Pedro von Eyken from La Prensa for FinGurú
On February 23, the Germans went to the polls, ahead of schedule, to put the country back on its feet in the wake of one of the most severe economic and social crises since the establishment of the Federal Republic in 1949. The coalition government led by the Social Democrat Olaf Scholz, battered by a severe economic recession and rising fuel costs due to the war between Russia and Ukraine, brought the country to the brink of disaster.
The Christian Democrat Friedrich Merz, from the CDU of Adenauer, Kohl, and Merkel, secured the first place with 28.6% of the votes. He had never dropped below 30% during the years of Merkel and obtained 41.5% in 2013. A Grand Coalition government of the CDU alongside its partner, the Bavarian Christian Social Union (CSU), and the Social Democrats (SPD) was expected.
The coalition negotiations concluded on the 9th of this month. In Germany, because of its parliamentary system, alliances are not mere words that the wind carries away. Programmatic commitments are written in detail and signed. The German agreement, in this case, consists of 146 pages.
UNPRECEDENTED FACT
The unprecedented fact of these elections was that the far-right party “Alternative for Germany (AfD),” created in 2013 and compared by many to 20th-century Nazism, ranked second in voter preferences with 20.4% of the votes. They surpassed the Social Democrats, who suffered the greatest electoral defeat in history, at 16%, ten points less than in 2021. Merz has always expressed his strong refusal to form a government with the AfD, known for its racism, anti-European sentiment, anti-immigration stance, and sympathy for Russia. The party is closely monitored by the Federal Office for the Protection of the Constitution, as the Fundamental Law of 1949 prohibits extremist parties. Anyone interested in a brief and objective review of German history from 1933 to 1945 could check marked differences in ends and procedures between the AfD and Nazism, responsible for World War II and the Holocaust. However, superficial generalizations sell better than serious discernment, and for many inside and outside Germany, the AfD is the new Nazism.
Merz had distanced himself from politics. He returned after the retirement of his great rival, Angela Merkel. Neither his proposals nor his style could be further removed from those of the woman who preceded him in leading the CDU and the country. It is the same center-right but firmer, less "political" than Frau Merkel.
CRISIS INDICATORS
The Argentine headquarters of the Hanns Seidel Foundation, of the Bavarian Christian Social Union, kindly provided me with the following indicators of the crisis.
* ECONOMY: Germany is facing a severe recession for the second consecutive year. Its GDP decreased by 0.3% in 2023 and 0.2% in 2024. According to BDI, the Federal Association of German Industry, the country has entered a deep crisis, and by 2025, economic production will fall by an additional 0.1%. It will be the third consecutive year of recession.
The punitive tariffs from the U.S. will complicate the landscape of a country focused on the export of its metallurgical industry, especially automobiles. The annual inflation rate, between 2023 and 2024, reached 2.2% after being 5.9% in the 2022-2023 period and 5.9% between 2021 and 2022. These rates are very high for Germany. The cost of energy due to the war between Russia and Ukraine has led to the highest household electricity tariffs in Europe. Energy from nuclear power plants was phased out in April 2023 under pressure from the Greens party.
Finally, the decline in productivity has been consolidating: it was 0.1% in 2022 and 0.6% in 2023. In 2023, Germany ranked 14th in productivity worldwide, behind Sweden, Finland, and Denmark, but also behind Belgium and the U.S. The rate of absenteeism due to illness, averaging 15.1 days per employee in 2023, has shown its highest level. There is much to improve.
* MIGRATIONS: Germany continues to lead European attractiveness for immigration. Of the nearly 14.5 million migrants in the European Union recently, 40%, or six million, arrived in Germany. The high and controversial openness of Angela Merkel, which allowed more than 1.2 million refugees and asylum seekers to enter between 2015 and 2016, at the peak of the conflict in Syria, is perhaps the most criticized aspect of her extensive government. In the first half of 2024, 3.48 million refugees were living in Germany.
This constitutes a phenomenon that worries the average German, who is beginning to show rejection. According to personal testimonies that have been relayed to me, the mere act of hearing foreign languages in a large train station is bothersome, not to mention the attacks by Muslim migrants in public gatherings. Tighter control of this variable is on the horizon with Merz's new government.
* DEFENSE: The expenses of Germany's participation in military assistance to Ukraine since the Russian invasion of 2022, already elevated, will increase significantly in light of the United States' threat to withdraw or decrease its military support to Europe, especially given the Russian-Ukrainian conflict, in which the European Union and especially Germany are clearly on the side of Ukraine. Despite President Trump's announcements, my condition as a realist political scientist, respectful of geopolitics, leans more towards a reduction than a total withdrawal of Washington's support. But that's how negotiations work.
PROFESSIONAL REMINISCENCES
The topic has concrete professional reminiscences for me. In 1997, I was finishing my second diplomatic assignment in Germany when I had to choose a subject for a research paper required by the Chancellery to promote to minister plenipotentiary. I chose to title it "The Security Policy of the New Germany. Between National Interest and International Responsibility," and it is available for consultation in the ISEN library. I witnessed the fall of the Berlin Wall in 1989 and the second reunification of the country in 1990, which resulted in NATO's first expansion to the East by accepting the reunified country as a member of the alliance under the 2 + 4 Agreement. I emphasized in my paper that Germany should abandon that absurd "collective guilt" for the war and the Holocaust, which held no ground more than forty years after 1945. It had to face the responsibilities imposed by its new condition, always within Europe. However, the country delayed that responsibility until April 9 of this year. The Kohl era (1982-1998), followed by the Merkel era (2005-2021), continued to rest in the comfort of a NATO fully led and supported by the U.S. Today, one of the reforms under consideration is the return to conscription, which the Social Democrats have firmly rejected.
LEADERSHIP AND MEDIA
Friedrich Merz does not wish to hide behind the support of Washington. He understands that his country must assume its leadership, creating the means to do so. The German Parliament approved special funds of around one trillion euros on March 18, with support from the Greens, aimed at financing infrastructure projects and substantial defense expenditures. These funds, which will be obtained through national and foreign borrowing, aim to overcome two consecutive years of recession and confront a defense scenario altered like never before to Europe since World War II by the Russian invasion of Ukraine in February 2022.
Merz must also ensure that the increased defense spending does not undermine the welfare state and environmental expenditures. A concurrent challenge will be to curb the growth of the AfD, which has become Germany's second political force. Almost nothing.
Pedro von Eyken holds a PhD in political science, is a diplomat, and a writer. Former Ambassador of the Argentine Republic to Haiti. He managed the embassy of the same country in Cuba as chargé d'affaires and was Consul in Finland and in Hamburg, Germany, where he also served as Commercial Counselor at the embassy.
He is the author of two books, based on his personal experiences in Cuba ("Witness to a Betrayed Revolution") and Haiti ("Haiti, Between Silence and Hunger").
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