The long era of Angela Merkel's chancellorship will draw to an end in 2021, leaving a series of major question marks, some of which hang over not only Germany's destiny, but also that of Europe. On 26 September, Germans will head back to the polls, but it will be the first time an incumbent chancellor, at the height of her popularity, is not throwing her hat back into the ring. Merkel's exit could very well leave her party, and the country as a whole, in a sort of horror vacui. The election results will also have inevitable repercussions for the balance in Europe.
The first question mark is about the future of the most ambitious European project in recent years: the Recovery Fund. Will this really be, as Juergen Habermas believes, the most important step on the European integration path since Maastricht? This fund to rebuild Europe is built on two revolutionary ideas that were utterly inconceivable prior to the Covid-19 pandemic, especially for a German chancellor. The first is the unconditional transfer of a portion of the fund to specific European countries without any requirement to repay the money. The financing for the fund involves issuing hundreds of millions of Euros in bonds guaranteed by all 27 Member States. Using the term Eurobonds is taboo in this case, but that's what they are.
Europe's future is now hitched to the willingness of the next German chancellor to see this revolutionary project as a milestone on the road to improved European integration, to borrow the words of the Minister of Finance and social democrat candidate for the chancellorship, Olaf Scholz. Alternatively, the Fund could simply be seen as a one-off effort tied to the plague of the century, as Merkel herself views it, along with - at least it seems - the leading players in her CDU party.
The second question mark concerns reinstating those limits on European public accounts that have been suspended for at least another year because of the pandemic. This is a key question for Italy, weighed down by debt that is roughly 160% of GDP. The next chancellor will have a hefty role in the upcoming negotiations about the future of limits on European public accounts, and the interpretation of such limits.
Plus, five countries from central and northern Europe who were once close to the shadow chancellor during the long years of the 2008 financial crisis and to the former Minister of Finance Wolfgang Schäuble - at the heart of the harsh austerity measures imposed in exchange for European aid - have banded together over the last year to keep the flag of rigour waving. The so-called Frugal nations - the Netherlands, Austria, Sweden, Finland and Denmark - have united in opposition to the Franco-German alliance pushing the most ambitious and pro-European project of recent years, the Recovery Fund. They will try to throw sand in the works of any effort to relax the budget rules too much or to transform, using their language, the European Union into a Union of transfers. The future German chancellor's position in relation to the Frugal nations will be decisive in determining the political balance in Europe.
Similarly, Germany will have a crucial role when it comes to understanding how significant the rift with the East has become on the back of the refugee crisis and, more recently, the issue of respect for the rule of law. Berlin has played a vital role in mediating the eternal tug-of-war with the unruly Visegrád Group, so the continent's future will be closely tied to the approach adopted by the future head of the German government.
European eyes will definitely be watching Germany closely on 26 September. A recent double interview with Robert Habeck and Markus Soeder, respectively the leaders of the Green and CSU parties, seemed to shed light on how things might work out. There could be the first ever coalition between the Christian Democrats and the environmentalists, an alliance between black and green. With the first ever CSU chancellor. For months, the CDU/CSU coalition has been hovering around 38%, with Angela Merkel's popularity sky high. The Greens have been in second spot for months as well, at about 20%. That titillating Habeck-Soeder interview confirmed that the right-leaning Bavarian conservatives no longer have any reservations about governing with environmentalists. But the road ahead is still fraught with obstacles.
The first is the CDU Convention on 16 January that will select the new party leader. All three candidates are not only seen as unanimously weak, but also represent three starkly different, even opposing, visions of German conservatism. But Merkelian Armin Laschet, anti-Merkelian Friedrich Merz and outsider Norbert Roettgen do all share one thing: a seeming inability to fill the void left by a chancellor who still manages to easily get at least a third of German votes. This horror vacui is what continues to feed the idea that, right at the end, the Bavarian Soeder might carry the day. Yet, the notion of allowing the leader to come from the CSU could create an unprecedented crisis in Adenauer's party.
Plus, if Friedrich Merz ends up on top, even the seemingly certain CDU/CSU coalition could become problematic because he is the most hostile to the "social democratisation" of the CDU under Merkel and he will definitely push the party to the right - to a harsher and less pro-European position.
In such cases, the experts seem to think an alliance between the Greens, SPD and Linke is more likely, provided the radical left can overcome some of its more anachronistic traits. Alternatively, a coalition could be found among the Greens, SPD and the FDP liberals. In both cases, as the polls suggest the environmentalists will do well, we might see the first chancellor from the "Gruenen" party. The fight for the leadership of this party between co-bosses Robert Habeck and Annalena Baerbock has already begun, as a recent interview showed. In truth, two interviews. In the first, Baerbock broke a series of foreign policy taboos, shifting the Greens to more interventionist positions. In the second, Baerbock answered the critical question about whether she saw herself as fit to be chancellor with a straightforward "yes". Undoubtedly, a chancellor from the party that is not only most in touch with the issues of the future, but also more pro-European and with a great propensity for solidarity, would be excellent news for the EU. Well, excellent news for people who believe in the need for greater future integration. After all, a German government led by the Greens could well dredge a far deeper trench with the East. And with those Frugal nations, the guardians of a 'stricter' Europe.