The CDU's obsession with a balanced budget is a scam
Things are getting weird in Germany’s general election campaign. In fact, the latest campaign tweet from the CDU — the party of Angela Merkel and her designated successor Armin Laschet — is downright creepy.
Against the background of the German flag it features a leather cap perched on top of a big black zero. The slogan reads Wir stehen zu unserem Fetisch — “we stand by our fetish”.
Ja, wir gestehen, wir haben einen kleinen Fetisch: Solide Finanzen ohne neue Schulden! Das ist praktizierte Generationengerechtigkeit! Und es ist die beste Voraussetzung für Investitionen in die Zukunft. Uns geht es um beides. Und unser Haushalt zeigt: Es geht beides! pic.twitter.com/abIMN64eMO
— CDU Deutschlands (@CDU) November 27, 2019
What on Earth is going on? Why are the Christian Democrats featuring bondage gear on their campaign materials? And what does the zero symbolise?
Let’s start with the number — the schwarze Null or “black zero” refers to the German habit of balancing the budget for year after year. Critics, both at home and abroad, have condemned this stubborn policy as a “fetish” because Germany could easily afford to run a modest deficit — thus provide much needed demand in the European economy.
We shouldn’t forget that Germany is only able to run balanced budgets because of it success in getting other countries to pay for its stuff. Thus the Americans pay for Germany’s defence. The Mediterraneans help subsidise German exports through the distorted exchange rate locked in by the single currency. And the other countries of Northern Europe pay for an EU budget that builds Germany’s export infrastructure to its economic backyard in central and Eastern Europe.
It’s a scam, but because it can be dressed up in the clothes of fiscal responsibility, Merkel got away with it.
The Covid crisis forced the German government to loosen its economic policy as an emergency measure and to allow the other nations of the EU to do the same. But, under Laschet, the CDU is a standing on a platform of getting back to the old discipline — hence the unashamed embrace of the fetish label.
This isn’t just about an appetite for masochism at home, but the sadistic impulses directed at Germany’s neighbours. The CDU is betting that German voters will want to reimpose the pre-Covid constraints of Eurozone membership. Great pain has been inflicted on Greece, Italy and other “peripheral” states, but the German attitude is that these countries deserve it.
Thus the electoral appeal of schwarze Null is as much about getting the rest of Europe tied down again as it is about returning to balanced budgets at home.
But is it working? According to the latest poll, the CDU has sunk to a new low of 22% in the opinion polling.
If the Social Democrat and Green parties form a new coalition then we could see old disciplines permanently relaxed. And yet there’s a catch. The electoral arithmetic is such that these two parties would need a third coalition partner. In practice, that either means the Free Democrats or the CDU — and both parties are committed to black zero.
Europe shouldn’t bet on breaking free just yet.