Storm over Germany

Hearald Tribune
By William Drozdiak
Published: February 26, 2009


(excerpts)
The global financial crisis threatens to strike Germany - and the rest of the European Union - with hurricane-like force in the next three to six months.

As the world's leading exporter and Europe's primary economic engine, Germany is already enduring its worst recession since 1990. And as world trade shrinks and layoffs mount, Germany's downward spiral could further fragment the 27-nation EU. It could also jeopardize Berlin's ability to work more closely with the United States on a common strategic agenda ranging from Afghanistan to the Middle East.

A tectonic political shift is likely to occur with the Sept. 27 national elections. The governing grand coalition, linking Chancellor Angela Merkel's Christian Democrats with the left-of-center Social Democrats, now seems doomed despite its 75 percent majority in the Parliament.

But the gravity of the economic crisis has accelerated a rise in national protectionist sentiment across Europe in ways that are likely to distract Germany from playing a more helpful and decisive role in abetting American interests.

Meanwhile, the European Union seems paralyzed by the weak presidency of the Czech Republic while awaiting the outcome of another referendum in Ireland (scheduled for October) on modernizing EU institutions.

With EU institutions in limbo, the economy under growing pressure and the entire country riveted by the September national elections, Germany seems likely to enter a phase of protracted inward focus.

As a result, Berlin may have a hard time executing promises to bolster police training and civil reconstruction efforts in Afghanistan (not to mention sending troops to the south in the face of voter dismay) or imposing tougher economic sanctions on Iran (Germany is Iran's major commercial partner, with more than $5 billion in annual trade).

http://www.iht.com/articles/2009/02/...