Register to receive the OMFIF Daily Update and trial the OMFIF membership dashboard for a month.
Member Area Login
Forgotten password
Register to receive the OMFIF Daily Update and trial the OMFIF membership dashboard for a month.
Member Area Login
Forgotten password
by John Kornblum
When I first arrived in Hamburg as a vice-consul more than 50 years ago, every aspect of public life appeared to be frozen.
Ludwig Erhard, father of the post-war West German economic miracle, was confirmed as chancellor in the September 1965 election. The Berlin wall built in 1961 seemed to have sealed Europe’s division more deeply than ever. German democracy was robust and the US reigned supreme as Germany’s saviour and civilisational model.
Less than two years later, Erhard had been toppled, Ostpolitik (the normalisation of relations between West Germany and the East) headed the political agenda, and Germany was experiencing its first post-war recession. The war in Vietnam tarnished Washington’s image, and the far-right National Democratic Party threatened the stability of German democracy.
An old and experienced observer advised me, ‘Germany always takes a long time to change, but when stability seems to be in danger, voters strike back rapidly and dramatically. And you can never tell which way their drive for stability will take them.’
The next few years more than proved this prediction true. By the mid-1970s things had changed almost beyond recognition. Soviet expansionism and Germany’s recession led to a call for new leaders and new ideas. Peace, detente and the welfare state were the answer.
I cannot help thinking of those days as pundits puzzle over the dramatic collapse of Chancellor Angela Merkel’s efforts to build a new Berlin coalition after her poor performance in the 24 September elections. So much has changed, but so much remains the same. The advice I received as a young man seems to have been borne out.
In the age of Donald Trump, realisation of the western democratic vision depends significantly on Germany’s ability to remain a strong and confident partner in both Europe and across the Atlantic. Understanding events in German has suddenly become a major international task.
Slow pace of change
At first glance, Germany seems to have been infected by the same dynamics which burden the rest of the West – a turn to political populism and protectionist rhetoric. This is true to some extent, but the underlying causes are more long-term in nature.
What people are observing in Berlin is the inevitable erosion of a political consensus which has endured since the fall of Chancellor Helmut Kohl in 1998, who was defeated in federal elections by a large margin against the backdrop of rising unemployment. German voters are seeking a new definition of stability.
A slow pace of change is typical of German political life. In a nation traumatised by violent upheavals, voters seem to demand an emotional insurance policy before agreeing to anything new. Governments and leaders stay in office much longer than elsewhere. When change comes, it is usually defined as being much more dramatic than it really is.
Over the last 20 years, two chancellors have led Germany. The first, Gerhard Schröder, was ousted in 2005 after seven years in office for changing things too quickly. Merkel vowed never to repeat her predecessor’s mistakes. She even managed to sell the dramatic abandonment of forward-thinking nuclear power as a necessary reaction to a tsunami in nuclear-heavy Japan.
Fresh faces
Regardless of how confusing such behaviour seems to outsiders, it appears to serve an important purpose in Germany. Observers must be careful neither to overestimate the immediate implications of what is happening, nor to underestimate the country’s ability to adjust to change. Germany experienced exceptional upheaval in the 1970s and 1980s, only to enjoy great stability afterwards.
A small insight into the national mood was provided by an online poll conducted by the German daily Die Welt. Of more than 100,000 readers who responded, 72% welcomed the decision on 19 November by Christian Linder, leader of the liberal Free Democratic Party, the would-be junior member in Merkel’s coalition, to abandon negotiations.
This suggests voters are looking for fresh faces and new approaches, and that Lindner may have struck the right note. But, for the time being, his success reflects more the novelty of a new personality, rather than new policy. Partners in Europe should take note, as I learned many years ago, ‘You can never tell which way Germany will go.’
John Kornblum is a former US Ambassador to Germany, Senior Counsellor at Noerr LLP, and a Member of the OMFIF Advisory Council.
BackMon 25 Feb 2019 09:15
Peru and the Latin American economy
A roundtable with Julio Velarde, Governor, Banco Central de Reserva del Perú
February | 10:30
Tue 5 Mar 2019 08:30
China and the US in the global economy
China and the US in the global economy
March | 08:30
Wed 6 Mar 2019 08:45
Fintech developments for financial stability and inclusion
A roundtable with Ratna Sahay, deputy director, IMF, capital markets department, and Jochen Schanz, senior economist, Bank for International Settlements
March
Thu 21 Feb 2019
Euro area integration or disintegration
Roundtable with Hans Vijlbrief, President of the Eurogroup working group, General Secretariat of the Council of the EU
February | London
Wed 20 Feb 2019
Future dynamics for sustainable finance
A roundtable discussion with Peter Estlin, lord mayor of the City of London.
February | Singapore