In the year that marks the end of the second term of the Chancellor, Germany will be able to boast of the early achievement of a balanced budget and stable levels of growth and employment. At least this is what authoritative German economic research centers claim. There is therefore nothing to suggest that Mrs Merkel will soon be leaving her office at the Chancellery. Yet, to date, the political picture is more uncertain than one might believe. According to the latest surveys of early December, the CDU/CSU, the Christian-Democratic and Christian-Social Union, is hovering around 39%, followed by around nine lengths of distance from their Social Democrat adversaries, who, despite their disadvantage, can however count on a ally, the environmentalists, whose approval rate, after the peaks reached last year, has now stabilized at around 14%. Accomplices the not very encouraging data of liberals (4%) and pirates (3%), to enter al Bundestag as fourth force it would be only Die Linke, the extreme left (7%) This being the case, SPD and Greens they would have the majority to govern in the next four years. But the federal elections are nine months away and the political agenda for the next few weeks is still capable of significantly altering the balance between the forces in the field. Much therefore depends on what will happen at European level, i.e., in particular, on whether a new one will be approved haircut for Greece to materialize the German losses, if and when the Madrid government obtains aid from the ECB and when the banking union is effectively implemented. However, the clash with Frankfurt could worsen if the Constitutional Court of Karlsruhe, in its definitive ruling on the ESM and Fiscal Compact expected in January, were also to censure the OMT, the unlimited purchase program of government bonds, which the Eurotower has not yet made use of.
However, much will also depend on domestic policy choices. In the election year, the Merkel-Schäuble duo will hardly want to put their hands on unpopular economic maneuvers, for the sole purpose of lowering the debt/GDP ratio, now above 80%. How then to read the report of the Ministry of Finance (secret and disclosed by the weekly Der Spiegel) which includes a tax increase and spending cuts? Although the Christian Democrats even deny the existence of such a report, according to the Social Democratic opposition it would be an anticipation of a spring maneuver, destined for approval only after the elections in Country Lower Saxony, scheduled for the end of January. In reality, it is not clear how and why Schäuble should force his hand a few months before the vote. Historically, election years are years of "gifts", certainly not of doses of accelerated austerity. And in fact, from 2013, alongside some savings measures and the tightening of social security contributions, the fee for visits to the clinic will be abolished, the level of no-tax-area, the subsidy for mothers who intend to look after their children between one and two years of age at home has been introduced, pension insurance contributions have been cut. It is therefore difficult to hypothesize new interventions, such as those listed by The Spiegel. In particular, the Minister of Finance, Wolfgang Schäuble, would have the intention of eliminating the reduced VAT rate of 7%, bringing it to 19%. However, the project clashes with a measure introduced at the beginning of the legislature by the Christian-liberal coalition, namely the attribution of the preferential rate also for hoteliers, the traditional clientele of the centre-right. In short, the idea, rather than being implemented immediately, seems destined to anticipate a point in the program for the next legislature, when the Christian Democrats will probably no longer govern with the liberals. Liberals who, just before Christmas, with Economy Minister Philipp Rösler, this time in broad daylight, have issued a document with proposals to privatize shares of companies still in public hands, including Deutsche Bahn, Deutsche Post e Deutsche Telekom; an idea that has been debated for years, but, as Michael Fuchs of the CDU/CSU parliamentary group bizarrely justified himself, «then the Eurocrisis took over and we had to deal with that». The Finance Minister's proposal to reduce federal transfers to the health fund, creating a contribution, is more ambiguous and following the best practices in the tax return. Schäuble's project would also include disincentives for early retirement, a cut in survivor's pensions or, alternatively, a new increase in the retirement age to 68-69 years. Finally, the reference to the need to give a cut to social policies is generic, given that, in the near future, the State will spend more on infrastructure, in particular to allow energy reconversion after the end of nuclear power.
The secret dossier comes out at a time when economic institutes and employers' federations are pointing the finger at the federal government for not having saved enough in these years of prosperity and growth. In particular, small and medium-sized entrepreneurs complain that the executive has not carried out the reform of the tax system, as promised in 2009. According to the calculations of the IfW institute in Kiel, in 2013 the Federal Employment Agency should then return to red and, if growth were to slow down, the surplus accumulated in 2012 could vanish as early as the end of 2014, putting public finances at risk. In short, divided between Brussels and Berlin, a complicated year awaits Mrs Merkel.
