Can Europe Make It?

Public and published opinion in Germany: obstacles for a Social Europe?

Even Angela Merkel herself seems convinced that she can only win elections as long as the people believe that the euro crisis is ‘managed well’ and will not cost them anything.

Thilo Zimmermann
19 April 2015
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Wolfgang Schäuble, 2013. Demotix/Gonçalo Silva. All rights reserved.For many people in southern Europe and in France it seems absolutely clear: the German public opinion is imperturbably convinced of Angela Merkel and her (neo-liberal) austerity policy. Even Angela Merkel herself seems convinced that she can only win elections as long as the people believe that the euro crisis is ‘managed well’ and will not cost them anything.

With reference to public opinion in Germany, Merkel was able to reject all calls for a stronger European union: Eurobonds, a European ‘Marshall program’ and a stronger European governance. All of which would not be possible against the will of the German people or the German constitutional court. The only way to convince the German people to save Europe is to apply a strict austerity program and a neo-liberal reform agenda.

So, is German public opinion the obstacle for a stronger, supranational and more social Europe? There are some flaws and paradoxes in this logic. Despite all horror scenarios regarding the euro crisis, despite the billions of euros spent on rescue programs and despite the polemics about lazy Greeks, up until today populist movements did not win even one seat in the German parliament.

This is in sharp contrast to the elections in Italy (5 Stelle and Lega Nord), UK (UKIP) and France (Front National). True, in current opinion polls the ‘Alternative für Deutschland’ hovers around 6% and could probably enter the parliament in the next election but this is still far from the 20-30% that populist movements won in the other three countries.

The origins of the neo-liberal reform agenda

It seems useful to take a closer look at the neo-liberal reform and austerity agenda in Germany. Where does it have its origins? Has there always been a majority behind it?

The red-green coalition, which later implemented these neo-liberal reforms, came into power in 1998. This was the first time in Germany that a previous government was completely dismissed from office by an election.

Oscar Lafontaine, a leading figure of the left wing of the SDP, soon realised, however, that new chancellor, Gehardt Schröder, was not willing to follow a more Keynesian economic policy, as he had promised before the elections. Lafontaine resigned from his office as Minister of Finance in March 1999 and the coalition focused its work on projects connected to the so-called ‘new social movement’ that had brought them into power.

Without economic reforms, however, Germany’s situation worsened every year. In 2000, the employers' association ‘Gesamtmetall’ founded the INSM, the initiative for a new social market economy, to propagate a neo-liberal reform agenda. Across the media (even amongst left wing media like Der Spiegel) there were calls for more economic reforms.

In January 2002, the Bavarian Prime Minister Edmund Stoiber was nominated by his party to run for the next elections. The choice of Stoiber instead of the head of the CDU (Germany’s conservative party), Angela Merkel, made it clear that the CDU wanted to run an election campaign based on reducing unemployment and economic reforms. A coalition between the CDU and the liberal FDP was ahead in all opinion polls. In February 2002 Schröder founded the ‘Hartz Commission’, under the leadership of the human resources executive of Volkswagen, Peter Hartz, to elaborate his own proposals for a job market reform, which was supposed to combine neo-liberal reforms with basic social principles.

Schröder and his red-green coalition were able to change the trend in public opinion in the last weeks before the election, especially due to the Elbe flood during the summer and the upcoming war in Iraq. Stoiber, with his strict neo-liberal agenda, did not get a majority. In 2003 Schröder initiated Agenda 2010, a political program to reform the labour market and the social sector in Germany, based on the proposals of the Hartz Commission. When the reforms were implemented, however, the Social Democratic Party (SPD) plummeted in the opinion polls and lost a spate of regional elections. Lafontaine left the SPD in 2005 to found a new ‘real’ left party that later merged with the former communist PDS to form the new left alternative, ‘Die Linke’.

The ‘voted’ opinion in Germany

The loss of support and the threat of a split set off warning bells inside the SPD. Schröder had to call a halt before it was too late and asked for a vote of confidence in the parliament to make new elections possible one year before the term was actually over. He claimed that his reform agenda needed a new legitimation from the people. However, the SPD never recovered from the shock of the reform agenda they applied in the years 2003-2005. Since then the SPD sits at around 21-25% in opinion polls, (in the 2002 election, the SPD made it to 38.5% and in 1998 they had even 40.9%).

During the comparatively short election campaign in 2005, the German public was submerged with neo-liberal reform propaganda. Angela Merkel promised that she would ‘durchregieren’ with a conservative-liberal coalition, meaning that she would consequently assert a truly neo-liberal reform agenda against any resistance. She nominated the (neo-liberal) German jurist and tax law expert Peter Kirchhof as the possible future Minister of Finance. Up until the very last day of the election campaign, all opinion polls – and all newspapers – forecasted a great victory of Merkel and her neo-liberal reform agenda.

When the people went to the ballot boxes, however, Merkel received a hard check, 35.2 % meant one of the worst results of the CDU/CSU since the foundation of the federal republic of Germany. Merkel surprisingly failed to achieve a majority for her favoured conservative-liberal coalition. The red-green coalition, however, also lost its majority and the SPD was no longer the strongest party.

In a famous debate on the evening of the elections (the so called ‘Elefantenrunde’ where all heads of the parties discuss the result), Gerhardt Schröder celebrated his ‘victory’ in a bigheaded, partly arrogant way. He denied any leadership claims of Merkel for a new coalition, underlining that the German people rejected her, despite all political indoctrinations. The bad result made a palace coup inside the CDU likely, however, if nothing else, Gerhardt Schröder’s behaviour during the debate welded the conservatives together again and Merkel was able to form a coalition with the SPD (without Schröder) under her leadership.

The 2005 elections made it obvious for Merkel and many conservatives that it was nearly impossible to win a majority with a neo-liberal policy agenda. Lobby groups, like the INSM, changed their strategies and neo-liberal reforms were propagated only in very subtle forms.

Germany’s neo-liberal reform agenda in the euro crisis

Since the economic crisis of 2007-2009, the neo-liberal reform agenda has lost much of its credibility. The crisis has shown that markets do not always lead to optimal results. A real alternative, however, has not been proposed until today. During the 2009 elections both members of the coalition, SPD and CDU/CSU, ended up with their worst results since 1949. The three ‘small’ parties, Greens, Left party and the FDP, made it together to 37.4%.

Since the euro crisis in 2010 the advocates of a neo-liberal reform agenda have another strategic problem. The labour market reforms of the Schröder government and the wage restraint of the unions in this time are seen by many scholars as a major reason for the euro crisis. These reforms lowered the labour costs in Germany, making German companies more competitive. As there are no exchange rates anymore, the lowering of labour costs cannot be adjusted further.

The success of German companies was, therefore, based to a large extent on the losses of southern companies. Most people in Germany, however, are not aware of this logic that caused the euro crisis. A new neo-liberal agenda, and a similar debate about it, like at the beginning of the millennium, would also open the discussion as to what impact such reforms actually have on Germany’s neighbouring countries. It is therefore unlikely that you can find many proponents of a liberal agenda who would advocate a neo-liberal reform agenda for Germany at the moment.

Indeed, during her second term, Merkel brushed off all attempts that her liberal coalition partner made to impose neo-liberal reforms in Germany. The FDP was crushed from two sides: ‘swing’ voters, who made up the majority of its voters in 2009, did not believe in their neo-liberal program anymore, core voters were disappointed in the loss of neo-liberal reforms. Up until 2014 the FDP was thrown out of most regional parliaments and finally even out of the Bundestag. 

Merkel, instead, does not base her policies on any principles or ideologies, but rather on opinion polls and the published opinion of the yellow press. Der Spiegel has found that the government spends a remarkable sum of taxes for opinion polls – and keeps the results of these polls secret. Shifts in Merkel’s policies – if they happen at all – are often connected to shifts in the headlines of the biggest German yellow press magazine.

Visions for a new Europe

Helmut Kohl once said that if he would have followed the opinion polls or if he would have held a national referendum about the introduction of a common currency, the euro would never had come into existence. However, despite all other stories that are told, till today a great majority of the Germans support the euro and acknowledge the necessity of Schröder’s reform agenda.

Furthermore, history also shows that there is no majority for a strict neo-liberal agenda, as it is applied at the moment to Greece. What the Germans really want is not austerity but stability – and that is what Merkel delivers by austerity policies. The German public opinion is therefore not necessarily an obstacle for a stronger integrated and more social Europe. It is the lack of visionary political leaders and their obedience to published opinion.

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