What Europe expects of postMerkel Germany by Christian Odendahl
Europe expects Germany’s likely new Chancellor, Olaf Scholz, to keep Europe united while adding more strategic vision to fight climate change, transform the European economy and navigate global politics. The German election ended as the polls had predicted: Olaf Scholz and his Social Democrats (SPD) came out strongest, and will try to form a government with the Greens and the socially liberal but economically conservative Free Democrats (FDP). It will take time and some drama, but in the end the three parties will agree a ‘traffic light coalition’ (so called because of each party’s colour). It is hard to argue that Armin Laschet and his Christian Democrats (CDU) have a popular mandate to form a government when they achieved a historically bad result, secured fewer seats than the SPD and have a leader who is personally a lot less popular that Scholz. Europe is watching in nervous expectation. While European issues played almost no role in the election campaign, the next government will face an almost endless list of issues to resolve at the European level, including badly needed reforms to Europe’s fiscal rules; the ‘Fit for 55’ package to achieve Europe’s climate goals including the controversial carbon border adjustment mechanism; debates on how to tax and regulate digital giants; foreign policy challenges in relations with Russia, the Western Balkans and Turkey; and a common European strategy vis-à-vis China on economic, foreign and security policy.
Germany faces three types of European expectations. The first is that Berlin will remain a reliable partner. Germany’s most important role in Europe is forging compromises between competing interests and keeping Europe united. Germany does not see the EU in transactional terms, nor as a vehicle for enhancing German power, but as the core of its national interest. Brexit has only strengthened Germany’s role as compromise builder: smaller North-Western states and Central and Eastern European governments previously relied on Britain to take their interests into account; Berlin must now shoulder more of that responsibility. Angela Merkel was a gifted negotiator and tactician, briefed on every detail of critical dossiers, aiming to find solutions that everyone – herself included – could live with. Every German chancellor must play that role. Scholz is likely to do it well, given his political experience and sober persona, even though it will take time for him to acquire Merkel’s political standing among European leaders. The second expectation is that Berlin will lead in modernising the European economy and fighting climate change. The worst parts of Merkel’s legacy are the missed opportunities in the 2010s to bring Europe back to full employment and to use low interest rates to