- So now. Angela Merkel approves joint EU government bonds. This is envisaged by a Franco-German reconstruction fund. Europe is to fight the corona crisis with a total of 500 billion euros.
- Merkel was long regarded as a savings champion in southern Europe, and was sometimes disparaged as a “female Hitler”.
- Pro-Europeans are now exuberantly celebrating Merkel’s change. However, the Chancellor also knows. It takes a high risk. An analysis.
Then Emmanuel Macron beamed. There he was again the “dear Angela Merkel”. And if the two of them had not appeared eleven hours away from each other on this memorable Monday afternoon, one in Paris, the other in Berlin, only connected by video, then the French President would surely have taken the German Chancellor back as before. With kisses, kisses, loving hugs.
Germany and France are moving forward together again. A future that for Macron like Merkel must promise one thing above all: more Europe. That is why they presented their plan for a European reconstruction fund on Monday, amounting to 500 billion euros, financed with joint EU bonds. A milestone.
More Europe? Macron pushed, Merkel said nothing
Macron was already demanding more Europe when he entered the French presidential race at the age of 38 and with rather moderate chances. He then asked for more Europe, freshly elected, in a big speech at the historic University of Sorbonne. And he asked for more Europe when he received the Charlemagne Prize in Aachen months later.
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Merkel listened to all of this – and said nothing. Until she was silent. “I understand your desire for disruptive politics,” Macron said angrily at a dinner on November 10, 2019 at Bellevue Palace, the New York Times reported. “But I’m tired of picking up the pieces. Again and again I have to glue together the cups that you broke so that we can sit down and have a cup of tea together. “And now? Macron and Merkel threw the cup together. Can you pick up the pieces again?
Macron should have fewer problems in his camp, that of the financially clammy and particularly severely corona-affected Southerners. Spain and Italy, which most vehemently called for a European aid fund, basically welcomed the deal.
Merkel on the trail of former great chancellors?
It should be much more difficult for Merkel. It was she who had previously stood for strict financial and austerity policies. It was she who felt the anger of Greek, Italian and Cypriot citizens even during the euro crisis. And it was she who was sometimes disparaged as a “female Hitler”.
Merkel has now given in to pressure for common European bonds. She even agreed that countries no longer have to repay funds from the fund. Has Merkel ranked alongside other pro-European chancellors such as Konrad Adenauer, Willy Brandt and Helmut Kohl, like the Europa magazine “Politico” raved about? Has she finally secured a place in the pantheon of the great European drivers? Is she finally a “great European”?
According to the German-French plan, the EU Commission can raise up to 500 billion euros in joint bonds. In the end, all European countries should repay the money through the common EU budget and over a very long period. The largest economy in Europe, Germany, has to pay the most, namely around 27 percent. The Bundestag would have to approve the authorization of the EU Commission for the bonds.
Merkel could be tough on old opponents
The critics quickly gathered, especially Sebastian Kurz. On Monday evening, Austria’s chancellor drummed up other economically strong and so-called “economical” northern countries such as the Netherlands and Sweden. Together they warned of communalizing debts. Together they insisted on issuing repayable loans instead of non-repayable grants.
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In the past, short has fallen into the role of the conservative critic of Merkel. In the refugee crisis he made life difficult for the Chancellor, at that time as Foreign Minister. With Merkel, he had a real competition to see who would end the crisis faster. He with the closure of the Balkan route or she with the EU-Turkey deal.
Even then, Kurz was also troubled by Merkel poaching in the Chancellor’s very own territory, in the CDU and CSU. The Bavarian CSU, in particular, was pretty close behind the Austrian position.
Now these ditches could open up again. Already in the early 2010s, parts of the Union were allergic to credit aid for over-indebted euro countries. And now? “I’m not so enthusiastic,” said Hans Michelbach, an influential CSU member of the Bundestag, about the Merkel-Macron project. “The plan was not even partially discussed or even agreed beforehand.”
But maybe things are different this time. Merkel should help that potential fund beneficiaries like Italy and Spain are not in need of lazy banks, financial cheating and lavish spending, but of a deadly virus that paralyzed the global economy.
The crisis also shows how important European suppliers and customers are for a worldwide, export-oriented German economy. It is now often said that helping them to get back on their feet is also in the German interest. The same should apply to Austria. Italy, for example, is the second most important trading partner of the Alpine Republic.
“Extremely good”: Merz jumps in with Merkel
“Extremely good,” is why Friedrich Merz also finds the plan. The idiosyncratic economic politician, who wants to become CDU leader this year, has so far not really been noticed as a Merkel flatterer.
After almost 15 years as chancellor, Merkel knows that her last big fight may not be easy, that nothing has been decided yet. There are not only CDU and CSU that could make it difficult for them. There are also the FDP and AfD, which Merkel are already accusing of a “180-degree turn” and “word break”.
There is also not only Kurz and his northern allies who eyed the project suspiciously. Eastern European EU skeptics such as Hungary’s Prime Minister Viktor Orbán could also haggle over EU funds for their own sake and block the plan.
Nevertheless, Merkel made the decision. And probably not for tactical reasons, as she was so often accused of in previous major decisions. Merkel wants to quit as chancellor in 2021. She no longer has to worry about re-election opportunities. Rather, she is convinced that Europe must now act together, the Chancellor emphasized on Monday. “The nation state alone has no future.”