in will be disappointed. Currently the German Financial Times is running an online poll asking readers: do you want the Deutschemark back? Current results indicate that 54 per cent of the 3,180 voters do. Earlier this month Reuters reported that 54 per cent of Germans wanted the Deutschemark back, but interpreting the poll was difficult as ‘only 43 percent of those asked thought the German economy, Europe’s biggest, would benefit from a reintroduction of the mark’. Other polls covered in the Telegraph and the Daily Mail in 2010 also put the number of Germans wanting the Deutschemark back at between 50 and 60 per cent. However many polls, including the poll covered in the Reuters report, seem to indicate that support for reintroduction of the Deutschemark has not grown since a year ago, leading some to conclude that the current crisis is not having as dramatic an effect upon German opinion as is perhaps expected.
What can be gleaned from these polls is that the German populace and the German electorate’s feelings on the Euro are far from clear. This is unsurprising given the way in which the German economy has both benefitted and suffered from the Euro. Going forward German businesses and the German people cannot decide whether the Euro will prove to be a noose around the German economy’s neck or whether it will continue to keep German labour costs down to the benefit of German exporters.
In contrast support for the Euro amongst German politicians seems relatively secure. Although Angela Merkel’s coalition partners the FDP have flirted with a more Eurosceptic line, they are arguably the most unpopular party in Germany at the moment. Furthermore the opposition SPD are more pro-EU, and pro-Euro than Merkel’s party. In short, even if ‘Eurozonesceptic’ (as opposed to sceptical of the EU as a political structure) Germans exist, there is not an obvious party which they can rally around.
Nevertheless it would be false to conclude from this that when push-comes-to-shove German politicians and the German people will unwaveringly support the Euro. The current stance of the German Government reflects the fact that Angela Merkel’s party is aware that voters are increasingly sceptical of the benefits of the single currency. The German Government has so far refused to consider French demands to turn the EFSF into a bank to buy the bonds of financially embattled Eurozone states. Furthermore Merkel and her ruling Coalition have also refused to entertain the idea that Eurozone countries move into a fiscal union, either directly through fiscal transfers or indirectly through jointly guaranteed ‘Eurobonds’. This firm line, seen by some as dithering in the face of calamity, may actually reflect a concern by the CDU/FDP that the electorate will punish them for appearing weak, a concern already buttressed by defeats for the parties in Lander elections.
The problem is that while the current stance of the German Government may make sense from a national political point of view, it is looking increasingly out of touch with economic reality. This is a concern because to all intents and purposes, Germany is the Euro and without firm action by the German Government the Euro will implode. While supporters of the Euro may despair at Germany’s current inaction, those opposed to the Euro, and I include myself in this, should not rejoice. The Euro, in its current form is unsustainable, but seriously reforming it, or disbanding it will require leadership. At the moment there is scant evidence of such leadership in the Eurozone, perhaps because Germany, likes its national psyche, seems to be pulling in opposite directions.