By Parul Jain
Europe is quite calm these days, not because the tumultuous times are over for Eurozone as the combined economies of 27 of its member nations register tepid GDP growth of 0.4% in the second quarter of 2013 but because of the impending elections in the economic powerhouse of Europe on 22nd september, 2013. Germany, since the outbreak of crisis has been the linchpin where policies have been enforced impacting the whole of EU Zone and hence the election of next chancellor is obviously pivotal in ascertaining the fate of not only germany but other hard-hit countries like Greece, Spain ,Italy.
Angela Merkel,Chancellor of Germany serving her second term at the same post and titled by Forbes as the worlds most powerful lady in 2012 is campaigning yet again for her third term where she boasts of 20-year low unemployment rate, well management of Euro-crisis, slow yet steady growth of Germany. However, the truth is that in her tenure as the chancellor, she has failed to create a full banking union for the Eurozone which is a much needed change at institutional level.On domestic front too, the reforms have been limited , the policies in energy have been limited thereby leading to more subsidies and and high prices.Germany has poor demography, excessive reliance on exports particularly due to the thriving automobile sector,low productivity growth, too many low paid jobs, incompetent service sector and higher education system that needs to be revamped.Topping them up have been the austerity measures that have been imposed by her on Greece and other badly indebted countries!
However,Merkel is apparently the safest and most prudent option of all other options that Germans have!Why?
1.Intelligent and reserve!
She is not that enticing as an orator, even on minor issues she is cautious and thinks through the possible consequences over and over again.However, such weaknesses on the trail are strengths in office. The chancellors signature mark is her deliberate, argument-driven, boring, clinical policy style. She takes a problem, cuts it into pieces and tries to find a solution, often heavily technical and always very detailed.During the height of the euro crisis, this calm and deliberate style helped her, and though she has her critics, she is arguably responsible for saving the euro zone.
2. Favourite of the industrial sector
The industrial lobby seems quite content with her.For instance-
We in Germany are really satisfied with the job Angela Merkel did, Rupert Stadler, chief executive officer of carmaker Audi AG, said in an interview with Bloomberg Television. She listens to industry problems and acts, so that in the last months and years we have good stability now in Germany, he said.
3. Can deliver a better future
The snap polls present a festy picture for her. A third term will definitely help her to come up with bolder reforms on domestic, EU and international front.
However, the catch to the German election story is that Merkels Christian Democratic Partys win is not enough to decide on Germanys fate but the party with which coalition takes place. Her present coalition is with free democrats who have always backed economic reforms and tax cuts. The other alliance option is the social democrats, joining hands with them will obviously make things easier for Merkel as this would abolish the need to take consent on any proposal in consideration from its presently the biggest opposition.
This time is the the time for Merkel to make decisions. They are on coalitions ,the types of reforms, the areas requiring reforms.She has to address the deep fault lines of German economy and pull out the Eurozone from the sluggish mode by following what she has believed in(but somehow not able to enforce due to the Eurozone meltdown), i.e.,build a stronger financial union,push more liberal policies, cut welfare and trim regulation.
The author is a final year student studying B.A.(Hons)Economics at Daulat Ram college, Delhi University. She likes reading books, articles, or journals on various economic issue with a special inclination towards recent financial crisis and its repercussions. Recently completed her term as a Google student ambassador. She wishes to continue with her interest in economics by pursuing masters in the same and public policy as the main subject.