With the UK economy in crisis and with the unfolding drama of the Damian Green arrest, the CDU annual conference (or Parteitag) in Stuttgart might seem an unlikely destination for me in the last few days, but the CDU is our German sister party, and with the change in leadership in the U.S., Angela Merkel has become the world's leading centre right figure.
Relations with our sister party remain strong, especially after David Cameron and Angela Merkel set up joint working groups this year on economic competitiveness, climate change and security. I believe that the CDU now understands that we will be leaving the EPP, but that we can nonetheless have warm and good relations, and it is this bigger picture that will count in the long run.
What is more, I know that many Conservatives here would have been impressed as I was by Chancellor Merkel's conference speech.
Merkel is going against what many (including, if not especially, Gordon Brown) perceive to be the international consensus, by speaking out against increased borrowing, against panicky measures to throw yet more public money at the banking and industrial sectors, and against 'living beyond our means'.
She had come under intense criticism both at home and abroad in the lead up to her conference. President Sarkozy said that France was "acting" while Germany was still "thinking". The respectable press in Germany has also widely slated her more cautious approach. On the day of her speech, the Handelsblatt's headline read "business rebels against Merkel", Der Spiegel's cover read "Angela mutlos - das gefährliche Zaudern der Kanzlerin in der Wirtschaftskrise" ('Dispondent Angela - the dangerous vacillation of the Chancellor in the economic crisis'), and the FT asked why Germany was depending on others to boost the global economy. She was also under pressure from some internal critics - some of whom spoke out openly on the conference platform in a way which we Conservatives haven't seen for some years - who wanted either immediate tax cuts and/or stimulus packages for industry.
Mrs Merkel gave a powerful defence of her position, whilst being careful not to rule anything out. Her key message was the word "Verantwortung", or responsibility, and she implicitely criticised countries like the UK which are trying to borrow their way out of trouble. Germany's first female leader started to sound like the UK's first female leader, when she said "As we are in Stuttgart, you should ask a Swabian housewife. She would give us some short and correct advice, which would be this: you cannot live beyond your means in the long run." She wasn't waving a handbag, but it felt like it, when Merkel said "you need courage to swim against the tide."
She told the Conference "you shouldn't always believe the experts, especially the 'self-appointed experts', but we need common sense solutions". She attacked those at home and abroad who were making all kinds of proposals, "many of whom contradict each other, some even contradict themselves". She said that we needed to show "responsibility for the taxpayers of both today and tomorrow" and linked her aversion to greater borrowing to Germany's demographic problems: "we need to make possible room to manoeuvre in future years too." In a bold move, Mrs Merkel committed herself to a balanced budget throughout the next parliament (i.e. to 2013!), in stark contrast to the UK's officially projected 8% deficit. Merkel and the CDU really did fix the roof when the sun was shining, telling us that "the growth in recent years has allowed us to get very close indeed to a balanced budget. That is a policy for the future."
Merkel showed a long-term perspective and a good grasp of history, in contrast to our own supposed historian-Prime Minister, Gordon Brown. The Chancellor harked back to the 1950s, and West Germany's economic miracle (the "Wirtschaftswunder"), when she said that those who rebuilt Germany did not depend on debt, and that to follow such a course now would be a betrayal of the hard work of their grandparents.
So far, so good. We would probably part company with the parts of her speech which talked about "exporting the social market economy" and definitely with the sections calling for the Lisbon Treaty to move forward and for "a worldwide stability and growth pact", but overall Angela Merkel's speech has shown that there are world leaders who have solutions other than Gordon Brown's approach of borrowing, spending and national bankruptcy. I doubt if the UK could balance its budget in the present circumstances, but there is a lot of ground between a balanced budget and an 8% deficit, and I would hope to see our party taking a serious look at Merkel's approach of "responsibility to taxpayers of today and tomorrow."
