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FT.com / Home UK / UK - Stoiber crisis threatens Merkel's coalition
FT.com / Home UK / UK - Stoiber crisis threatens Merkel's coalition
Edmund Stoiber, one of Germany's political heavyweights for more than a decade, appeared last night to be on the verge of ending his career as conservative Bavarian premier in a political crisis that could influence Angela Merkel's re-election chances as chancellor in 2009.
Mr Stoiber, faced with a rebellion within his usually ultra-loyal Christian Social Union, was expected soon to withdraw his bid to extend his 14 years in office at Ba-varian elections next year.
CSU state legislators, gathered at a party retreat in a former monastery south of Munich, were yesterday evening haggling with their leader over the timing of his departure, party officials said. Mr Stoiber said for the first time on Monday that he was considering retiring.
The political drama - sparked by gaffes by Mr Stoiber and frustration over his leadership style - could damage Ms Merkel if support for the CSU, already hit by the crisis, continues to fall.
Ms Merkel's conservative bloc relies on the CSU as a vote bank. The party regularly gains 60 per cent of votes in Bavaria, one of Germany's most populous states, compared with 30-40 per cent for the chancellor's Christian Democrats elsewhere in the country. CSU support was down to 45 per cent in surveys this week.
"Ms Merkel is politically dependent on the CSU," said Heinrich Oberreuter, CSU expert at Bavaria's Passau university.
The CSU also plays an important role in national politics. While operating only in Bavaria, its free market economic policies and strong social agenda, plus its appeal to rightwing voters, have influenced CDU-led governments and drawn support away from far-right parties.
Prolonged instability in Bavaria could destabiliseMs Merkel's grand coalition between the CDU/CSU and Social Democrats, already struggling to retain unity over controversial health and labour market reforms. SPD leaders attackedMr Stoiber this week in an apparent bid to gain political capital from the crisis.
The CDU called for a "quick resolution", and CSU insiders tipped Günther Beckstein, Bavaria's hardline interior minister, asMr Stoiber's likely successor.
CSU politicians acknowledged that Mr Stoiber, 65, had "lost touch" with voters, after he initially refused to meet a mid-ranking party official who had criticised him and later ignored the mood of the rank and file by saying he wanted to rule Bavaria until 2013.
In a dramatic fall in public support, 69 per cent of Bavarians believe Mr Stoiber should not stand forre-election next year, according to a poll this week.
In the 1990s, Mr Stoiber's populist arch-conservative views drew the nickname "Edmund Thatcher" in reference to the former UK prime minister but now his days are numbered, according to Jürgen Falter of Mainz university. "Despite his successes as Bavarian premier he has now lost his political instincts. His star is falling fast."
Mr Stoiber's likely demise is not all bad news for Ms Merkel. Her own standing within her CDU/CSU alliance would be strengthened by his early exit, given the strained relations between the two.
In 2002 Ms Merkel, then opposition chief and CDU leader, was pushed aside by Mr Stoiber in a battle to take on Gerhard Schröder in national elections. Mr Stoiber lost narrowly to the former chancellor. Then, in 2005, Mr Stoiber embarrassed the CDU/CSU by signalling keenness to become a national government minister, only to withdraw at the last minute. Since then he has repeatedly criticised aspects of Ms Merkel's reform plans.
CSU officials were yesterday shaking their heads over the crisis, wondering how this politically stable corner of Germany could find itself in such a mess.
Unemployment in Bavaria, at 5.9 per cent, is halfthe national average, while the region's economic growth between 2000 and 2005 of 9.3 per cent is three times the national rate.
Party insiders blamedMr Stoiber, pointing to his retreat from Berlin, his unpopular austerity measures in Bavaria since 2003 and his poor crisis management since Christmas.
In a sign yesterday that the CSU infighting was turning nasty, Bild newspaper reported that Horst Seehofer, the federal agriculture minister who is tipped as the next CSU leader, was having an extra-marital affair, which, if true, could damage his standing in strongly Catholic Bavaria. CSU leaders called for a quick return to "dignified politics".
Mr Stoiber came to power in 1993 amid a similar political crisis, also involving a sex scandal, surroundinga contender for the statepremiership.
Copyright The Financial Times Limited 2007
Edmund Stoiber, one of Germany's political heavyweights for more than a decade, appeared last night to be on the verge of ending his career as conservative Bavarian premier in a political crisis that could influence Angela Merkel's re-election chances as chancellor in 2009.
Mr Stoiber, faced with a rebellion within his usually ultra-loyal Christian Social Union, was expected soon to withdraw his bid to extend his 14 years in office at Ba-varian elections next year.
CSU state legislators, gathered at a party retreat in a former monastery south of Munich, were yesterday evening haggling with their leader over the timing of his departure, party officials said. Mr Stoiber said for the first time on Monday that he was considering retiring.
The political drama - sparked by gaffes by Mr Stoiber and frustration over his leadership style - could damage Ms Merkel if support for the CSU, already hit by the crisis, continues to fall.
Ms Merkel's conservative bloc relies on the CSU as a vote bank. The party regularly gains 60 per cent of votes in Bavaria, one of Germany's most populous states, compared with 30-40 per cent for the chancellor's Christian Democrats elsewhere in the country. CSU support was down to 45 per cent in surveys this week.
"Ms Merkel is politically dependent on the CSU," said Heinrich Oberreuter, CSU expert at Bavaria's Passau university.
The CSU also plays an important role in national politics. While operating only in Bavaria, its free market economic policies and strong social agenda, plus its appeal to rightwing voters, have influenced CDU-led governments and drawn support away from far-right parties.
Prolonged instability in Bavaria could destabiliseMs Merkel's grand coalition between the CDU/CSU and Social Democrats, already struggling to retain unity over controversial health and labour market reforms. SPD leaders attackedMr Stoiber this week in an apparent bid to gain political capital from the crisis.
The CDU called for a "quick resolution", and CSU insiders tipped Günther Beckstein, Bavaria's hardline interior minister, asMr Stoiber's likely successor.
CSU politicians acknowledged that Mr Stoiber, 65, had "lost touch" with voters, after he initially refused to meet a mid-ranking party official who had criticised him and later ignored the mood of the rank and file by saying he wanted to rule Bavaria until 2013.
In a dramatic fall in public support, 69 per cent of Bavarians believe Mr Stoiber should not stand forre-election next year, according to a poll this week.
In the 1990s, Mr Stoiber's populist arch-conservative views drew the nickname "Edmund Thatcher" in reference to the former UK prime minister but now his days are numbered, according to Jürgen Falter of Mainz university. "Despite his successes as Bavarian premier he has now lost his political instincts. His star is falling fast."
Mr Stoiber's likely demise is not all bad news for Ms Merkel. Her own standing within her CDU/CSU alliance would be strengthened by his early exit, given the strained relations between the two.
In 2002 Ms Merkel, then opposition chief and CDU leader, was pushed aside by Mr Stoiber in a battle to take on Gerhard Schröder in national elections. Mr Stoiber lost narrowly to the former chancellor. Then, in 2005, Mr Stoiber embarrassed the CDU/CSU by signalling keenness to become a national government minister, only to withdraw at the last minute. Since then he has repeatedly criticised aspects of Ms Merkel's reform plans.
CSU officials were yesterday shaking their heads over the crisis, wondering how this politically stable corner of Germany could find itself in such a mess.
Unemployment in Bavaria, at 5.9 per cent, is halfthe national average, while the region's economic growth between 2000 and 2005 of 9.3 per cent is three times the national rate.
Party insiders blamedMr Stoiber, pointing to his retreat from Berlin, his unpopular austerity measures in Bavaria since 2003 and his poor crisis management since Christmas.
In a sign yesterday that the CSU infighting was turning nasty, Bild newspaper reported that Horst Seehofer, the federal agriculture minister who is tipped as the next CSU leader, was having an extra-marital affair, which, if true, could damage his standing in strongly Catholic Bavaria. CSU leaders called for a quick return to "dignified politics".
Mr Stoiber came to power in 1993 amid a similar political crisis, also involving a sex scandal, surroundinga contender for the statepremiership.
Copyright The Financial Times Limited 2007
Tuesday, January 16, 2007
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Europa machen!
Der BDI stellt mit vorliegendem Arbeitspapier Empfehlungen für zentrale Politikfelder vor, auf denen sich die Bundesregierung sehr konkret für bessere Rahmenbedingungen in der EU einsetzen kann.
Tuesday, January 09, 2007
Sunday, January 07, 2007
FT.com / Comment & analysis / Columnists - Merkel’s misguided transatlantic trade notions
FT.com / Comment & analysis / Columnists - Merkel’s misguided transatlantic trade notions
Remember the Tobin tax on financial transactions? Someone on Europe’s political left proposes it about every 10 years. There is some fuss about it for a short period and then it disappears.
I was reminded of the permanently doomed Tobin tax when I first heard about German plans for a transatlantic free trade agreement last autumn. A decade ago, the European Commission endorsed such a proposal but the French unsurprisingly vetoed it. This year Angela Merkel, the German chancellor, wants to have another go at a transatlantic agreement to harmonise regulation as part of Germany’s presidency of the European Union.
Remember the Tobin tax on financial transactions? Someone on Europe’s political left proposes it about every 10 years. There is some fuss about it for a short period and then it disappears.
I was reminded of the permanently doomed Tobin tax when I first heard about German plans for a transatlantic free trade agreement last autumn. A decade ago, the European Commission endorsed such a proposal but the French unsurprisingly vetoed it. This year Angela Merkel, the German chancellor, wants to have another go at a transatlantic agreement to harmonise regulation as part of Germany’s presidency of the European Union.
FT.com / Comment & analysis / Columnists - Merkel’s misguided transatlantic trade notions
FT.com / Comment & analysis / Columnists - Merkel’s misguided transatlantic trade notions
Merkel’s misguided transatlantic trade notions
By Wolfgang Munchau
Published: January 7 2007 18:33 | Last updated: January 7 2007 18:33
Remember the Tobin tax on financial transactions? Someone on Europe’s political left proposes it about every 10 years. There is some fuss about it for a short period and then it disappears.
I was reminded of the permanently doomed Tobin tax when I first heard about German plans for a transatlantic free trade agreement last autumn. A decade ago, the European Commission endorsed such a proposal but the French unsurprisingly vetoed it. This year Angela Merkel, the German chancellor, wants to have another go at a transatlantic agreement to harmonise regulation as part of Germany’s presidency of the European Union.
There is nothing wrong with transatlantic free trade in theory, if it were to cut regulation and facilitate market access by third countries. But this is not the intention here. The EU and the US are talking about a treaty designed by lobbyists. Furthermore, it would suck out what little momentum is left in the Doha round of multilateral trade negotiations.
Free trade benefits consumers – and societies at large. But what consumer benefits should we expect from Ms Merkel’s desired transatlantic deal?
When it comes to manufactured imports, the EU is generally more protectionist than the US. It is much cheaper, for example, to buy a car in the US than in the EU. A 2003 study by Scott Bradford in the Review of Economics and Statistics found that for cars, average factory-gate prices in Belgium, the Netherlands, Germany and the UK were 69 per cent above world prices. Travellers from Europe to the US also find many retail prices in the US are about half of what they are in the EU.
Such huge price gaps cannot be explained away by currency movements or differences in sales taxes or retail distribution systems. Behind the bulk of these price differences lies regulatory red tape in the EU, aimed at protecting domestic manufacturers. If you want a rational explanation of why Italy and Germany have such large manufacturing sectors compared with other industrialised nations, this is surely part of the story.
Would mutual recognition of technical standards in the car industry, which Ms Merkel is calling for, lead to lower prices in the EU or to higher prices in the US? Probably neither.
So what are we going to get? Ms Merkel said herself that she hoped to make some headway on discussions about intellectual property rights and in facilitating the delisting of European companies that no longer wanted a US stock exchange quotation. The Germans are also pushing for the global regulation of hedge funds, which have attracted bad publicity in the German press.
Whatever agreement the US and the EU might come up with, it would serve the interest of at least some producer lobbies. I predict that the US and the EU will not be able to decide on a single measure that would benefit consumers. No prices will come down as a result of such a treaty. No new products will be made available. Can you really imagine a deal that would deliver US-style, 30-year, interest-only mortgages in Italy or Germany?
If Ms Merkel really wanted to benefit consumers, she would need no bilateral trade deal. The best policy would be to complete the EU’s own internal single market. The EU should cut regulation that is aimed purely at discriminating against outsiders. The problem is that Germany, France and Italy are not currently prepared to endorse such policies, either at home or at EU level.
Instead, Ms Merkel has overloaded Germany’s EU presidency with a whole series of big-ticket items – ranging from saving the EU constitution to energy market harmonisation.
As far as the constitution is concerned, Germany has not yet begun to develop an intelligent strategy to help the French and the Dutch to ratify the treaty without sacrificing the subtle political compromises that gave rise to the existing text. German efforts are mainly procedural so far. Sherpas are talking to sherpas. What we are likely to get by the end of the presidency in June is an agreement for the sherpas to continue talking and maybe for others to join in the conversation.
The creation of a single European market in energy would have been worthwhile but it faces formidable obstacles. From an economic point of view, energy is one of those markets best regulated at EU level – as opposed to agriculture, for example. Meaningful progress would, however, require a much bigger effort than Germany’s multi-theme EU presidency promises to deliver.
Indeed, Germany itself has been resisting both the centralisation of energy regulation and an unbundling of transmission networks and power production, while at the same pursuing its own cosy bilateral deals with Russia.
The EU’s persistent failure to solve its collective action problem in the area of energy is another example of the overwhelming power of producer interests – and, by failing to create an efficient energy market, has contributed to the rise in integration fatigue among European citizens.
Europe needs to wean itself off its producer lobbies. This is going to be the big challenge in the next few decades. It does not need a wrong-headed bilateral treaty. The good news is that such a rotten trade deal will prove elusive – just like the Tobin tax.
munchau@eurointelligence.com
Copyright The Financial Times Limited 2007
Merkel’s misguided transatlantic trade notions
By Wolfgang Munchau
Published: January 7 2007 18:33 | Last updated: January 7 2007 18:33
Remember the Tobin tax on financial transactions? Someone on Europe’s political left proposes it about every 10 years. There is some fuss about it for a short period and then it disappears.
I was reminded of the permanently doomed Tobin tax when I first heard about German plans for a transatlantic free trade agreement last autumn. A decade ago, the European Commission endorsed such a proposal but the French unsurprisingly vetoed it. This year Angela Merkel, the German chancellor, wants to have another go at a transatlantic agreement to harmonise regulation as part of Germany’s presidency of the European Union.
There is nothing wrong with transatlantic free trade in theory, if it were to cut regulation and facilitate market access by third countries. But this is not the intention here. The EU and the US are talking about a treaty designed by lobbyists. Furthermore, it would suck out what little momentum is left in the Doha round of multilateral trade negotiations.
Free trade benefits consumers – and societies at large. But what consumer benefits should we expect from Ms Merkel’s desired transatlantic deal?
When it comes to manufactured imports, the EU is generally more protectionist than the US. It is much cheaper, for example, to buy a car in the US than in the EU. A 2003 study by Scott Bradford in the Review of Economics and Statistics found that for cars, average factory-gate prices in Belgium, the Netherlands, Germany and the UK were 69 per cent above world prices. Travellers from Europe to the US also find many retail prices in the US are about half of what they are in the EU.
Such huge price gaps cannot be explained away by currency movements or differences in sales taxes or retail distribution systems. Behind the bulk of these price differences lies regulatory red tape in the EU, aimed at protecting domestic manufacturers. If you want a rational explanation of why Italy and Germany have such large manufacturing sectors compared with other industrialised nations, this is surely part of the story.
Would mutual recognition of technical standards in the car industry, which Ms Merkel is calling for, lead to lower prices in the EU or to higher prices in the US? Probably neither.
So what are we going to get? Ms Merkel said herself that she hoped to make some headway on discussions about intellectual property rights and in facilitating the delisting of European companies that no longer wanted a US stock exchange quotation. The Germans are also pushing for the global regulation of hedge funds, which have attracted bad publicity in the German press.
Whatever agreement the US and the EU might come up with, it would serve the interest of at least some producer lobbies. I predict that the US and the EU will not be able to decide on a single measure that would benefit consumers. No prices will come down as a result of such a treaty. No new products will be made available. Can you really imagine a deal that would deliver US-style, 30-year, interest-only mortgages in Italy or Germany?
If Ms Merkel really wanted to benefit consumers, she would need no bilateral trade deal. The best policy would be to complete the EU’s own internal single market. The EU should cut regulation that is aimed purely at discriminating against outsiders. The problem is that Germany, France and Italy are not currently prepared to endorse such policies, either at home or at EU level.
Instead, Ms Merkel has overloaded Germany’s EU presidency with a whole series of big-ticket items – ranging from saving the EU constitution to energy market harmonisation.
As far as the constitution is concerned, Germany has not yet begun to develop an intelligent strategy to help the French and the Dutch to ratify the treaty without sacrificing the subtle political compromises that gave rise to the existing text. German efforts are mainly procedural so far. Sherpas are talking to sherpas. What we are likely to get by the end of the presidency in June is an agreement for the sherpas to continue talking and maybe for others to join in the conversation.
The creation of a single European market in energy would have been worthwhile but it faces formidable obstacles. From an economic point of view, energy is one of those markets best regulated at EU level – as opposed to agriculture, for example. Meaningful progress would, however, require a much bigger effort than Germany’s multi-theme EU presidency promises to deliver.
Indeed, Germany itself has been resisting both the centralisation of energy regulation and an unbundling of transmission networks and power production, while at the same pursuing its own cosy bilateral deals with Russia.
The EU’s persistent failure to solve its collective action problem in the area of energy is another example of the overwhelming power of producer interests – and, by failing to create an efficient energy market, has contributed to the rise in integration fatigue among European citizens.
Europe needs to wean itself off its producer lobbies. This is going to be the big challenge in the next few decades. It does not need a wrong-headed bilateral treaty. The good news is that such a rotten trade deal will prove elusive – just like the Tobin tax.
munchau@eurointelligence.com
Copyright The Financial Times Limited 2007
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