It was no great surprise that Merkel’s cabinet yesterday approved the expanded Eurozone bailout fund. The greater drama will be in the German parliament, where a vote in the lower house (the Bundestag) on this matter is now scheduled for September 29th. Merkel’s problem is that discontent within her coalition is growing over the deal. Theoretically, there may be enough rebels to force her to rely on opposition votes to get it passed. That’s doable (easily so: the parties on the left are even more euro-federalist than those on the right), but were that to happen, it would shake the governing coalition, and maybe even lead to an early election. That’s a contest the coalition could well lose, and do so in circumstances that could be truly disastrous for the its smallest partner (the classical liberals of the FDP). The FDP has lost so much support that it now risks falling below the 5% threshold it needs to get into parliament. All this leaves the rebels with a dilemma somewhat akin to that faced by the British anti-Maastricht rebels who did so much to destroy John Major’s Conservative government in the 1990s. They won the argument, but, by paving the way for the election of the disastrously europhiliac Tony Blair, they lost the war. So it is in Germany. If rebels opposed to the endless euro bailouts bring down Merkel, the likely new government will be even more willing to loot taxpayers in the name of a dishonest, dangerous and disastrous monetary experiment..
This reflects a paradox reflected by “German Reader” in the comments here a few days back, and, specifically, this:
[T]here are the polls you mention showing a lot of popular unease about the current situation in Europe and the prospect of further rescue packages. Then again, those same polls show no traction for anti-European parties whatsoever; quite the opposite. I would conclude that while Germans don’t like bailouts (who does?), they are not terribly agitated about them either. Some see them as a price worth paying for what European integration brought our country – the longest peacetime in recent memory and a huge market and favorable playing field for German industry. Others are fearful of the perils that European disintegration might bring. Anyway, there is no tea party in Germany and we are not likely to see one in the near future.
German Reader may be too sanguine about the polling data, as this Reuters report shows. Read the whole thing for the wider background, but note, in particular, this:
A poll presented to senior center-right MPs suggested that ever more Germans are doubting the euro, with 76 percent saying they had little or no faith in the currency, up from 71 percent in a survey by Allensbach pollsters two months ago.
German Reader is, however, right to highlight the fact that there is no mainstream party that reflects this popular unease (which, it should be stressed, is with the euro, rather than the EU itself). That that is the case is a profoundly unhealthy state of affairs, corrosive both of democracy and the ability to manage the single currency. Some German politicians have now belatedly caught on to this uncomfortable reality. That’s why they are insisting that the bailout fund (the EFSF) be subject to higher levels of parliamentary scrutiny in the future. Reuters quotes a political scientist at Berlin’s Free University, as saying that events in Germany have revealed that ”governments in the Eurozone can no longer assume they can take decisions that affect their citizens very closely without consulting their parliaments.” That’s true, and that’s good. Democratic politics are returning to the technocratic territories of the Eurozone. The question now is whether Brussels can shut them down again, and, if it does, what the consequences will be.