Timothy Garton Ash (The Guardian): The new sick men of Europe

[Jack Rabbit]

From The Guardian Unlimited (London)
Dated Thursday September 22

Germany and France are the new sick men of Europe
With paralysis following the German election, the EU's claim to be the world's leading economy looks increasingly absurd
By Timothy Garton Ash

The Indian restaurant owner in Berlin said this kind of post-election confusion was quite normal where he came from. The politicians would sort it out eventually and form some kind of coalition government, he reassured the German television reporter. His smile implied: relax, and have another drink. "Well, that's interesting ... Indian conditions!" commented the fiercely competent German studio anchor, with unconscious ethnic condescension. And her tone implied: have we really sunk so low? Indian conditions, here, in Germany?

To which I would say: "If only..." If only Germany had anything like the economic dynamism of the world's largest democracy - a democracy, incidentally, slightly older than that of the Federal Republic of Germany. Just to remind you, India's growth rate over the past 12 months was 7%, while Germany's was 0.6%.

The result of the German election - if one can call it a result - will not help to close that gap, or address the chronic problems of stagnation and mass unemployment in what is still Europe's largest economy. We are in uncharted territory, with the leaders of both main parliamentary parties, Angela Merkel and Gerhard Schröder, staking their claims to lead a coalition government as federal chancellor. (Schröder has broken with established political precedent, which calls for the leader of the largest parliamentary group to have the first crack at putting together the parliamentary coalition needed to be chancellor.) However, article 63 of the federal republic's meticulously crafted constitution lays out a series of stages by which, over the next couple of months, the parties can, under the general tutelage of the federal president, attempt to form either a coalition government with an absolute majority in parliament or a tolerated minority government. If none of that works, the president can dissolve this hung parliament and call a new election.

In my view, that would be much the best outcome. The process will waste six months, but any likely coalition government will waste much longer. Any of the now possible coalitions will be alliances of chalk and cheese, if not of fire and water. They will involve extraordinarily painful compromises on policy. They will be plagued by personality clashes and parties jockeying for position in an election everyone will expect to come sooner rather than later. The results in economic and social policy - and probably in foreign policy - will be more of that soft fudge in which German attempts at reform have been suffocating for more than a decade. This will be bad for Germany, bad for Europe and bad for the world economy.

Read more.

[sam sarrha]

1. Well that's what happens when you copy the Bu$h economic Model

[Kellanved]

2. the Guardian is rapidly falling in my esteem

Comparisons to developing countries are nice if one wants to throw numbers around, but as we are talking about relative growth, it is without any informative value whatsoever (and that's not even factoring in the reunification and stuff). By comparison, even the UK's growth is without much information.


My personal guess is that we'll see a grand coalition forming soon; the media has to be desperate to write this sort of article in the first week after the election.

Coalition talks follow a choreographed scheme; phase one is : appear as big as you can. We are in the middle of it; if things go their usual path, we'll see a coalition gaining substance in 10 days.

The article also grossly overestimates the importance of the German Federal Government - at least when it comes to economic factors. Many of the important switches are either at the EU level or at the state-level; the Federal Administration has very little to say, as it is sandwiched in between the other two.
And the "lower the taxes" brigade conveniently forgets that Schröder lowered the taxes far under the level set by Kohl's CDU/FDP coalition.
The SPD also has the more company-friendly tax plan - don't ask me where the "CDU is better for the economy" is coming from - probably the general anti-Union mood.

[fedsron2us]

3. Loath as I am to come to the defence of Guardian

which I consider to be the most overrated 'liberal' newspaper in the English speaking world, it should be pointed out that this was a comment piece from the academic Timothy Garton Ash. He used to work for the right wing Spectator so it is probably safe to say that this piece does not reflect the Guardian's 'official' editorial view on the German elections..