“France poses a big problem because of its financial situation” – L’Express

France poses a big problem because of its financial situation

He launches into battle. German Chancellor Olaf Scholz was sworn in as leader of his center-left party in the February elections, Monday, November 25, in an electoral campaign that promises to be perilous given its unpopularity.

“We want to come out on top, to be the first party” at the end of the legislative vote on February 23, the imperturbable 66-year-old leader declared at a press conference. Delegates will still have to validate the candidacy at a congress on January 11. Facing him, Friedrich Merz (CDU) is the big favorite. For Germany specialist Eric-André Martin, the next political configuration could be more favorable to France. To a certain point…

L’Express: In September 2005, the social democrat Gerhard Schröder called early elections after several electoral setbacks. His calculation, losing, led to the coming to power of Angela Merkel (conservatives). This scenario is well on its way to recurring…

Eric-André Martin: Everything will depend on Olaf Scholz’s ability to focus his campaign on themes that separate him from the record of the outgoing coalition, widely criticized in German public opinion. We need to create momentum on divisive issues. Olaf Scholz could campaign on the theme of peace, saying that we must end the conflict in Ukraine and take initiatives in this direction. He could also announce support measures for the social categories most affected by the recession and reconnect with the traditional SPD electorate.

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It is true that if we take the polls today, the task looks difficult. The CDU is credited with 32%. The SPD, from 16 to 17%. The Greens from 11 to 12%. And the AfD (far right) around 18%. The CDU should try to form a coalition with the SPD, or try to ally with the Greens – but this second scenario would not necessarily guarantee them a majority.

Will there be a third coalition partner?

The results of the traffic light coalition do not argue in favor of broader coalitions, because political differences end up hindering government action.

The conservatives are favorites to win the elections of February 23, 2025. But doesn’t a potential alliance with the social democrats risk neutralizing any action? And what will be the blocking points?

If the option of a grand coalition emerged the day after the elections, it would normally be the leader of the party that came first, probably Friedrich Merz, who would be responsible for forming a coalition. In the current situation, the grand coalition could be an opportunity for Germany if the CDU and the SPD agreed on an agenda for modernizing the country.

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There is no shortage of topics: would we finally decide to make investments – and therefore reform the debt brake rule? If so, would these investments be made within a national framework or, on the contrary, a European one? Should we give priority to restoring the competitiveness of the German production site, to the fight against global warming or to the modernization of the Bundeswehr? Then, another question will arise, and it is all the more urgent with the imminent return of Donald Trump to power: what attitude should Germany adopt towards China? Donald Trump will implement his program by raising customs duties and applying a form of technological containment against China. The Germans will not be able to both play on the American market, by maintaining a high trade surplus, and continue to invest in the Chinese market.

Finally comes the – divisive – question of the war in Ukraine. The former tenor of the radical left Sahra Wagenknecht complicates the coalition negotiations in three new Länder (Saxony, Thuringia and Brandenburg) where she became essential after the elections last September, by playing precisely on this subject. She has no interest in giving in, especially as the federal election approaches. What political price is Friedrich Merz prepared to pay for the deployment of American weapons, namely the missiles which must be deployed within two years? What will be the level of German participation in the stabilization and reconstruction of Ukraine?

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A grand coalition could therefore facilitate progress on these central issues and initiate real reforms because they will have the power and the time. Conversely, if the two major parties do not evolve or block each other, they will maintain frustration in their electorate, which would accelerate the recomposition of the political landscape. Remember that a quarter of the votes cast during the European elections went to the AfD and Sahra Wagenknecht, which is credited with 6 to 8% at the federal level.

Let’s go back. How did we get to this situation?

On the one hand, the tricolor coalition (which is in the process of leaving power) was already a sort of imposed exercise to find an alternation to Angela Merkel’s CDU, in 2021. Either the three parties (SPD-Greens- Liberals) combined to form a majority, or the CDU remained in charge in a new coalition. This “coupling” however required the three parties to harmonize their differences, it being understood that they had different priorities: the Greens wanted to quickly achieve the decarbonization of the economy and the shutdown of nuclear power plants; the SPD wanted to bring back a little social – in particular by increasing the minimum hourly wage; the liberals wanted less government and greater financial orthodoxy. This scheme could work in a normal period. But a few weeks after concluding the coalition contract, the war in Ukraine began. Over time, it has accentuated the differences between agendas, as priorities have changed.

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The loss of cheap Russian gas led to a very significant increase in the cost of electricity, tripling at the worst time. There were two dynamics, over which the coalition was never really able to regain control. Already, because companies, especially those that need a lot of energy – chemicals, metallurgy, glass, steel – have raised their voices: “If you do not quickly restore acceptable energy prices, we will relocate .” Then, because there was a movement of discontent among the population which reached its peak with the bill on domestic heating in 2023. In fact, there was a real problem of credibility in public opinion around of the government’s capacity to take realities into account. Problems linked to immigration (knife attacks, feeling of insecurity, etc.), in a context of saturation of reception capacities, were added to this and served as a catalyst for latent discontent.

Then there is the question of responsibilities: Olaf Scholz inherited a situation for which he is not necessarily responsible. What he is criticized for is his hesitation and his lack of leadership in the face of the incessant tensions between the coalition partners. But the situation he found in 2021 was also the result of the Merkel years and the choices made by the CDU: the choice of Russian gas as transition energy; the choice of financial rigor at all costs, including sacrificing the operational level of the Bundeswehr or even public infrastructure networks. Merz has an excuse, because he left politics to work in the private sector, due to his disagreements with Angela Merkel.

Friedrich Merz, chancellor, would this be good news for France?

Friedrich Merz is from the Rhine, he is more in the Francophile movement and he is a European. That’s already a good thing. On the other hand, France poses a big problem for the Germans because of its financial situation. We have been hearing worried statements here and there about the relaxation of French budgetary policy for a while now. And today, it’s obvious. Certainly, the Germans have an interest in having a France which is a partner and a pole of stability in Europe. Friedrich Merz will not be able to ignore this, especially in his investment choices. He will have a fairly conventional speech, but I think it could become a serious problem for Germany and the entire euro zone if rates were to increase, whether because of Donald Trump’s policies or an escalation of the situation in the Middle East. The situation could then become untenable.

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For the Germans, the priority will be to revive their industry, the heart of the German model, while maintaining control of their public finances. Today, there are serious risks of deindustrialization which will increase because many German industrialists will want to invest in the United States, and will moreover be invited to do so by the Trump administration. Chinese competition has become tougher, as evidenced by the massive imports of Chinese-made electric vehicles, and the retaliatory measures announced against Europe. Faced with these growing trade tensions, it is essential to maintain a form of European unity, and therefore a Franco-German understanding.

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