German economy forecast to lag eurozone growth until 2026
The German economy is expected to significantly underperform the eurozone average until at least 2026, according to the European Commission's Autumn Forecast released on Friday.
In a remarkable moment of candour, the German Chancellor, Angela Merkel, has admitted that “trust has been lost” with the regional election in Bavaria, a severe electoral setback for the coalition. There have been no resignations yet despite the disastrous result for two of her coalition partners. Nor for that matter has there been any attempt to be dodgy in the matter of accountability; the Chancellor has attributed the denouement to what she calls an “erosion of confidence in politics at the national level”.
Her Bavarian allies in the Christian Social Union (CSU) were handed their worst result since 1954 in the prosperous southern state. The anti-incumbency factor is doubtless related to the migrants issue and the pressure on the economy; alone in Europe, Merkel’s Germany has adopted a humanitarian stand on the world’s dispossessed.
The verdict has been resounding even if the coalition limps along. The sharp psephological swing has reaffirmed that even a thriving economy and high employment were not enough to win over voters. And the fineprint of Sunday’s debacle must be that Ms Merkel must retain the trust, and no less crucially make the “results of our work visible,” to quote the Chancellor.
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There has, over the past 48 hours, been a mounting demand for the resignation of her government, which appears to have been jolted to its foundations. The votes garnered by the Social Democrats (SPD), the national coalition’s junior party, have halved, indeed slumping into single figures for the first time in the state. The party came fifth with 9.5 per cent of the votes, far behind the Greens and below the farright AfD though the time for a literal alternative to Deutschland is not yet.
There has been a marked attempt to blame individuals, rather than the problems and policies of the German government. The humiliating result for Merkel’s two partners is a serious blow for her shaky coalition, yet by Monday morning no heads had rolled despite calls from within the CSU for the party’s leader, Horst Seehofer, to resign. “I’m also not going to discuss my position today,” said a defiant Seehofer, speaking after a meeting of the CSU leadership which unanimously backed the Bavarian premier, Markus Söder, to continue in his position.
The party has blamed Seehofer for the result, which has been interpreted as punishment for sowing division within the coalition over the policy towards migrants. It has generally been acknowledged by the coalition partners that it needs a different style and language that connects with good governance.
The attempt to gain support on the right has failed after the AfD emerged as a party to reckon with in the last national elections. In the aftermath of the electoral disaster, Germany will now be riveted to the regional vote in Hesse at the end of the month, where the standing of both the CDU and SPD has plummeted.
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