No-one is a better representative of a united Germany than Angela Merkel. First mocked as [Helmut] Kohl’s girl, Forbes magazine has for some years listed her as the most powerful woman in the world.
After Donald Trump’s victory in the US general election, the New York Times describes Merkel as the last defender of the liberal West.
Merkel is modern: as a trained physicist, being a housewife is just as alien to her as climate change denial. Against Trump and other xenophobes she defends an open world, and, in spite of grumbling on her right flank, she is doing well at it. Short of a miracle she is going to win her fourth term [in Germany’s elections on Sunday 24 September].
When her challenger Martin Schulz [Social Democratic Party] explained, he wants to put social justice front and centre of his campaign, journalists ruminated on the power of this theme. Solid growth and an unprecedented level of employment, they reckoned, had surely provided an answer to the social question.
While social fissures are statistically clear, and they are visually striking to anyone who drives from a banking centre to a decaying suburb or a deserted small town, the left has at best only been able to politicise the social question here and there.
The [right-populist Alternative for Germany] AfD is not trying this at all. In contrast to the rightwing populists in many other countries, who aim for a welfare state purged of foreigners, the AfD is staking everything on a radical Deutschmark-nationalism...
After unification and the German-German currency union, the economy of the new [Eastern] Federal States collapsed, and unemployment and public debt reached record levels. Social Democratic Party leader Gerard Schröder was elected in the hope that he would reduce unemployment and the insecurity and inequality that went with it. He used the state debt as a pretext for his Agenda 2010 reform programme. The first fruits of this programme were the development of a minimum-wage sector and stubborn mass poverty. Merkel took on this legacy and its political blasting power, which has worked well until now.
Merkel has called for these social fissures to be suppressed. And members of all different income groups have answered this call. That is where Merkel’s success lies.
Seen from above, Germany looks good. When Merkel became Chancellor in 2005, Germany was seen by economists as the sick man of Europe: high debts, high unemployment, little growth. The German economy didn’t exactly sail entirely smoothly through the global economic crisis, and after it the Euro crisis, but they suffered much less from them than did many other countries. What’s more: the German economy emerged stronger from both crises.
State and private debt are low by international standards, and employment is at a record level. Even the rate of full-time employment has lately started to increase again. Because wages are lagging so far behind productivity, profits are surging.
Workers in manufacturing, and in particular here those in the upper wage brackets, have seen real wage increases of between 5 and 18% since 1990. But in the same period, labour productivity has increased by about 30% — albeit with a reduction in growth since the global economic crisis. The majority of German workers are employed in sectors which are closely integrated into the world market, and live in constant fear that their production section will be outsourced to sweatshops elsewhere in Germany, or abroad.
In the service sector, workers have had to be content with falling real wages since Agenda 2010, and at the lower end of the wage scale, some incomes are now lower than they were in 1990.
The difference between wage incomes and profit incomes is as great in Germany as it is in the USA. Only state redistribution policies have been able to reduce this inequality substantially below American levels.
In terms of disposable-income inequality, Germany is still ranked among the mid-range OECD member states. But stubborn poverty still remains. The promise that you can climb the social ladder through study and hard work has disappeared. Your social class is now determined almost exclusively by your parents’ social position.
Little wonder, then, that political resignation accompanies poverty. The richest 20% of the population has a 90% voter turn-out rate, whereas the poorest 20% has a turn-out rate of a little over 60%. That accounts for the almost-guaranteed re-election of governments who promise to slash taxes and cut public services.
In the early elections of September 2005, Merkel hoped to be able to further plough the neoliberal furrow prepared by Schröder.
She called, amongst other people, Paul Kirchhoff into her team of experts. Kirchhoff lobbied to replace progressive income taxation with a stepped model, which would have favoured the higher-income groups who had already benefited so much from Schröder’s policies. But it wasn’t enough for the hoped-for coalition with FDP [Liberal party]. Merkel found herself, once again, the Chancellor of a Grand Coalition [i.e. a coalition of the centre-left Social Democrats with the centre-right Christian Democrats].
Schröder’s advisor had spoken of a “new centre” — essentially an alliance of older skilled workers and new information workers — as the basis of a Red-Green [SPD-Green Party] coalition. This centre was smaller than expected and when the New Economy euphoria subsided, it was less susceptible to Schröder’s rhetoric of hard work and flexibility. Merkel refrained from any attempts at building sociological coalitions. Rather, she constructed a political centre, into which flocked representatives from the CDU, SPD, FDP and Greens.
The coalition agreement between the SPD and the CDU saw the SPD become the custodian of the welfare state that they had until then been slashing. After the Fukushima reactor disaster, Merkel, who in the 2005 campaign had presented the prospect of an extension of nuclear reactor lifespans, said she wanted to speed up the phasing-out of nuclear power, and so made the Greens into informal coalition partners. Within her own party, Schäuble assumed the role of the neoliberal gadfly, rendering the FDP surplus to requirements.
Schäuble went after the crisis-stricken countries of Southern Europe. Firstly, Germans were shown very clearly what they were in for if they ever fell behind in international competition. Secondly, a kind of national body of creditors was created. While only the possessing class is involved in the export of capital, the have-nots know precisely that they have to pay the bill if investments made abroad get written off. So they too more or less supported Schäuble’s outward-facing austerity drive.
Schäuble’s austerity policies are unpopular abroad. The criticisms of Germany’s new authoritarianism that were heard abroad led, at home, to a reversal of the attitude of global openness, which had once been such a source of pride: in its place came various kinds of localist chauvinism. Yet the increasingly destabilised political centre around Merkel and Schäuble, but also around Gabriel [leading SPD member and Merkel’s Foreign Minister] and Steinmeier [leading SPD member and President of Germany], don’t understand why at home they are under pressure from the right, or why abroad they are not hailed as leading fighters for a liberal world order.
Schulz’s “Take a chance on justice” slogan gave him a good shot in the election. But his subsequent decision to laud the SPD’s record from Schröder to [SPD) Vice-Chancellor Gabriel then allowed Merkel to pull ahead. If he can’t hold out the prospect of a credible social democracy, then he’s done for.
The same goes for whoever Merkel forms a government with: the social divisions at home, to say nothing of the political fissures in the EU and transatlantic relations, are going to test Merkel’s ability to suppress inconvenient truths. If she can’t manage it, the whole political edifice around her could quickly collapse.
Then the average German might stop shaking their head at the oh-so-impossible creatures like Trump and May or Erdogan and Putin. Then they might start yearning for [Frauke] Petry [leader of the AfD] as a Le Pen; or for [Sahra] Wagenknecht [leading member of Die Linke] as a Corbyn. Not an appetising prospect.
No wonder that so few people are able to imagine a world without, or after, Merkel.
Abridged from SoZ online