Merkel to Fiddle While Europe Burns

Merkel to Fiddle While Europe Burns

This weekend German Chancellor Angela Merkel took a big step towards re-election. In defeating the Social Democrats (SDU) in the important state of North Rhine-Westphalia her Christian Democratic Union (CDU) is now in the driver’s seat for re-election in September.

A year ago, it looked like Merkel was dead-Chancellor-walking as opposition to her immigration policies were boosting Euroskeptic parties like Alternative for Germany (AfD), which crushed the CDU in her home state of Mecklenburg-Vorpommern last September, coming in behind the SDU there.

But, in the past three lead-in elections, the CDU beat the SDU. And yesterday’s defeat was stinging. North Rhine-Westphalia is, traditionally, a SDU stronghold. It was party’s worst showing in history.

And it paves the way for Merkel to remain in power even if she has to shift her coalition around a bit. All of the parties on the German right gained in this election. The CDU and AfD both gained more than 7 points, while the Free Democratic Party (FDP) was up 5 points.

Merkel was supposed to be facing stiff opposition from former European Commission President Martin Schultz, but that has faded quickly. Schultz is an odious EU technocrat first and foremost. And this election makes it clear that most Germans want Mrs. Merkel to continue pressing their agenda in Brussels as opposed to him.

His statement after the loss is typical of a poor leader, “I haven’t even been head of the SPD for 100 days, I’m not a magician.” Leaders lead by taking responsibility. If he continues this way his only political friend will be the equally-feckless Jeremy Corbyn head of the U.K.’s Labour Party.

Moreover, the collapse of support for AfD, after spiking last year, is a mirror of what is happening in Great Britain, post-Brexit. The UK Independence Party did its job to create Brexit, but it’s the Tories that will lead the country through the negotiations with the EU.

In other words, the dominant center-right party, in this case the CDU, is the first choice to lead Germany in its showdown with their European opposition in the U.K. and eastern Europe, i.e. Hungary and Poland.

This is why Theresa May called for snap elections next month, to shore up the Tories’ position and square off, united, against Mrs. Merkel.

The problem with all of this is that with this kind of democratic mandate it only raises the odds of an ugly showdown across Europe. Merkel will now press even harder austerity in any debt negotiations with Greece now and Italy later.

Hungary’s President, Viktor Orban, is on a collision course with Merkel over his border wall, now live and guarded by machine guns. And, apparently, it has seen border crossings drop by 97% in the first day.

Poland’s Law and Justice party are also under Merkel’s microscope, after defying the EU over pro-EU legislative and media bias which resulted in the EU threatening sanctions. Poland is now completely opposed to the proposed ‘multi-speed’ Europe discussed at the recent EU summit.

These countries are leading a revolt in eastern Europe that Merkel will feel safer in cracking down on thanks to yesterday’s results. Both are EU members but are not part of the Euro-zone, retaining their national currencies.

And this gives them a big advantage to resisting the EU by setting their own monetary policy. It also puts them in the position to reposition themselves with Russia before the rest of the continent.

And the key figure here is Orban in Hungary. He met with Russian President Vladimir Putin in February and agreed on further economic cooperation, including a €10 billion ($11 billion) expansion to the Paks nuclear power plant. Putin knows that Hungary is an important thorn in Brussels’ side, defying sacred EU policy while remaining financially independent.

The turn to the right in Germany is a result of increased security issues arising directly from Mrs. Merkel’s migrant policies. But, old enmities between European tribes runs deep and, frankly, Merkel and her attack-dog Finance Minister Wolfgang Schauble, use these tribal divisions cynically to drive EU economic policy that benefits Germans at the expense of the lazy, shiftless Club Med countries.

And that’s why, in the end, Merkel’s re-election in September will be the canary in the EU’s coal mine. It is Merkel’s insistence on punitive measures, her lack of economic understanding and the overly-strong euro that has brought the continent to this crisis point.

Her re-election as Germany’s Chancellor will ensure that nothing changes.

This weekend’s North Rhine-Westphalia result along with boy-toy Emmanuel Macron’s win in France lit a fire that Merkel, to her last breath, will deny starting, fiddling with rules while the continent burns.

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About the Author

Tom Luongo
Tom Luongo is a contributor at Newsmax Media for Financial Intelligence Report. He also writes regularly at Seeking Alpha and Russia Insider. Tom is a professional chemist, amateur dairy goat farmer and outspoken Austrian Economist. You can follow him at: http://Twitter: