Angela Merkel is now beginning to pay the price for her failure to be honest (until she had no alternative) with German voters about the costs of her unfortunate country’s ever deeper integration within the dysfunctional eurozone. The Daily Telegraph has the details:
[Merkel’s] conservative-liberal coalition was trounced in key regional elections on Sunday amid rising anger over the deal that will cost her country £19 billion. The result stripped her government of its majority in the country’s Bundesrat, or senate, and her ability to pass reforms cutting public spending. Senior figures within her Christian Democrat Party (CDU) said they had lost confidence in her ability to guide the country and called for her to go. Germany’s Der Spiegel magazine said that up to 10 regional Christian Democrat leaders had begun plotting to remove her after her Greece policy “failed its first democratic test”. Willy Wimmer, a veteran CDU politician and a former minister, called for her “immediate resignation”.
Meanwhile, Josef Schlarmann, a regional leader of her centre-right CDU party, accused Mrs Merkel of having a “strategy of doing nothing” to tackle economic reform and doing too little resist the Greek bail-out. The election defeat means the German Chancellor has lost control of the legislative process, allowing Social Democrats and Greens to block reforms aimed at cutting Germany’s high public spending.
Merkel’s defeat is thoroughly deserved, but, considered in a wider context, highly unfortunate. It is in Germany’s best interests for its current government to succeed. It is time for Merkel to make way for someone else within her party to do the job she is no longer has the standing to do.
Meanwhile, note this from the same Daily Telegraph report:
In a development that threatens the City of London with extra regulation, Mr Steinmeier [the Social Democratic leader] demanded tough European laws against “speculators” and for tough regulation of financial markets as the price for opposition support. He told that his party is not against rescuing troubled euro zone countries but will insist on “instruments” to punish the financial institutions the German left blames for crisis.
That’s disingenuous to say the least. The fault for this mess lies not with “speculators,” the City of London, Wall Street, or any of the other villains routinely conjured by the likes of Steinmeier. The real fault lies with the EU institutions, aided and abetted by a large chunk of the European political class (including Germany’s Social Democrats), who designed, implemented, and mismanaged the single currency. If anyone should be “punished,” it is them.