Is Germany’s first female Chancellor tough enough for reforms?

Polls show the Christian Democrats (CDU) at the lead with 40.5% of the votes, with the Social Democrats (SPD) trailing behind at 34%. It seems certain Germany will have its first female Chancellor come September 18th. For the German voters it is more their dissatisfaction and discontent with the status quo under the SPD, rather than a preference for the CDU that is leading to this result.

So what makes the Christian Democrats the likely choice for voters, despite the fact that they support further reforms, the very reason that seems to be the cause for the public’s discontent with the incumbent Chancellor?

The scenario seem to suggest that, controversial and painful as they maybe and critical as Germans are of the government’s attempts at reform, they also recognise the need for change. It is more a discontent with the failure of the SPD, who have been in government the last 7 years, to deliver on pre-election promises that are proving to be the cause of public dissatisfaction and distrust.
Highest on the minds of voters is the issue of unemployment. The Christian Democrats outlined loosening of the labour market rules, for instance making it easier for companies to hire and fire workers, introducing direct subsidies to low-wage employees to lure people back into the workforce rather than remain dependent on social assistance, as a strategy to tackle the problem. Other reforms the CDU are proposing include a VAT increase, designed to offset a cut in payroll taxes in order to boost hiring. The crucial question then becomes, can the CDU deliver on its reform policies in a manner that produces result fast enough to please the voters?

The other big question remains who Angela Merkel, Angie amongst her supporters, will lead the coalition with. If voters deny the CDU-Liberal FDP a majority, particularly due to the strong support for the new leftist alliance, then a grand coalition with the SPD may become necessary.

The grand coalition is not one that economists and business leaders are keen to see. The pitfall is that the two parties have strong divergent positions on a number of issues. Notably and of most concern, are the issues of tax and employment policies, ones much needed to spur the flagging economy.
Yet no matter who the Christian Democrats form a coalition with, they have the added advantage of already having a majority control over the Bundesrat, Germany’s Upper House. The Upper House consists of representatives from the State governments and have veto powers on all bills that affect the states, and these cover almost all areas apart from education, particularly finances and taxation.

With the elections of the lower house only days away and the Christian democrats set to win, the party will hold a majority over both houses and with little blockage on any bills it proposes, it then seems simply a matter of political will of Angela Merkel to push through Germany’s much needed but unpopular reform to boost its economy.