GERMAN PRESIDENT Horst Köhler warned political leaders against unnecessary squabbling ahead of September’s general elections at a ceremony in Berlin yesterday. His comments were topical given the evident tensions recently on display in the grand coalition on issues arising from the economic crisis. He said they should be guided by Germany’s leading role in Europe and how the crisis can give a new momentum to European unity.
The latest arguments between the Christian Democrats (CDU) and Social Democrats (SPD) concern Germany’s role in providing aid for EU states in financial difficulties. SPD strategists are reported to believe this could be an important differentiating issue between their leader Frank-Walter Steinmeier and Chancellor Angela Merkel. They say Germany can reap an advantage from giving aid now in years to come, effectively by imposing conditions which would shape the future course of economic and taxation policy.
Ireland looms large in these debates, as SPD leaders and state officials link our current economic difficulties to stability of the euro zone, low corporation taxation and another referendum on the Lisbon Treaty. The message is clear, even when surrounded by denials or retractions. If Ireland seeks help or solidarity from its EU partners we should be prepared for such a reciprocity. Perceptions matter in these circumstances and Ireland is currently seen as ill-prepared but needing help. In the interests of the whole system German leaders are willing to respond; but they are determined the policy outcome should be shaped to suit themselves.
Such blunt and semi-public bargaining is comparatively rare – but so are these times. The best way for Irish leaders to avoid this is to ensure we do not need emergency aid by taking timely and difficult decisions about taxation and expenditure cuts in the forthcoming budget. The German debate concerns Greece, central and eastern European states too. The two main parties differ on the desirability of offering aid, as the SPD is inclined to do, or adopting a wait and see approach, as Mrs Merkel prefers.
Similar disagreements can be seen in their policies on aid for the German car industry and on whether the federal elections, set for September 27th, should be held earlier. The two main parties do not want to end up in another grand coalition, but they are competing hard for the centre ground. The liberal Free Democrats, the Greens and the left-wing Linke party are snapping at their heels from outside that consensus.