Generally, media have failed to analyse why the result of German elections is the worst possible. Merkel is not a winner, but a leader now in a very fragile position, who will have to make many compromises and pay now for her mistakes. Let us make at least the most important four points of analysis.
Point One: the decline of traditional parties.
Now for some years, the traditional parties who have run their countries since the end of the Second World War are becoming irrelevant. The last French elections saw the practical collapse of the Socialist and Gaullist parties, with the arrival of a totally unknown candidate, Macron, who has now 60% of the seats in the Parliament. The same happened earlier in the Austrian presidential elections.
This process has now started in Germany. Merkel's party, the CDU, had the worst performance since its creation. And its sister party, CSU (the Bavarian CDU) has lost a staggering million votes. The same has happened to the SPD, who saw the lowest approval since modern times. The two parties, who had in the last elections 67.2% of the votes, now got just 53.2%. And, as everywhere else, the missing votes went to parties who were recipients of discontent, and the desire to punish the establishment was evident. Linke, a radical left-wing party, got an additional 0.6%, by voters rejecting the increasing social inequality, and did not believe that SPD would be different from the CDU on this issue. The Green got an additional 0.5%, by those who were incensed by Merkel's promise to increase defence costs to 2% of GDP, to please Trump.
But the big winner was the AfD, an extreme right wing party, who was the conduit for people's dissatisfaction on immigrants, on the European Union, and other nationalist and populist themes. AfD got 12.6 % of the votes, becoming the third party and with 96 members of parliament. AfD got 980.000 votes from the CDU, 470.000 from the SPD, 400.000 votes from the Linke. But, much more importantly, 1,200.000 votes from people who did not vote in the last elections. In a poll, 60% of them said that they were “disappointed with the present political situation'. At the same time the poll company Infratest Dimap, found out that 84% considered Germany’s economic situation “good”, when this was 74% four years ago, and a mere 19% eight years ago. The elections were not clearly on economy, but about immigration and the loss of German identity.
Therefore, Macron's victory over Le Pen is not the end of the populist wave. And few doubt that if Macron loses his appeal (as it is already happening), and his fight for social reforms is stopped by mass manifestations, Le Pen would win the next elections. And the antisystem parties all over Europe did not win in the last elections, but they did not lose eithe. Now they are the needle of the balance in all Nordic countries, and can declare, like Farage , the founder of the anti-Europe party UKIP, when he lost in the last British election: it is irrelevant, our message has become part of all the political system. And Brexit was the best example that he was right…all parties in the Nordic countries had to incorporate points of the populist, especially on immigration.
It has been generally ignored that it is the middle class, the main actor in this change. Social inequality in Europe has constantly grown, and many from the middle class are impoverished or afraid. Germany is a good example. While unemployment went down with Merkel from 11% to 3.8%, those close to the poverty line went from 11% to 17% of the total. Merkel went from a public deficit of 100 billion dollars, to a surplus of 20 billion, but at the same time poverty doubled to 10%, and there are 2 million people who have two jobs to help them reach the end of the month. And the pensioners who live below the poverty line , have increased by 30%. A full 15.7% of Germans now live under the poverty line. Of these, nearly 3 million are children.
Are the fears and frustrations of the middle class only who have pushed Brexit and Trump ? The economist Homi Kharas, specialized on the middle class, considers that 43% of the world population (some 3.200 million) now form the world middle class. It grows every year by 160 million. What is common to them is that especially the lower middle class have high expectations from the government and they put economic growth before anything else. They are helped by the Internet and social media, to be aware of their rights, and of the risks. In rich countries, massive education helps awareness. In developing countries, the pressure on governments is equally strong. The best example is China. Between 2002 and 2011, there has been a strong increase in protests and loss of trust in the public institution, despite a period of economic growth. The fact is that to keep growth and social justice together, you need resources. And this a problem for the left. Its genetic message is redistribution and participation. How to do this when we are in a world of diminishing resources?
Point Two: The antisystem becomes an entrenched system.
Bill Emmot, the ex-director of the Economist, has written: “we live in a period of political turmoil. Parties less than a year old have taken power in France and in the megalopolis of Tokyo. A party less than five years old is heading the polls in Italy. The White House is hosting a billionaire who never had any political experience. And we should add that before the crisis of 2009, no populist or xenophobe party was represented in Parliament.
We have therefore little experience on how antiparty system behaves when they are in power. But if we look at the United States, Poland and Hungary, clearly they are trying to put under control the public institutions, not because of the values of democracy that brought them to power, but a new campaign on fears and greed: globalization, immigration, automatization’s displacement of jobs, inequality, racism, and “my country first”. And the antisystem parties, who all have sent congratulatory message to the AfD, look to Putin as the political model to follow (except Poland for obvious reasons). But Urban of Hungary speaks openly of “illiberal democracy” as the main reason to combat the EU (and Poland of values of Catholicism against a secular Europe).
It is legitimate then to think that when the AfD, Le Pen, and company will come to power, (if the trend toward antisystem is not stopped), we are going to see a serious decline of democracy…also because we have Japan, India, China, Turkey, Philippines, just to name a few, who are nationalists, xenophobe and tend to project their vision, as the Russian hackers did in the last elections.
We must look at the youth’s decline in participation in politics as a new phenomenon extremely worrying. The priorities in budget allocations go increasingly to the older generations, which vote. It is important to note that the large majority of young people do not vote for the antisystem parties, but abstain. If young people did vote, we would not have Brexit and Trump. In the German elections, only 10% of those between 18 and 24 voted for AfD: all other age groups did so, and we must go to the oldest age group, those over 70 years to see a decline, to just 7% of the vote . But 69 per cent of the oldest voted for CDU and SPD, against 41% of the youngest. So, the theory that young people are moving to the right is a myth. They prefer to abstain…but the problem remains. Their abstention is helping both the system to stay, and the antisystem to win. But take Italy for example, run by a centre left party, the PD. They have just approved an incentive for youth unemployment (close to 30%), after giving 30 billion dollars to bail out four regional banks. The antisystem M5S, which is now heading the polls, has made the fight against the financial system a priority. If you were young, educated and unemployed, what would be your choice?
Point Three: German elections are a disaster for Europe.
The appeal of an integrated Europe has been on the wane for a while. It became fashionable to present the European institutions as a bunch of unaccountable bureaucrats, out of touch with reality, intent on discussing the size of tomatoes. In fact, it is the Council of Ministers, formed by representative of the States, who take the decisions: EU can only implement them. But it becomes politically convenient to go back from Brussels and present decisions, especially those unpopular, as a diktat imposed on your country. This, of course, is just one of the many reasons for the decline of Europe as a political project. But is useful to remember this game, because it shows the irresponsibility of the political class. There was never a real unity behind the European project. Every country looked only for dividends, and now, not even for that (as the example of Poland and Hungary, very large recipients show). So, where is Europe heading?
There are in fact three visions of Europe. One is the vision of Juncker, the head of the EU. It calls for strengthening the European institutions, and reinforcing the social goals, until now left behind the economic and commercial priorities. It's not that Juncker is a progressive: he just realizes without doing that, the anti-European parties will have an easier life. His view is of strengthening Europe as a super national entity, with the states conceding more power, for better functioning. Then there is the vision of Macron, who goes in the same direction, but from a country that has always jealously defended its national sovereignty. Yet he realizes that in this competitive world, no European country can go far, and a strong Europe is therefore necessary. Then there is Merkel’s Europe, which is basically toward a federation of countries, where decisions are taken by the states, (with Germany as the strongest), with the EU implementing them. Since Macron came to power, he has been championing the revival of the French-German entente, which is necessary for a viable Europe. Macron and the south of Europe have been asking for socialization of European revenues, so as to sustain the weakest and have a common growth, creating a European Monetary Fund to overcome crisis, a super minister of finance and economy, a common European defence and several social measures to give back faith to the European losers in Europe.
Well, this is exactly what Germany has vetoed every time. Germans do not want to share their revenues with losers. In this debate, there is a strong religious and moral argument: the protestant ethic against catholic culture of easy pardon. Greece was the field to affirm the doctrine of ordo liberalism, the German view of economics, where easy-going and lack of discipline must be punished. This was also a warning to other countries, like Italy, Spain and Portugal. The result of sanctions on Greece, which was just 4% of the European economy, is that after seven years there is at least 20% unemployment, a loss of 25% of the Greek economy, a reduction of the pensions of nearly 40%, and 20% of the population under poverty line. It should not be forgotten that a large component of the bail out loans went first to the banks (mainly German), to pay the large credits they had with the broken Greek state, and not to the citizens. And that now airports and ports are under German administration.
The face of this imposition of austerity, which is a very important component of the anti-European wind, had the face of the implacable and crippled minister of Finance, Schauble. But there was no doubt that he was pro Europe, even if of a Europe based on the German model. But now he has moved to be the President of the Parliament, to leave his place to the chairman of the FPD, the liberal party, Christian Lindner, who is an avowed anti-European. FDP is against the euro, wants Greece out of the Euro, wants a strong policy on refugees: in other words, he is much on the right. Merkel, the extremely prudent Chancellor , will certainly not be able to meet the expectations of Macron and Juncker. Europe will again be on standby. Italy will be probably run by a young Prime Minister (from the antisystem M5S) a totally untested 31 year old, who has announced that he would like to leave the Euro, and limit Brussels power. The tide against Europe has not been stopped at all, contrary to media enthusiasm.
Point Four: Merkel's responsibilities.
There is no doubt that the massive immigration of one million of Syrians, has given a strong weapon to Afd, and the liberals, to help them gain power. But time will prove that it was a wise decision, greeted by the German economy. Statistics show that Immigrants are model citizens, pay their taxes, and bring a net benefit to the country who receives them. Of course, we see only the story of criminals and rapists, that xenophobe parties use with success, because in difficult times to find a scapegoat is easy and convenient. But Merkel just rode the German idiosyncrasy, without doing any statist’s effort to mobilize citizens to a vision. She knows that the secret dream of Germans is to be a Swiss: no participation in the world (other than business), no experiments, no risks. She has become the embodiment of that idiosyncracy - she is glad to be called Mutti, the mother. Other than the immigrants, she took only another risk, which was to abandon nuclear, after the disaster of Fukushima. Therefore, she did nothing to raise the awareness of the citizens on their European responsibilities. She shielded them from any sacrifice for being Europeans, refused any request by the EU, the IMF and the Wold Bank to spend the huge surplus that Germany made with intra-European trade. Her position was: we will keep the money we made with our hard work. And Schauble was just her instrument. Now, as a result of her odd coalition government she will ask the European Central Bank post for a German hawk, Jedemans, from the Bank of Germany: a good company to Christian Lindner. Dark days are coming for Europe; Merkel is the best illustration of the difference between the Germany of Bonn, run by idealist and committed politicians, with the Germany of Berlin, who is just a selfish entity, without vision. And after spending 100 billion a year, for 20 years, East Germany remains hopelessly behind, and it is where AfD took his largest share of votes.
On the night after the elections, the candidate for SPD, Martin Shultz, said looking into her eyes: "Mrs Merkel, you are the great loser. You are the one responsible for the victory of AfD". Let us hope that willingly or not, Mutti will be also the one responsible for the end of the European dream.