by Andreas Hoffmann
I enjoy reading David Glasner’s commentaries. But his latest post, “What Hath Merkel Wrought?“, is absolutely misleading (with regard to Merkel and German elections).
I will not hide that I disagree with David Glasner concerning the best policies for a prosperous EMU. But that’s not the point here. In the last four paragraphs of this post, Glasner comments on Merkel’s fiscal policy and how it may affect her legacy. The interpretation fits his Keynesian story. But it is wrong.
David Glasner writes,
“. . . the damage inflicted by Mrs. Merkel’s ferocious anti-inflation policy did irreparable damage, not only on Greece, but, by deepening the European downturn and delaying and suppressing the recovery, on the rest of the European community, inflaming anti-EU, populist nationalism in much of Europe that helped fuel the campaign for Brexit in the UK and has inspired similar anti-EU movements elsewhere in Europe and almost prevented Mrs. Merkel from forming a government after the election a few months ago (emphasis added).”
Populism in Spain or Greece had very different origins from that in Germany or the UK. The AfD was originally founded as an anti-bail-out party. Had Merkel supported the Southern periphery with further financial means, the populists would have gotten more votes in Germany. Because people have cared less about the euro crisis, the AfD has somehow transformed into an anti-Merkel party. The main reason for their success in past elections was the influx of refugees. Not surprisingly, Germans are no different from other people in the world. When there is a greater wave of migrants arriving, some people get scared or fear unpleasant consequences. It’s got nothing to do with her “anti-inflationist policies”.
In addition, he mischaracterizes the macroeconomic situation in Germany. After praising Merkel for her refugee policy and political courage, David Glasner suggests that
“that admirable legacy will be forever tarnished by the damage she inflicted on her own country and the rest of the EU by her misguided battle against the phantom threat of inflation (emphasis added).”
First, there is no austerity in Germany. Government spending has been growing over time. And second, Germany has been in a boom with record low unemployment rates and (importantly) increasing employment rates. Is that the “damage she inflicted on her own country”?