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Generational Dynamics Web Log for 25-May-05
German election signals major European political realignment

Web Log - May, 2005

German election signals major European political realignment

The unexpected landslide victory of a woman known as Germany's Margaret Thatcher is being called "an earthquake" in German politics.

Angela Merkel, CDU leader <font size=-2>(Source: BBC)</font>

Angela Merkel, CDU leader (Source: BBC)

Analysts are describing it as shocking as if Republicans had taken over the state of Massachusetts in America.

For four decades, the liberal Social Democratic Party (SDP) had been firmly in control of Germany's largest province, North Rhine-Westphalia. But on Sunday, the conservative Christian Democratic Union (CDU) party took control of the district, winning a landslide victory in the regional elections.

This has turned into a confrontation between the two parties' leaders:

Chancellor Gerhard Schröder, SDU leader <font size=-2>(Source: BBC)</font>

Chancellor Gerhard Schröder, SDU leader (Source: BBC)

Chancellor Gerhard Schröder is the head of the SDP and is also head of the country. Following the CDU victory, Schröder shocked the nation by calling for new national elections in September, a year earlier than they were required.

Angela Merkel has been head of the CDU, since 2000, and is expected to be Schröder's opponent in the new national elections.

A Schröder/Merkel contest in the fall would draw a lot of international attention. Merkel will be the first major European woman leader since Margaret Thatcher was Prime Minister of Great Britain in the 1980s. And like Thatcher, Merkel is a conservative, which is why Merkel is being called the "new Margaret Thatcher."

An interesting comparison of this election with the recent re-election of Tony Blair in Britain and last year's re-election of George Bush in U.S. is that in all cases there's no difference in policy between the principle candidates except posturing. George Bush and John Kerry had identical policies in Iraq, and the same was true of Tony Blair and Michael Howard in Britain.

Merkel is much more pro-American than Schröder, but Merkel has already said that she won't have Germany join the American-led coalition in Iraq.

The main issue in Germany is the economy. Germany has been going through a long period of double-digit unemployment, and economic growth has been almost non-existent.

From the point of view of Generational Dynamics, this is not surprising. Generational Dynamics predicts that Europe is entering the same 1930s style Great Depression that America is entering. And, like America, Germany increasingly has a hollowed-out economy unable to produce products that people actually want to buy.

The difference between America and European countries including Germany is that America's increasing debt is being financed by countries around the world, mainly in Asia, purchasing US Treasury notes in high volume. No Asian countries are doing the same favor for Europe.

Schröder has been addressing the economic problems by implementing a series of very painful, very unpopular economic reforms, such cuts to welfare and benefits. Merkel has promised to continue implementation of reforms, but to do them better. Her position is reminiscent of John Kerry's promise during the 1994 campaign to follow the same Iraq policy, but to do it better.

The net of all this is that, for all the bitterness between Schröder and Merkel, there's simply no substantive difference between their policies, even though one is "liberal" and the other is "conservative." This is exactly what happened in Britain and America, and it's what happens to any country during a "generational crisis" period, since the people of the country start to unite around common policies to guarantee that the nation and its way of life will continue as before.

For Generational Dynamics, the importance of any event is how it demonstrates shifts of opinion among masses of people, because these shifts indicate likely directions (allies and enemies) as the nation heads towards its next crisis war.

In 2002, Schröder survived near defeat by adopting an anti-American stance on the war in Iraq. Prior to the current election, Schröder used bitterly anti-American, anti-British and anti-Jewish rhetoric, in the hope of repeating his 2002 success. The victory of pro-American Merkel makes it clear that German public opinion is not nearly as anti-American and anti-British as the French are. This corresponds to my own experience doing business in Europe in the 1970s. At that time, it was pretty apparent to me that the Germans liked Americans, and the French hated Americans.

The German public attitudes towards Britain and America tell us some information about how Germany will choose side in a future war between France and England. People are often surprised at the thought of a new war between France and England, but they've had regular wars since before 1066, and it should be no surprise that they're expected to have a new one. In the imminent "clash of civilizations" world war in the Mideast, my expectation is that Britain and America will be on the Israeli side, and France will be on the Palestinian side. The current election tells us that the German are more likely to be on the English side than on the French side.

We'll get a little more information next week. France is voting on ratifying the new EU constitution on Sunday, and Holland is voting three days later. France had been expected to vote YES, but polling in recent weeks indicates that the NO side is now a majority.

A French vote against ratifying the EU constitution will be considered a major setback to the EU as a whole. The outcome of the French and Dutch referenda will provide more information about the cohesiveness of the EU.

From the point of view of Generational Dynamics, the European Union is not heading toward becoming a viable united nations. After the war, the EU will make another attempt and will almost certainly succeed at that time. In the ruins of the post-war "austerity period," issues will be resolved in a way that benefits the entire continuent, which is not the case today. These issues will include the economy, and one more difficult issue that we haven't mention: Whether Turkey should be a member of the EU. (25-May-05) Permanent Link
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Generational Dynamics Web Log for 25-May-05 German election signals major European political realignment

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Generational Dynamics Web Log for 25-May-05
German election signals major European political realignment