Germany

The female leader of a prominent European country fails to win a majority in an election and then struggles to form a coalition. Meanwhile, her government limps from crisis to crisis and finally negotiations break down, leading to another general election just weeks later. Not Theresa May, obviously, because she had little difficulty in forming a workable coalition with the DUP. But it is the situation in Germany where today Angela Merkel said that she has given up on trying to create a workable government with the Free Democratic Party, the Christian Social Union and the Greens. There will now almost inevitably have to be another general election, with Angela Merkel – rather than Theresa May – likely to be out on her ear by Christmas.

The outlook for UK productivity is hardly encouraging. The Office for Budget Responsibility is suggesting only anaemic growth over the next five years while a recent survey by the ONS points to the lag between the UK and most of its G7 peers. Before we lament our lot, it is worth considering some of the differences between the UK labour market and those of its contemporaries. UK labour force participation is very high and unemployment is low. This would illustrate that the UK has been successful in getting as many people as possible into productive employment, which is not the case in most European countries.

The German Embassy threw a lavish party in London’s Belgrave Square last night to toast the Bundesrepublik’s Day of German Unity, but although the Bier and Sekt flowed freely, and the Ambassador’s Residence was awash with chatter, disunity rather than unity was the main topic of the day. Germany’s Tag der Deutschen Einheit marks the Reunification of Germany in 1990, one of those rare events in German history of which all Germans can feel proud. The Embassy’s annual jamboree is always jolly, yet there’s a ghost at every feast. Last year’s Banquo was Brexit. This year, it’s AfD.

The German public have, as predicted, kept ahold of nurse. But it is the breakthrough of the AfD into the German Parliament that is causing headlines around the world. Of course the four-year old party’s electoral success is also unsurprising. In elections last September the AfD were elected to representative roles in most of the country’s regional assemblies and beat Merkel’s party into third place in her own constituency. Nevertheless, yesterday’s electoral breakthrough is stunning and the success of this four-year-old party is among other things now causing a predictable rash of 1930s analogies.

Angela Merkel has won, for the fourth time, but on her party's worst election result since 1949. Her main rivals did just as badly and the main winner looks like Alternative for Germany (AfD), now Germany's no3 party. Here's the national picture: [caption id="attachment_9940622" align="aligncenter" width="620"] The exit poll from Germany's election[/caption] So the centre-left Social Democratic Party is heading for just 20pc, its worst result since the Second World War.  Martin Schulz, SPD leader, said it has been “a difficult and bitter day for German social democracy”. By which he means that AfD are set to break through into the Bundestag with 13.5 per cent of the vote, a result that differs sharply in east and west.

Last night’s TV debate between Angela Merkel and Martin Schulz poses a nagging question for British conservatives. No, nothing to do with Brexit – the subject wasn’t even mentioned. Rather, why was Theresa May so afraid of going toe to toe with Jeremy Corbyn before the General Election? If only she’d done a Merkel and faced off her main rival on television, she might have won a decent majority - just as Merkel looks set to do in three weeks’ time. Like May, Merkel is widely (and quite rightly) regarded as an uninspiring public speaker. Like Corbyn, Schulz is an assured performer, with a polished ‘man of the people’ shtick.

In the summer of 1990, the editor of The Spectator, Dominic Lawson, went to interview Nicholas Ridley, Margaret Thatcher’s Secretary of State for Industry, and asked him about the drive towards European Monetary Union. ‘This is all a German racket designed to take over the whole of Europe,’ said Ridley. ‘I’m not against giving up sovereignty in principle, but not to this lot. You might as well give it up to Adolf Hitler, frankly.’ The consequences of these comments were seismic. Thatcher demanded Ridley’s resignation, she resigned herself a few months later, and for a quarter of a century thereafter successive Prime Ministers did their utmost to distance themselves from Ridley’s remarks.

Angela Merkel has never been a showboating politician. Public speaking isn’t her forte – she prefers to work behind the scenes. That’s why her latest speech has made such big waves, on both sides of the Atlantic. The Washington Post said it marked the beginning of a ‘new chapter in US-European relations.’ The New York Times called it a ‘potentially seismic shift.’ Seasoned US diplomat Richard Haas described it as ‘a watershed’ in America’s relationship with Europe. So what did Merkel say? What did she mean by it? And what are the implications for Germany, and for Britain?