Don’t expect any bold reforms in Europe, or a greater international role for Berlin after Angela Merkel’s muddling-through strategy won the day, writes Richard Deeg. Barack Obama will still be happy with the outcome.
Richard Deeg is professor and chair of the department of political science at Temple University in Philadelphia, Pennsylvannia.
Angela Merkel's victory means both policy continuity and institutional stasis for Europe. Her European policy of fiscal austerity and debt sharing on German terms will undoubtedly continue. Merkel's, and by extension Europe's, primary strategy now is to wait for economic growth to return and slowly ease the debt burden and unemployment crisis in southern Europe.
This is a scenario that now seems more likely than not, though continued global economic recovery is hardly assured. Moreover, any return to growth in Europe is likely to be slow, shallow and insufficient to dramatically improve the fiscal picture in the South.
Talk of fiscal and banking union will continue, but unless there is a renewal of the euro crisis - or more likely a political crisis arising from the pain of austerity - there will be only modest reforms on these fronts, particularly so long as Merkel is chancellor.
No grand reform
She has made it clear that she is not interested in grand institutional reforms, whether domestic or European. Indeed, her approach of muddling through - finding immediate fixes as problems appear - staved off the collapse of the euro while also enhancing her popularity at home. The lesson for Chancellor Merkel is surely to follow this same path going forward, and the expected coalition with the Social Democrats seems unlikely to change Berlin's basic European policy.
The problem for Europe is that Merkel's muddling through strategy will likely suffice for only a few more years (and that assumes growth will resume): The eurozone's deep structural and political problems will eventually need bolder reforms if it is to hold together in current form, and this seems unlikely to happen so long as Merkel remains Chancellor.
Like most Germans, most policymakers in Washington credit Merkel for steering Europe out of its crisis and therefore regard her as America's best friend in Europe. And Obama needs all the friends he can find right now since he is fighting on two fronts and cannot manage a third.
On one front, Obama is deeply enmeshed in long-running ideological and budgetary battles with the Republican Party. The current showdown over extending the American federal government's borrowing capacity is just the latest battle in a protracted political war between the Democrats and the right wing of the Republican Party. The fact that the Republican right wing is willing to risk the creditworthiness of the United States in its efforts to rollback Obama's healthcare reform reveals the bitter and all-consuming nature of this fight.
Protect Obama's economic flank
The US economic recovery is proceeding steadily but much too slowly for the broader public and the politicians. Given the inability of US leaders to agree on just about any economic policy, the US can ill-afford to have its economy roiled by another euro crisis. While the United States would certainly welcome a return to growth in Europe in order to support its own sluggish recovery, at the moment Washington only cares that no troubles come its way from across the Atlantic. In short, Obama is looking to Merkel to protect his economic flank, that is, to keep the problems of Europe from becoming American problems.
The second major political front for Obama is foreign affairs, but here the fixation is on Syria and Iran. In neither foreign policy problem has Germany been a major player (though more so with Iran), so Merkel's continuation as Chancellor brings no significant relief for America's major foreign policy headaches.
Put another way, there is little reason to think that Germany under Merkel will increase its foreign affairs engagements beyond Europe, at least directly. That said, Germany's elevated power position within Europe is likely to last for a while, and this means that German influence over the European Union's international role is likely to grow as well. Though here too this is likely to mean more continuity than change in the EU's foreign policy which has traditionally focused on promoting economic globalization while eschewing military engagements or geopolitical power politics.
Boost for trade pact
This should be good news for moving forward on the Transatlantic Trade and Investment Partnership (TTIP). If realized, the TTIP would bring down many of the non-tariff barriers that inhibit trade between the worlds' two largest economies and potentially create a transatlantic Single Market. Germany, like the US, has long been staunchly in favor of open trade. Given the continued preeminence of both countries as some of the world's top exporters, along with the recent surge of manufacturing in the United States, we can expect both to push harder to get this agreement done.
That said, in other areas of economic policy there are major philosophical differences between the US and Germany, such as regarding environmental, consumer and financial regulation, that may ultimately undermine such a far-reaching economic pact.
At the moment, the contrast between American and German politics could hardly be more stark: Merkel's centrism and pragmatism have effectively pulled a large majority of voters to the center and created a broadly satisfied electorate, while domestic politics in the United States could hardly be more polarized and dysfunctional. Though American political leaders have rarely looked abroad for lessons in how to govern effectively and democratically, they would do well to look closer at Germany in the Merkel era.