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Why We're Ungovernable: Germany's Merkel Demoted To Figurehead

Authored by John Rubino via DollarCollapse.com,

You don’t see “Germany” and “ungovernable” in the same headline very often. But that might be about to change, as Chancellor Angela Merkel, for the past decade the central pillar of Europe’s Establishment, loses influence both at home and abroad.

First came a wave of populist gains across Europe (read anti-euro, anti-austerity, anti-immigration), culminating with an actual victory in Italy’s most recent election. Then came the rise of Germany’s own populist movement, Alternative for Germany, or AfD, which has become a legitimate power in some parts of the country.

And now Mekel has apparently lost control of her cabinet. From yesterday’s New York Times:

As the Far Right Gains in Germany, Merkel Weakens

BERLIN — For nearly two weeks Chancellor Angela Merkel tried to find a way to fire her own domestic intelligence chief, a man who had publicly contradicted her and become the darling of the far right for questioning the authenticity of a video showing angry white men chasing an immigrant.

But she couldn’t — not without risking the collapse of her fragile government.

Hans-Georg Maassen, the rebellious spy, has powerful friends, among them his immediate boss, Interior Minister Horst Seehofer, the leader of the Bavarian conservatives and one of Ms. Merkel’s pricklier coalition partners.

Instead of firing Mr. Maassen, Ms. Merkel had to allow Mr. Seehofer to promote him. Mr. Maassen will get a pay raise of about 2,500 euros a month.

“You couldn’t make it up,” said Andrea Römmele, a professor of political science at the Hertie School of Governance in Berlin.

If the episode shows anything, analysts said in the aftermath, it is that Ms. Merkel is growing more feeble even as the far right — in Parliament, online and on the streets — is getting stronger.

The chancellor’s inability to act decisively has exposed the spectacular weakening of a leader who not long ago was seen as a key defender of the liberal order. That view was cemented by her decision in 2015 to welcome to Germany hundreds of thousands of migrants from the Middle East, Africa and elsewhere who were not wanted by neighboring European countries.

Three years later, as a nationalist and populist backlash is spreading, Ms. Merkel has so little authority left that many here wonder how much longer she can last.

“Merkel was an authority at home and abroad,” Ms. Römmele said. “She stood up to Trump, negotiated peace deals and passed the laws she wanted to pass. She was the queen of consensus.”

“Now she can’t even fire the head of an agency,” Ms. Römmele added. Six months into her fourth term, “she has become a lame duck.”

Ever since an inconclusive election last September, Ms. Merkel has stumbled from one political crisis to another. In the election, her party saw a significant decline in voter support and a far-right party, the Alternative for Germany, entered Parliament for the first time in more than 60 years.

In the end it took six months to form a government, an unwieldy one straddling left and right, with Ms. Merkel perched precariously at its center.

That government almost fell apart in the summer, when Mr. Seehofer, the interior minister, challenged the chancellor over her immigration policies and demanded the reintroduction of border controls with Austria.

That earlier episode was just a foretaste of how the Alternative for Germany, or AfD, has been using its toehold in Parliament — where it now has the megaphone of being the leading opposition party — to reorder German politics.

Mr. Seehofer’s party, the Christian Social Union, has been veering sharply to the right ahead of state elections in Bavaria next month, trying to fend off a challenge from the AfD, which is on course to deprive it of its absolute majority.

Where to now? The NYT article’s last sentence gives a clue:

“Mr. Seehofer’s party, [Merkel’s coalition partner] the Christian Social Union, has been veering sharply to the right ahead of state elections in Bavaria next month, trying to fend off a challenge from the AfD, which is on course to deprive it of its absolute majority.”

Centrist coalitions faced with a non-mainstream challenge have two choices: Either bring in new partners from the other end of the spectrum (in this case the left) or co-opt the right wing populists by adopting some of the latter’s policies. The Christian Social Union has apparently chosen door number two.

That pulls the central government towards the populists’ point of view, which might be healthy, since unlimited immigration is clearly failing. Or it might be destabilizing since a dominant, pro-European-integration Germany is all that’s keeping the “European Project” on track at the moment.

And let’s not forget that all this is happening in the context of soaring debt and peripheral country banking crises (Italian banks only exist because of ongoing ECB bailouts while Spain’s banks are on the hook for 5% of GDP lent to Turkey) that could easily spread to the core. The current global expansion, meanwhile, is now the longest on record and ought therefore to end shortly.

In other words, big, probably negative changes are coming even with a stable German government. Let Germany descend into political turmoil and the difficult becomes impossible. Get ready for a massive euro devaluation.

Some other posts in this series are here.