I’m in a Starbucks looking up at Cologne Cathedral.  About to head to the airport and return home to London.

I’ve just finished reading the cover feature in this week’s Newsweek:

"LOST LEADER: Once hailed as Germany’s Margaret Thatcher, Angela Merkel is now ruling by poll, lying low, stalling on reform. What happened?"

The article is a great read and its arguments have been confirmed by all of the people I’ve been meeting this weekend, as guests of the Friedrich Naumann Stiftung – one of the taxpayer-larded study groups that are loosely attached to each of Germany’s main political parties.

The article begins by noting that 45% of west Germans and 57% of east Germans think that socialism is a good thing.  Two-thirds support extended unemployment benefits and a lower retirement age.  This rise in underlying popular support for big state measures is also reflected in support for Germany’s left-of-centre parties.  The SPD is on 25%.  The Greens on 10%.  The far-left ‘Die Linke’ (Left) party led by Oskar Lafontaine (the man once described by The Sun as the most dangerous man in Europe) on 11%.  A total support for clearly left-wing parties of 46%.

Worse, according to Newsweek and the (classical) liberals I’ve been
with this weekend, is that Angela Merkel’s CDU-CSU is drifting that
way, too.  What isn’t clear is whether Chancellor Merkel believes in
more state intervention or whether it’s a necessary price for her grand
coalition with the SPD.  Huge sections of her party are certainly badly
burnt by the huge loss in support that the party suffered during the
last federal elections campaign.  Merkel promised significant market
reforms but saw a huge CDU-CSU opinion poll advantage almost completely
eliminated by polling day.

The CDU-CSU now appear very cautious.  They appear too willing to
agree to their junior SPD partner’s wishes for retreat on some of the
reforms introduced by Gerhard Schroder.  Privatisation has stopped.
Plans to deregulate public health insurance have been abandoned.
Higher minimum wages and more generous welfare settlements all threaten
to undo some of the good achieved by previous labour market measures.
The opportunity for retreat has come from a strong uptick in German
economic performance.  Unemployment numbers have fallen by a million in
one year.  The economy has grown by over 3% overall over the last 12
months.  Complacency has crept back on to the public agenda.

None of this leftwards drift is hurting Mrs Merkel in the polls.
She enjoys sky high approval ratings.  Germans still love consensus
politics and only a crisis appears to bring about an appetite for
change.  The risk, Newsweek concludes, is that "the next economic
downturn will show how skin-deep the country’s first dose of reforms
has been".

Britain, of course, faces the same dangers.  The British state is now larger than Germany’s again.  I get the sense we spend less wisely than the infrastructure-conscious Germans.  Thatcherism is being undone and the Tories don’t appear brave enough to stop the growth of government.  Germany is certainly drifting leftwards but is Britain any better?

Related link: The era of big government conservatism?

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