|Angela Merkel has grounds to be glum|
However, recent developments on the home front are interesting as well, with domestic opposition to Merkel’s policies gaining focus and momentum, albeit targeting the taxpayer-backed bailout element of the package as opposed to the austerity one. Yesterday saw the launch of a new pressure group called Allianz gegen den ESM (Alliance against the ESM), comprising a coalition ten MPs, business groups and civil society organisations. The group have a (pretty basic) website setting out their five main objections, which are as follows:
- The ESM is to be permanent, with member states having no right to leave.
- The ESM Board of Governors, comprised of member states’ Finance Ministers, would wield decision making powers over policy and instruments.
- The Bundestag will have few opportunities for participation and control. The total size of the ESM “mega bank” will be €700bn, more than five times the size of the EU budget. Finance Ministers could agree on an indefinite increase.
- Member states have to pay €80bn in an-front cash contribution to the ESM, of which Germany’s contribution is around €22bn. Any losses will be borne by taxpayers as the participation of banks and other private creditors is not mandatory.
- The ESM has no mechanism for debt restructuring and can therefore not be considered to be a form of emergency assistance.
The group’s 12 o’clock press conference yesterday prompted Handelsblatt to lead with the headline: “High-noon for Merkel’s euro policy”. The paper also very helpfully compiled a ‘rogues gallery’ of the key players. While many of the MPs are long standing critics of the ESM and the bailouts, such as the CDU’s Klaus-Peter Willsch or the FDP’s Frank Schäffler, linking up so clearly with other groups allows their message to be heard more widely beyond the Bundestag. Other participants worthy of note are:
Marie-Christine Ostermann, Federal President of the Association of Young Entrepreneurs, who warned that:
“With ever larger rescue mechanisms, for which the liability is borne by others, Europe is moving ever further down a blind alley.”Lutz Goebel, Federal President of the Family Business Association, who in the past has compared the eurozone bailouts to the voyage of the Titanic, and urged the Bundesbank to seize the wheel of rescue before it was too late.
Karlheinz Däke, President of the German Association of Taxpayers, who argued that:
“The subsidising of the distressed eurozone countries, especially by the German taxpayer cannot be the answer to the debt policy of recent decades. The euro has only a future with individual liability and responsibility.”John Hüdepohl from Bündnis Bürgerwille (Alliance for Citizens’ will) which campaigns for more input and involvement from ordinary citizens in the eurozone bailouts.
Ultimately, despite Handelsblatt’s dramatic headline, this group and other similar constellations are not in a position to pose a serious threat to Merkel's policies at the moment. However, it shows that German domestic opposition has the potential to be uniting and organising itself, giving it a much better capacity to campaign for alternative policies. If Merkel appears to give in on ‘red-line’ issues such as eurobonds or greater ECB intervention, or if the eurozone is plunged into even deeper crisis – for example if there is no breakthrough in Greece’s re-run elections – expect such campaigns to pick up momentum.