Concerns about an economic crisis affecting the eurozone have reignited after it hit a seven-year low on Friday, which will have an impact on the EU. Germany’s economy stagnated while both France and Italy contracted in the last quarter. The chances of a recession increased after the coronavirus dealt an economic blow to the eurozone.

The EU has experienced its weakest economic growth since 2013, with a rate of 0.1 percent. The last time it was this low was when the debt crisis risked a European recession.

Germany’s growth rate failed to meet expectations and was down from an upwardly revised 0.2 percent in the third quarter.

As German Chancellor Angela Merkel nears the end of her chancellorship, this news could not come at a worse time. As Politico’s Matthew Karnitschnig argues, the economy has been key to her longevity. Until now, German output has grown in all but one of her 14 years in office, stuttering only during 2009 when the 2007-09 Recession was at its worst. Growth has been steady, but modest, reaching a 1.6 percent average during her tenure.

Germany’s latest economic results will be felt across the continent. Finance Minister Olaf Scholz has repeatedly resisted calls for a financial stimulus from industry leaders. However, what Merkel needs to demonstrate during her last months as Chancellor is leadership. There are many challenges facing her country and if she wants to secure a legacy, she must use what time she has left to address them.

When Gerhard Schröder was Chancellor until 2005, he implemented a series of welfare and labour reforms as part of his ‘Agenda 2010’ vision. By the time the 2008 Recession started, the German economy quickly recovered thanks to German cars and machinery being exported to China. It now has the world’s largest trade surplus. But the reason why there is a lack of an economic vision from the Christian Democratic Union of Germany (CDU), Merkel’s party, is because they have been in power for too long. This is why new leadership is needed.

Annegret Kramp-Karrenbauer, the politician seen as the Chancellor’s successor, announced on Monday that she would step down from the CDU chair. In response, the Social Democratic Party (SPD) has said it could quit the governing alliance if Merkel is forced out of office. If the CDU hope to retain power, they should solve their internal battles so that they have a chance of getting re-elected with a new vision for a new decade, especially with the AfD rising in popularity.

One problem Merkel faces is Brexit. With Boris Johnson insisting that a trade deal must be sorted by December, Merkel must urge her European counterparts to demonstrate some flexibility in providing Britain with a deal that benefits both sides. A no-deal Brexit would damage German automotive companies like BMW, which produces 60 percent of its Mini vehicles at the company’s Cowley plant in Oxford.

The Chancellor has been trying to resolve trade tensions between the EU and the US since last year, and this is damaging Germany’s economy in the long-term. Last month, US President Donald Trump and the EU promised to continue with negotiations to secure a trade deal between both sides. Germany’s industrial output has dropped by 1.5 percent since June and is now down 5.2 percent year-on-year, with Trump’s tariffs being identified as a central reason for that. Ending this crisis will be a positive outcome for Merkel and for Europe.

Dealing with these problems is the only way Merkel can secure a positive economic legacy during her final days in office. It remains to be seen in the coming months whether she still has the political will to solve them.

L'articolo How Can Merkel Transform Germany’s Economic Woes? proviene da InsideOver.

Croatia, a country with a population of almost 4.2 million, well-known for its scenic Adriatic coast went to the polls on the 22nd of December, 2019 to elect a new President. However, with no clear winner in sight, the elections went to a second round on the 5th of January where Zoran Milanovic defeated incumbent President Kolinda Grabar-Kitarovic.

Many around the world can instantly recognize Kitarovic for her fancy appearances at the 2018 FIFA World Cup in Russia, draped in her country’s flag, showing her passion and support for the national football team. A former ambassador to the United States and a George Washington University graduate, Kitarovic was also the country’s first post-independence female President.

In her way stood Zoran Milanovic, the country’s former Prime Minister from 2011 to 2015 from the Social Democratic Party of Croatia. Similar to Kitarovic, Milanovic also worked at the Croatian foreign ministry, was an advisor to the European Union and NATO in Brussels and has a master’s degree in European Union law. He joined the SDP in 1999.

The elections which have been viewed in the country as a form of renewal, were to the expectations of many, a success. The exit polls showed that Milanovic won the second round with 54% of votes, whereas, Kitarovic gained 46% of the votes. During the first round, the results looked like this: Milanovic with 29.6% of votes while Kitarovic took home 26.7% of votes.

Even though the role of the President in the small Mediterranean nation holds no concrete significance, the President does have a say in the running of the foreign policy and crucial defense matters.

The Social Democrats and the Croatian Democratic Union have been dominating the political scene in Croatia ever since its separation from Yugoslavia in 1991. Fast forward to 2020, Croatia is revelling in its role as the President of the European Union but major tasks remain ahead; the United Kingdom’s exit from the bloc, the accession of Albania and North Macedonia and the important decision on the seven-year budget for the European Union.

Even though Kitarovic’s defeat could be seen as inevitable, one must ask whether the new changes that the former Prime Minister and now President Milanovic will bring, will be acceptable or not? The social democrat says he has many new ideas and a vision that would help in resolving the problems that Croatia is currently embroiled in. However, leading experts believe that although this may come as a sign of victory, the changes would take time to implement. Croatians voted for progress and the results would give Brussels the idea that it’s not backtracking on its commitment of pursuing liberal democratic principles.

Milanovic’s main election promise was to fight corruption but the problems don’t just end there. Croatia is also facing the core issue of a stagnant economy and an influx of refugees from neighboring Serbia. Many Croatians are leaving the country due to the lack of employment opportunities. They’re finding jobs elsewhere in countries which have a comparatively better status and are more economically stable. Throughout his election rallies, Milanovic vowed to unite the country together and seek the return of the youth who have headed for newer pastures.

Milanovic has also promised to focus on the health and education sectors of Croatia, saying that he will reform institutions which have failed to produce the best outcome for citizens. He says the country will become more progressive by fighting for the rights of same-sex couples who have been left obscured under the tenure of conservative catholic Kitarovic. He says these trends are technically ‘unstoppable’ as they have a human element attached to them.

Croatia joined the European union in 2013 and also happens to be the bloc’s newest member. The European Union just recently gave Croatia the green signal for Schengen despite facing numerous security and migratory challenges in the region.

Zoran Milanovic will take office on the 19^th of February but this time around the President will have a more solid profile due to Croatia’s EU Presidency.

Milanovic differs in many ways from Kitarovic whom he says is corrupt, overlooks the problems of Croatians and someone who can’t differentiate between ‘public and private property.’ During the highly-anticipated presidential debates, Milanovic left no stone unturned by elaborating his manifesto and also lashing out at Kitarovic.

The elimination of corruption, overseeing a growing economy, no preferential treatment for politicians, uniting the divided nation and turning incompetency into progression are some of the values that Milanovic claims. How successful they will be, only time will tell.

The former Croatian PM also believes that the European Union is the country’s biggest ally rather than the United States. He will be on the offensive in mending lost relations with neighboring states.

The experience of Milanovic could play an important role in determining the future of Croatia. By tackling fiscal policy problems and allowing more businesses to operate in Croatia, the idea might sound safe but its effectiveness will only be determined by the moves Milanovic makes. Hit or miss, they could be costly.

L'articolo The End of Kitarovic’s Croatian Fairytale proviene da InsideOver.

The leaders of Germany’s Social Democratic Party (SDP), Saskia Esken and Norbert Walter-Borjans, were awarded a mandate by their party faithful at a recent party conference to discuss with German Chancellor Angela Merkel and her Christian Democratic Party (CDU) about continuing in government. They also stated what their relatively modest policy demands are.

The SDP is feeling the pressure of remaining in a coalition government with the CDU. A Forsa poll put them on 11 per cent, hitting a low last witnessed in June after previous leader Andrea Nahles quit following their disastrous performance in the European elections. Meanwhile, Merkel’s conservatives gained a percentage point, which left them with a 28 per cent score.

Plummeting poll numbers is certainly one valid reason as to why the SDP feel justified in selecting new leaders. Bloomberg discovered that they are trailing behind the Greens, whose support remained steady at 21.5 per cent. For the last 10 to 14 years, Germany’s traditional centre-left party has been a junior coalition partner to the CDU, targeting the centre-ground and helping Merkel retain office. Walter-Borjans and Esken are both staunch critics of the coalition and they might be able to help their party claw back support from their rivals. They said that under the current Chancellor, Germany is stuck in a ‘neo-liberal wilderness.’

The last time that the SDP won a decent vote share was in the 2002 federal elections when former Chancellor Gerhard Schröder won 38.5 per cent of the vote. Following his removal from office when his party won 34.2 per cent of the vote in the 2005 federal election, their popularity has slowly declined. With Merkel due to retire in 2021, many on the centre-left may be sensing an opportunity to re-establish themselves as a radical alternative.

The SDP leaders want their coalition partners to invest more in infrastructure, introduce tougher climate protection measures and increase the minimum wage. But the CDU have said they will not renegotiate the 2018 coalition deal, which means their centre-left partners risk triggering a year-and-a-half of government infighting before the next federal election. They could also destroy their coalition with Merkel. But both coalition partners are taking huge gambles if they start shifting from the centre-ground.

 As Luuk Molthof wrote for the London School of Economics, the CDU are also finding it hard to resist the temptation of moving further to the right in the face of shrinking support.

Annegret Kramp-Karrenbauer, the current Chair of the CDU, is keen to please the conservative faction in her party, who are blaming the Chancellor’s open-door refugee policy for poor performances in recent regional elections. This is despite the fact that candidates from both the CDU and the Christian Social Union, the CDU’s sister party in Bavaria, criticised the coalition’s refugee policy.

But they did not lose support to the Alternative for Deutschland (AfD) Party; instead the Greens won votes from both the CDU and the SDP. This is why both parties would be making a huge mistake in shifting their policy positions. The Greens have managed to reinvent themselves as a centrist party and that is why they are appealing to both conservative and social democratic voters.

Despite pressure from her own party to quit, 59 per cent of Germans want Merkel to remain in office until the next federal election, which proves there is an appetite for centrist politics in Germany.

Shifting further to the left may give the SDP a new identity, but when they are facing stiff competition from both the CDU and the Greens, they risk being pushed out of the centre-ground by becoming more radical. Either way, they are at risk of losing votes. But the CDU would also be making a substantial electoral error if they abandon the centre-ground at a time when their support remains high, despite improving poll positions from both the Greens and the AfD.

L'articolo Should the CDU and the SDP Shift From the Centre-Ground? proviene da InsideOver.