- The Washington Times - Thursday, September 22, 2005

Angela Merkel, leader of Germany’s conservative Christian Democrats (CDU), can draw one small consolation from the gridlock of Sunday’s election result. She has hitherto been uncomfortable about being compared to such a firm and radical conservative as Margaret Thatcher — “Germany’s Iron Lady,” etc. Well, she need worry no more about that.

It is unlikely she will become Germany’s new chancellor when the intraparty haggling is complete over forming a new government. And it is absolutely certain she will not head a government pursuing a program of radical economic reform.

Such a government — whether headed by Mrs. Merkel or by the current chancellor, Gerhard Schroeder of the center-left Social Democrats (SPD) — is not in the cards dealt by the voters.

The most important fact about the new parliament or Bundestag is that there has been no sharp swing to the right as expected but a modest one to the left. The conservative parties in the last parliament had 294 seats versus 304 for the governing left coalition of Greens and the SPD. Today’s parliament has 283 conservative members versus 327 members in the three leftist parties. In other words the collective center-left majority rose from 10 to 44 seats.

This swing has not been more clearly acknowledged because the Germans are embarrassed and confused about the rise of the third extreme left-wing party — an alliance of former SPD left-wing fundamentalists and former East German communists dedicated to preserving the German welfare-cum-regulatory state in all its bloated splendor.

None of the major parties want to form a coalition with the left party. Former communists in its ranks make it unrespectable. Also the other parties officially favor some economic reforms; the left party firmly opposes them.

But the raw political fact is the left party has nearly 9 percent of the popular vote and 54 seats — 10 more votes than the political left’s overall majority. The left party cannot be ignored in parliamentary calculations. Parliament has both an overall center-left majority and a firm ideological left opposition.

Does the Bundestag also have an antireform majority? That is less certain. Almost the only party committed unequivocally to a pro-business reform program is the liberal Free Democrats (FDP) who won almost 10 percent of the popular vote and 61 seats. There are moderate reformers in the SPD and the Greens — Mr. Schroeder is one — just as there are antireformers in the CDU. Reformers and anti-reformers are probably evenly balanced in parliament as a whole.

Whatever permutations one imagines, however, there is no parliamentary majority here for a center-right government pursuing Mrs. Merkel’s free market reforms — making it easier to hire and fire, reducing social benefits and hence labor costs, allowing shops to stay open longer, cutting and simplifying taxes, etc., etc. Even were Mrs. Merkel to tempt the Greens to join a CDU-FDP coalition — very unlikely — she would have to moderate her program dramatically to get their support.

A center-left coalition pursuing a slightly different reform program is equally hard to envisage. Mr. Schroeder — the left’s latest “Comeback Kid” — might well tempt the FDP into a broad left coalition. Once there, however, their favored reforms would be torpedoed by the anti-reformers in Mr. Schroeder’s own party, the Greens, the left party and even by a CDU embittered in apparently permanent opposition.

That leaves a “Grand Coalition” of the SPD and the CDU — perhaps with other parties. Such a government could certainly get some kind of reform through parliament. But even if Mrs. Merkel and Mr. Schroeder agreed to cooperate — a big “if” — the compromises of coalition-building would ensure tax increases on business and high-earners would accompany any market reforms, in order to keep SPD rebels happy.

So the prospect for Germany, as most voters clearly intended, is a continuation of the status quo. They want their generous welfare state and feather-bedded employment. They have not yet experienced the kind of frightening economic crisis that persuaded the British in the 1970s to undergo the cold shower of Thatcherism. And until they do, they will — in the words of the old joke — “die with their drawn salaries in their hands.”

The cost of this gridlock is that unemployment, now 11 percent, will remain high as German businesses build their new factories abroad where labor costs are lower and working arrangements more flexible than at home. In addition to Mr. Schroeder and the German labor unions, therefore, the winners in this election are Ireland, Portugal and eastern Europe.

Who joins Angela Merkel among the losers? Well, German consumers and unemployed, of course (though by now they must be accustomed to having their interests ignored) — but also Tony Blair and George W. Bush.

Mr. Blair had been counting on a Merkel victory to weaken the Franco-German bloc in the European Union and strengthen the British campaign for European labor flexibility and economic reform. That campaign — consisting largely of hot air — has had no success so far. Mr. Blair calculated that Mrs. Merkel in Germany and Nicolas Sarkozy in France would rescue his EU presidency and his overheated rhetoric from failure.

Now that will not happen. If Germany at home shrinks from a serious reform program, it certainly will not lead one in Europe. And even if Mr. Sarkozy eventually succeeds French President Jacques Chirac, he is now unlikely to abandon a Paris-Bonn axis in effect just ratified by the German electorate.

Mr. Bush similarly awaited a Merkel victory to moderate the anti-Americanism growing in both Germany and Europe as a whole. Mr. Schroeder exploited that anti-Americanism in his campaign more subtly than last time but still to great effect. Other European politicians will draw the lesson that anti-Americanism pays.

The Bush administration’s apparent calculation that, like Mr. Blair, they should “play nice” to Europe since Mrs. Merkel soon would lead Europe in a more Atlanticist direction has proved an illusion. Politically, Europe will continue in an anti-American direction — and economically in a corporatist direction.

Mr. Bush and Mr. Blair have just learned an important political lesson: If you want something done, you must do it yourself. If they really want Europe to move toward free-market liberalization and Atlantic cooperation, they must fight for those things. But Germany will fight on the other side.

John O’Sullivan is editor at large of the National Review.

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