The recent elections in North-Rhine Westphalia (NRW) have produced a great result for the German Social Democratic party (SPD) and a crushing defeat for Angela Merkel’s Christian Democrats (CDU). After a dozen years, and with a vote share of 39.1%, the SPD has re-emerged as the strongest party in Germany’s most populous state. The CDU, on the other hand, suffered losses of more than eight percentage points and ended up with 26.3%, the party’s worst ever result in the state. After two years of red-green minority government, there is now a clear majority for the region’s minister-president, Hannelore Kraft, to continue.
State elections in NRW have traditionally had a significant impact on federal politics but one has to say that in this particular election local issues were key. Kraft is a very authentic and popular politician whereas her conservative challenger, the federal environment secretary, Norbert Röttgen, was perceived as remote and out of touch. It did not help that he never answered the question of whether he would also be available as opposition leader in his home state or whether, in case of a defeat, he would rather keep his job in Berlin. This question has now been answered as he immediately resigned as chairman of the state CDU. But the damage his ambiguity had done was significant.
The liberal FDP, which has faced a fight for sheer political survival over recent months, has stabilised in the last two weeks with good results beyond 8% in both Schleswig-Holstein and NRW. This does not alter the fact though that in almost all state elections over recent years, the governing coalition in Berlin has lost ground. This of course makes governing the country harder as in many cases the second chamber Bundesrat, where Merkel no longer commands a majority, has to approve laws too.
But is there a wider lesson, not just for Germany but for Europe, to be learned from the NRW campaign? I think there is and it is about austerity, budget consolidation and debt.
The reason why new elections became necessary was that the FDP voted against the budget (they called it a “debt budget”) of the red-green minority government. Both the FDP and the CDU tried a familiar strategy during the election campaign: fearmongering about public debt. Even though the red-green government has reduced annual deficits since taking over from its conservative-liberal predecessors in 2010 and is planning to meet Germany’s domestic debt brake criteria as required by 2020, the state opposition tried to paint it as a profligate spender. On the other hand, Kraft, an economist by training, presented a more even-handed plan for the long-term reduction of debt that wouldn’t, in her words, punish children and reduce investment in education. She didn’t buy into the budget panic but offered sound medium- to long-term budget management.
Her strategy worked. If there is one key lesson from the NRW campaign it is that when there is a sensible fiscal policy on offer, short-term fearmongering about fiscal deficits and burdening future generations does not work. True, the FDP deficit hawks managed to mobilise voters with their message, but 8.6% of the electorate is hardly widespread support. The CDU vote, on the other hand, collapsed following the same strategy.
I hope Merkel takes this lesson on board and applies it to her European politics. It is becoming increasingly clear that her European austerity push, in the absence of a plan for growth and jobs, has led the eurozone to the brink of collapse. The full extent of the disaster is becoming more and more obvious as Europe slides back into recession and the social and political costs of austerity are piling up. The crisis hasn’t caught up with Germany and therefore Merkel’s approval ratings yet, but it will, given the country’s reliance on European exports and the political fallout of eurozone disintegration.
European austerity doesn’t work economically and it is even less viable politically. What kind of growth strategy is developed in the coming weeks is therefore crucial and self-confident social democrats, especially in Germany and France, will push for a comprehensive agenda for growth and jobs. This is the eurozone’s last chance if it is to survive as we know it. Nobody, as is often claimed, is denying the need to rein in deficits and to return to sustainable debt levels. But this is a long-term game and not a competition to see who can cut the fastest.
The current strategy was never going to work. The German government should know this given that the last instalment of first world war debt, for instance, was paid only in 2010, 92 years after the end of the war. We need sustainable fiscal consolidation that doesn’t erode societies and economies. Short-term point scoring by unnecessarily scaring people about debt isn’t good and successful policy. Kraft has proven this once more.
This column was first published by The Guardian