Here we will feel the impact of the new German government

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The German elections, which have big implications for the EU in general and for Ireland in particular, ended with the two main parties on very similar votes. The immediate result of this is that the formation of the government will take some time and the outgoing Chancellor Angela Merkel will remain on stage in the interim as guardian.

ince the scorching times the German people experienced in the first half of the last century, the majority of them had longed for stability and prosperity since the founding of the post-WWII state in 1949. Ms Merkel has provided just that over the past 16 years during four terms as head of government.

As the most populous state in the European Union with the largest economy, ranked fourth in the world, what happens in Germany has a real effect on all of us. The new change of government that comes after Angela Merkel’s eventual departure will have a big impact here.

Ms Merkel has been a good friend of Ireland throughout the post-Brexit talks, implicitly understanding, as someone who grew up on the wrong side of a divided Germany, what partition means and the urgent need to ensure that ‘there can be no return from a hard and visible border on this island.

On the other hand, his insistence on austerity policies and the need for each member state to solve its own problems following the economic crash of 2008 was very bad news for this country.

Chancellor Merkel was more of a “manager” than a “leader” and this was particularly true of her approach to European issues. It really took until last summer for her to show real initiative in supporting the idea that the European Union was breaking a long-standing taboo on borrowing funds for a post-Covid 19 economic recovery.

The most immediate impact for Ireland will be visible in the approach of the new German government to revise EU rules on budget deficits and long-term debt. Due to the Covid-19 pandemic, these strict rules have been suspended. But the debate on how and when to reinstate them is already underway and it is expected that they will resume in 2023 giving these discussions a real urgency.

The Social Democratic SPD, led by flag bearer Olaf Scholz, wants to be more flexible about restoring these EU fiscal rules by making room for more social spending. The outgoing Christian Democratic CDU, led by Armin Laschet, still tends to focus more on the “cost” of Europe.

If the small liberal FDP party manages to win the finance ministry as the coalition prize, we can expect a much more conservative approach to the EU’s financial structures. On the other hand, the strong chances of the German Green Party to enter government, a place they last occupied in 1998-2002, will confirm them as a full party of the mainstream and will also give urgency to the efforts. of the EU to fight climate change.

The curtain is about to fall on the Merkel era of stability, but also neglect on key issues. What happens next will take some time to emerge. But developments will be closely watched around the world, and especially in Ireland.


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