Geopolitics

In Merkel's Shadow: What Brought Down Kramp-Karrenbauer

Annegret Kramp-Karrenbauer announced that she will not run for Chancellor and will step down as leader of Germany's ruling CDU party. It was a slow implosion over the past year, with Angela Merkel's mixed messages partly to blame.

Annegret Kramp-Karrenbauer on Feb. 10
Nico Fried

BERLIN — In the end, her decision came swiftly. Annegret Kramp-Karrenbauer announced that she will not run for Chancellor and will step down as leader of Germany's ruling CDU party. The result of a regional vote in Thuringia – where some local CDU politicians voted with the far-right Alternative for Germany (AfD) party to elect liberal leader Thomas Kemmerich – was the spark, but Kramp-Karrenbauer didn't lose her authority in one fell swoop. It happened little by little. She was unable to achieve consensus between the CDU factions in different parts of the country, another sign of her lack of authority that was evident throughout her time as party leader.

After her narrow victory over Friedrich Merz at the CDU party leadership election in Hamburg in 2018, Kramp-Karrenbauer wanted to bring the party together. However, this led to a lack of conviction, a wavering that weakened the CDU's standing as well as her own. With a great deal of fanfare, she promised not to take on a cabinet position and instead focus on the party itself, but backtracked when she was offered the role of Defense Minister.

Kramp-Karrenbauer & Chancellor Angela Merkel — Photo: Frank Hoermann/Sven Simon

It was a decision that damaged her credibility and didn't pay off politically either. Kramp-Karrenbauer announced plans to deploy more troops abroad, but she couldn't control the foot soldiers within her own party. ​Kramp-Karrenbauer was the architect of her own downfall, but she wasn't helped by fellow party heavyweights. Her rival Friedrich Merz never truly supported her after she defeated him in the leadership contest. He kept himself in the game, but never took responsibility when it would have been helpful to do so.

CDU deputy chairman Armin Laschet didn't have the guts to stand for the party leadership in 2018, but he was happy to criticize Kramp-Karrenbauer whenever the opportunity presented itself. It's worth noting that of all people, it was Jens Spahn, one of the greatest thorns in Angela Merkel's side while she was CDU leader, who showed his loyalty by keeping quiet. Of all Kramp-Karrenbauer's possible successors, he is the only one who has improved his political standing and gained respect over the past year, although he also had the most catching up to do.

It was Merkel herself who brought her experiment crashing down.

Angela Merkel's experiment of separating the Chancellorship and party leadership during the transition period has also failed. As party leader, Kramp-Karrenbauer remained in the Chancellor's shadow. In the end it was Merkel herself who brought her experiment crashing down: She criticized the election results in Thuringia vehemently, and pushed her authority as Chancellor to the edge of acceptability in demanding that an elected local president step down. And she was only able to save the coalition with the SPD by making concessions that Kramp-Karrenbauer as party leader could not agree to.

The question of how long Merkel will remain Chancellor depends on who the CDU chooses as new party leader and Chancellorship candidate. It will also depend on how much support Merkel still has in the CDU, especially in the East. Her recent decisions have shown that Merkel is thinking like a Chancellor, not in terms of managing compromises within her party.

And there is an insurmountable contradiction between Merkel and growing swathes of her party: Many in the CDU see the right-wing Alternative for Germany party (AfD), one of their biggest problems at the moment, as a result of the Chancellor's own politics. Merkel, however, thinks it is the CDU's lack of open opposition to the AfD that has allowed the far-right party to grow in popularity.

Merkel may hope to rule through the end of Germany's stint in the rotating presidency of the Council of the European Union next autumn. But it would be more through the support of the public than from her own party.

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Economy

European Debt? The First Question For Merkel's Successor

Across southern Europe, all eyes are on the German elections, as they hope a change of government might bring about reforms to the EU Stability Pact.

Angela Merkel at a campaign event of CDU party, Stralsund, Sep 2021

Tobias Kaiser, Virginia Kirst, Martina Meister


-Analysis-

BERLIN — Finance Minister Olaf Scholz (SPD) is the front-runner, according to recent polls, to become Germany's next chancellor. Little wonder then that he's attracting attention not just within the country, but from neighbors across Europe who are watching and listening to his every word.

That was certainly the case this past weekend in Brdo, Slovenia, where the minister met with his European counterparts. And of particular interest for those in attendance is where Scholz stands on the issue of debt-rule reform for the eurozone, a subject that is expected to be hotly debated among EU members in the coming months.

France, which holds its own elections early next year, has already made its position clear. "When it comes to the Stability and Growth Pact, we need new rules," said Bruno Le Maire, France's minister of the economy and finance, at the meeting in Slovenia. "We need simpler rules that take the economic reality into account. That is what France will be arguing for in the coming weeks."

The economic reality for eurozone countries is an average national debt of 100% of GDP. Only Luxemburg is currently meeting the two central requirements of the Maastricht Treaty: That national debt must be less than 60% of GDP and the deficit should be no more than 3%. For the moment, these rules have been set aside due to the coronavirus crisis, but next year national leaders must decide how to go forward and whether the rules should be reinstated in 2023.

Europe's north-south divide lives on

The debate looks set to be intense. Fiscally conservative countries, above all Austria and the Netherlands, are against relaxing the rules as they recently made very clear in a joint position paper on the subject. In contrast, southern European countries that are dealing with high levels of national debt believe that now is the moment to relax the rules.

Those governments are calling for countries to be given more freedom over their levels of national debt so that the economy, which is recovering remarkably quickly thanks to coronavirus spending and the European Central Bank's relaxation of its fiscal policy, can continue to grow.

Despite its clear stance on the issue, Paris hasn't yet gone on the offensive.

The rules must be "adapted to fit the new reality," said Spanish Finance Minister Nadia Calviño in Brdo. She says the eurozone needs "new rules that work." Her Belgian counterpart agreed. The national debts in both countries currently stand at over 100% of GDP. The same is true of France, Italy, Portugal, Greece and Cyprus.

Officials there will be keeping a close eye on the German elections — and the subsequent coalition negotiations. Along with France, Germany still sets the tone in the EU, and Berlin's stance on the brewing conflict will depend largely on what the coalition government looks like.

A key question is which party Germany's next finance minister comes from. In their election campaign, the Greens have called for the debt rules to be revised so that in the future they support rather than hinder public investment. The FDP, however, wants to reinstate the Maastricht Treaty rules exactly as they were and ensure they are more strictly enforced than before.

This demand is unlikely to gain traction at the EU level because too many countries would still be breaking the rules for years to come. There is already a consensus that they should be reformed; what is still at stake is how far these reforms should go.

Mario Draghi on stage in Bologna

Prime Minister Mario Draghi at an event in Bologna, Italy — Photo: Brancolini/ROPI/ZUMA

Time for Draghi to step up?

Despite its clear stance on the issue, Paris hasn't yet gone on the offensive. That having been said, starting in January, France will take over the presidency of the EU Council for a period that will coincide with its presidential election campaign. And it's likely that Macron's main rival, right-wing populist Marine Le Pen, will put the reforms front and center, especially since she has long argued against Germany and in favor of more freedom.

Rome is putting its faith in the negotiating skills of Prime Minister Mario Draghi, a former head of the European Central Bank. Draghi is a respected EU finance expert at the debating table and can be of great service to Italy precisely at a moment when Merkel's departure may see Germany represented by a politician with less experience at these kinds of drawn-out summits, where discussions go on long into the night.

The Stability and Growth pact may survive unscathed.

Regardless of how heated the debates turn out to be, the Stability and Growth Pact may well survive the conflict unscathed, as its symbolic value may make revising the agreement itself practically impossible. Instead, the aim will be to rewrite the rules that govern how the Pact should be interpreted: regulations, in other words, about how the deficit and national debt should be calculated.

One possible change would be to allow future borrowing for environmental investments to be discounted. France is not alone in calling for that. European Commissioner for Economy Paolo Gentiloni has also added his voice.

The European Commission is assuming that the debate may drag on for some time. The rules — set aside during the pandemic — are supposed to come into force again at the start of 2023.

The Commission is already preparing for the possibility that they could be reactivated without any reforms. They are investigating how the flexibility that has already been built into the debt laws could be used to ensure that a large swathe of eurozone countries don't automatically find themselves contravening them, representatives explained.

The Commission will present its recommendations for reforms, which will serve as a basis for the countries' negotiations, in December. By that point, the results of the German elections will be known, as well as possibly the coalition negotiations. And we might have a clearer idea of how intense the fight over Europe's debt rules could become — and whether the hopes of the southern countries could become reality.

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