Yesterday saw the first clash in the German parliament between Chancellor Merkel and the newly designated “chancellor candidate” of the SPD, Peer Steinbrück. The occasion was a debate about the euro crisis. The new Merkel was on display. Solidarity was writ large. Greece, so her fervent wish, should stay in the euro area. The currency union is a symbol of the Nobel-prize-winning good that is European integration.
Steinbrück was reasonably effective. In essence he said that if the new Merkel had been in evidence back in early 2010 the whole crisis would not have blown out of control. He was right to argue that. It is what many progressive economists said at the time, publicly and also ‘privately’ to the SPD.
It was good advice the party just didn’t take. The SPD failed to take a clear and consistent line in the months that followed. Most fatefully of all it allowed itself to be an accessory to the blunder of insisting on the haircut of Greek bondholders. The failure to stake out a position opposed to the Conservative-Liberal coalition was a huge strategic error. It was obvious that the German government’s own position would prove untenable.
Merkel’s post 2010 strategy has completely and utterly failed. She has had to backtrack on almost everything she has said, and meanwhile the crisis has deepened and the cost to German taxpayers has risen. She ought by all rights to be political toast. Yet she leads the polls. Partly this reflects her consummate political skills. But the failure of the main German opposition party to make a stand for European solidarity – even if it would have been unpopular with some elements of its voter base – was not only bad for Europe, it decisively limits the party’s room for manouvre.
A clever rhetorician such as Steinbrück will scratch the Teflon Chancellor somewhat. But the mistakes of the past prevent him from landing a knock-out punch.