Tuesday, January 31, 2023

Policy change in Europe likely as German CDU elects new leader

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When Angela Merkel and Emmanuel Macron unveiled their revolutionary plan for a 500 billion euro pandemic stimulus fund last May, a prominent German politician expressed deep misgivings. This weekend, he could be elected leader of Ms Merkel’s party.

Friedrich merz said that the idea of ​​the EU raising funds in financial markets and distributing them in the form of grants to member states “runs up against the limits of [EU] treated ”.

As an MP, he promised voters that the euro zone would not become a “transfer union” – a system where rich nations like Germany bail out their poorer neighbors. “I feel bound by this promise,” he said.

Mr Merz, a millionaire lawyer and former president of BlackRock Germany, is one of three candidates in the digital election on Saturday night for the head of the Christian Democratic Union, Germany’s most popular party.

A victory for Mr Merz, whose views on the EU have more in common with the so-called “frugal” countries like Austria and the Netherlands, together with Merkel, could have profound implications for Germany’s role in Europe.

Vowing to make the CDU more conservative, Mr Merz is slightly ahead of his two rivals, Armin Laschet, Prime Minister of North Rhine-Westphalia, and Norbert Röttgen, chairman of the Bundestag’s foreign affairs committee.

The winner will be in pole position to run as the CDU candidate for chancellor in the Bundestag elections in September, then succeed Merkel, who is leaving politics after 16 years as chancellor.

The change at the top will have huge ripple effects across the EU. Ms Merkel won the bloc’s reputation the most experienced crisis manager, a role she took over during the coronavirus pandemic. A rock of stability, it is widely respected for its ability to resolve conflicts, find compromises and mediate between opposing camps. A new chancellor will inevitably mean a new style of German leadership in Europe.

“The way Germany exerts its weight in the EU will change, and this will have far-reaching consequences,” said Herfried Münkler, a political scientist at Humboldt University in Berlin. “This [Merkel] role of honest broker, mediator – it is coming to an end.

The change will be more marked if Mr. Merz becomes Chancellor. “It would be a different style, much more brutal and authoritative,” he says.

In their public statements, the three candidates demonstrated remarkable unanimity on issues such as Europe. All are fervent supporters of the EU, attached to the Franco-German partnership. But Mr Laschet is synonymous with continuity with Ms Merkel’s journey in Europe, while Mr Merz sometimes has his more conservative tone.

In a book published last year – New times, new responsibility – he said that Germany must “learn the language of power”.

“More than ever, we must defend our interests within the European Union”, he declared.

During a debate between the three candidates earlier this month, Mr Merz, who served in the European Parliament for five years, also expressed reservations about the next steps towards European integration.

“I am skeptical of transferring more powers to the European Union,” he said. “The EU will only have a future if the nation states remain [its] key pillars. I don’t want to see an EU in which our identity dissolves and we are only Europeans.

During a debate last month, he also took a bribe at the European Central Bank, lamenting the effect of his low interest rate policy on “private savings” in Germany and the “real estate market”.

“I am more and more critical. . . ECB policy, ”he said.

“Merz is playing with this section of the CDU which constantly fears that Germany will be conned by other EU member states,” said Lucas Guttenber, deputy director of the Jacques Delors Institute, a think tank. “There is a large constituency that thinks that every deal the EU makes is detrimental to German interests.”

On some issues, however, Mr Merz advocates much closer coordination between EU states. In EU foreign policy, for example, he wants to see unanimity replaced by qualified majority vote, to allow the EU to project its power more effectively in the world.

It is an idea which is also supported by Mr Röttgen, who said that the EU risks being “pulverized” between the United States and China in their new great power rivalry. He and Mr Merz advocate the creation of a vanguard of EU member states that could better assert a “European voice” in world affairs.

“Do we want to continue playing in the lower leagues, every man for himself, or. . . in the Champions League, to play a role in the world? Asked Mr. Merz.

Its other positions on Europe are in the mainstream of the CDU. It supports the completion of the EU banking and capital markets union and the creation of a single energy market. He wants the EU to invest more in R&D, in its rail network and in digital infrastructure. He also says that the bloc must reform its competition law to allow the creation of European champions.

He also generally supports the coronavirus pandemic stimulus fund, saying in May that it was good that Germany and France had taken the initiative, and that Berlin had a “fundamental interest” in a single market European that works. But he has reservations. In his book, he notes that EU treaties prohibit the bloc from getting into debt. He also asks questions about how the fund will be deployed.

“What is really going on with this money?” he writes. “Is it going to flow into European projects or, more or less uncontrollably, into national budgets?”

But even if he wins, Mr Merz might find it difficult to fundamentally change the CDU’s policies on Europe, which are largely the preserve of its powerful parliamentary caucus – a generally belligerent group over the integration of the euro zone but can sometimes show flexibility: it has the stimulus fund, for example.

“A Merz victory will not change the CDU’s approach to Europe overnight – the party is far too heterogeneous for that,” said Mr Guttenberg. “Basically the CDU doesn’t know what it wants the EU to become, and in that regard Merz seems to be making its way.”


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