There has been much written about the legacy of Angela Merkel and her political style. Merkel has gained a lot of respect in Ireland for her humanitarian response to the migration crisis in 2015 and later through her robust defence of Irish interests throughout the Brexit negotiations. In that sense it is a late recognition after being the persona non grata after being blamed for domestic austerity measures following the Irish bailout in 2010. But even back then Angela’s Teflon style politics managed to divert most of the blame to Wolfgang Schäuble, her finance minister.
So with Merkel leaving office, what is in the bag for Ireland? What are the likely election outcomes and what can Ireland expect from a new government in Berlin? Despite the huge media interest in US and UK elections, Germany’s leadership contest probably has a more significant policy impact on these shores after Brexit. Germany remains, in tandem with France, the motor of European integration and Europe’s economy. In other words, the German election results will matter for Ireland, but in what way?
First of all, the election outcome and coalition formation are highly unpredictable at this stage. Current polling suggests massively declining voter support for Merkel’s conservative CDU and Armin Laschet, her successor. This opens up several possibilities for new coalitions that had never been governing on the federal level, but one winner seems to stand out already. Some pollsters put the Greens, despite a stuttering campaign start, in 80 per cent of all coalition possibilities, while the CDU comes only in second with a chance of 67 per cent. A green coalition partner, in earlier polls even a Green chancellor, in Berlin will provide a lot of tailwind for Eamon Ryan and the Green transformation programme domestically. Climate change and a green transition will be the top priority and will put on a lot of pressure to speed up and deepen the action plans of the FF-FG-Green coalition.
Although the election outcome remains unclear at best, the election manifestos give some indication about Ireland’s relevance in German politics. The five parties that have a chance to form a government mostly treat Ireland with ignorance. While key partners like France or the United States feature in the party’s foreign policy plans, Ireland is simply overlooked.
Only the Greens and the CDU state a firm and explicit commitment to the Good Friday agreement. For instance, the Social Democrats, the current junior coalition partner, and still possible contender for the chancellery, rather emphasise a continued close partnership with the UK without mentioning the Belfast agreement or Ireland in that context.
Ireland probably does not have to worry about being neglected in the upcoming crunch negotiations around the Ireland protocol as it is in the hands of another German, Ursula von der Leyen, the President of the European Commission. Yet, Ireland has to re-built close relationships with the new chancellor to ensure the peculiar Irish interests within the EU are understood, considered and defended.
One would also think that reunified Germany would be the ideal ally for Micheál Martin’s Shared Island initiative. This will require more efforts to build a closer relationship not only with the German government of the time, but also across the political spectrum, civil society and businesses.
The big elephant in the room is Ireland’s corporate tax system. All five relevant parties, even the market liberal FDP, pledge to harmonise corporate tax rates internationally and eradicate tax havens like Ireland. Paschal Donohoe will experience strong headwind from the continent and especially from Berlin to sign up the international corporate tax deal that had been agreed earlier this year. There will be little room to fudge for Ireland. Any Berlin government will push for corporate tax increases and closing loopholes for multinational tax dodgers.
While the German election remains an open race, Ireland can expect a push for greening the economy and aligning Ireland to minimum corporate tax standards. At the same time, Ireland should build on the international recognition earned through Brexit and exiting the bailout on its own terms by reaching out to leaders in the likely coalition partners now. To have Irish voices heard in the new Berlin administration, relationships have to be built beyond Merkel’s ailing CDU to ensure Ireland is not overlooked as in the party manifestos.
Dr Stephan Köppe teaches social policy and German politics at UCD