Until recently it looked as though the Angela Merkel-led CDU/CSU/FDP coservative coalition would win enough votes to form a reformist government for Germany at next month's elections. Such a result would be good news for the sluggish German and European economies and the Frankfurt Dax Index was trending upwards as a result. But things are no longer looking so rosy according to Bill Jamieson in today's The Business.
Recent polls show Gerhard Schroeder gaining support and Angela Merkel slipping. The charismatic Schroeder tends to perform well on the stump but his re-election would be bad news for the German economy. Although "he has shown a rhetorical commitment to reform, progress on the ground has been glacial".
Mr Jamieson is most worried by the emergence of the far-left Linkspartei. Current polls show it with 12% support - won on the back of implacable hostility to almost any kind of reform. German's system of proportional representation means that 12% could help its left-wing leader Oskar Lafontaine (once described by The Sun as Europe's most dangerous politician) emerge as the decisive swing leader, capable of keeping Schroeder in office, but at a big cost.
Germany once powered Europe's economy. If Germany continues to stultify Mr Jamieson is depressed at the prospects for the whole of Europe:
"France insouciantly impervious to reform, and the possibility of Germany caught in political gridlock: this is a dark prospect for the EU and for those, the British government in particular, who have pinned all on hopes that the process of economic reform in Europe would prevail. Don't be too sure."
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