Tuesday, September 24, 2013

'Queen of Europe' continues her reign

It is indicative of how much things have changed in Europe in recent years that the outcome of the general election in Germany last weekend is likely to have a much more profound effect on Portugal than the elections to be held throughout Portugal this coming Sunday.
Commentators in Berlin say the euro crisis played only a marginal role in the German election campaign, the first in that country since the start of the eurozone crisis, but it is expected to continue to be very high on Angela Merkel’s agenda during her fourth term in office.
Dubbed by some the “Queen of Austerity”, by others the “Queen of Europe,” the German chancellor is expected to stay on track without making any sudden changes of policy on Europe. But if the centre-left Social Democrats join her conservative Christian Democrats in a grand coalition government, they may push for a softer austerity program for struggling euro states like Portugal and Greece.
The triumph of the Christian Democrats met with a mixed reaction in Portugal as elsewhere in the European Union. It varied from those who see Germany as the saviour of the beleaguered eurozone, to those who believe it is trying to take control of Europe economically in a way it failed to do militarily.
While the chants of “Angie!” and “Mutti” (mother) were still ringing out among her celebrating supporters at home, Chancellor Merkel’s finance minister, Wolfgang Schäuble, said the victory should be reassuring, not worrying, to Europeans.
“We will remain reliable in the role of stability anchor and the growth motor of Europe….. Germany continues to have an important leadership responsibility,” said Schäuble.
Portugal’s financial situation remains precarious. Commented the Wall Street Journal: “Now that the German elections are over, the eurozone needs to get back to crisis fighting. And top of the list of urgent problems is what to do about Portugal.”
The focus in Lisbon is on whether the troika will relax the 2014 budget deficit target that sparked a political crisis in June and resulted in immense damage to investor confidence.
The S&P credit rating agency say there is an increased likelihood that Portugal might need a second bailout.
Voters will go to the polls on Sunday in local elections in every municipality across the country with little optimism that their preferred candidates will make any difference to the bigger picture.

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