The German Government will Collapse before the Scheduled 2013 Election

I should begin by apologising for not having posted in a long time. The paucity of posts will continue during the month of September, at the end of which it should end, as I hope to resume timely posting. Until then, I shall tweet occasionally, so feel free to drop in on twitter and follow me. There link should be somewhere to the left, there  –>

For now I shall mention that the CDU’s governing arrangement cannot hold on for much longer. As I mentioned in a previous post, there is a clear dividing line between the SDP/Greens and the CDU, that is typically political and ideological. The first are much more open to a solution to the present crisis that results in deeper integration, and much more popular for it too. Similarly, the CDU is much more open to compromise than the FDP. This will cause the coalition’s ruin.

It should not be understood that I find Merkel/Schauble’s CDU to be proactive in any manner similar to Kohl’s, but it is ultimately willing to compromise enough to find a solution. The FDP is probably not. The narrative can take two possible forms. Either the FDP is opportunistic and knowing it will be wiped out in the next election it decides to accept all compromises to remain in power for as long as possible, or it is at least slightly ideological and when faced with the next round of EFSF enhancement will not be able to accept it. Opportunistically, it could also make one last ditch at a negative strategy that failed at the Land elections in the (correct or incorrect) belief that PIIGS bashing might be a more successful national strategy. I believe the latter, in whatever form, to be the case and this last agreement from July to be their line in the sand. This I infer from the criticisms Merkel’s faced . The CDU however, does not share this ideological retrenchment and as such is much more likely to accept it. If not, Merkel herself will resign due to European pressure.

However, the point is the following: The German government will not survive the next big speculative wave of attack. The timing of my prediction therefore depends on the timing of the next Euro-zone mistake. All eyes should be on Spain, Greece, Italy, Finland, Slovenia or Slovakia. That’s where the confusion should come from.

So take a sit. Make yourself comfortable and watch closely. But don’t hold your breath… This might take a while. The ECB has a lot of ammo; but how much patience?

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One Response to The German Government will Collapse before the Scheduled 2013 Election

  1. Looking at internal weaknesses, I think that it would be helpful to follow the other Siamese twin, the CSU, as a separate government partner; roughly between the CDU-led (broad) union and a FDP-like stance on Bavarian autonomy and pronounced conservatism.

    You may be right that the decisive blow may come from the outside (eurozone), leading to the CDU/CSU & FDP coalition unraveling.

    Right now, somewhat surprisingly, the Greens and the SPD look like a more constructive alternative for Europe as a whole, than a coalition led by the party of Helmut Kohl.

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