The Economist - USA (2020-02-15)

10 Leaders The EconomistFebruary 15th 2020

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t holdsharshviewsaboutimmigrants,worriesloudlyabout

racialpurityanddeteststheEuropeanUnion(eu). Forallthese

reasons,theAlternativeforGermany(afd),a far-rightparty,is

consideredtoxicinitsowncountry.AnymainstreamGerman

politicianwhodaresgettooclosetoitistainted.Nonetheless,

manyaretempted,fortheafdispopular,particularlyinthedis-

advantagedeastofthecountry,whereineachofthreestateelec-

tionslastyearit tookarounda quarterofthevote.Tomanyvoters

there,theparty’sclaimsthatimmigrants,liberalsandtheeuare

toblameforGermany’sproblemssoundplausible.Manycentre-

rightpoliticianswouldliketowoothesamevoterswithwatered-

downversionsofthesamearguments.Someeventhinkthatit

wouldmakesensetodoa dealwiththedemagogues.

Theyarewrong,asrecenteventsreveal.In

Thuringia,aneasternstate,twoofGermany’s

mostrespectableparties,theChristianDemo-

craticUnion(cdu), whichleadsthenationalrul-

ingcoalition,andthemuchsmallerFreeDemo-

crats,arenowplungedintocrisis(seeEurope

section). Their chapters in Thuringia went

alongwitha plantowrestthestategovernment

fromtheex-communistDieLinkeandinstalla

FreeDemocrataspremier.Yetthiscouldworkonlywiththehelp

ofthelocalafd, a particularlynastybranchoftheoutfit.

Thereactionwasinstant:nationalcondemnation,massde-

monstrationsanda threattobringdowntherulingcoalitionin

Berlinitself.Withina coupleofdaysthewholethinghadfallen

apart.Butthedamagehasbeenimmense.Becauseofherfailure

todefusethecrisisbeforeit happened,AnnegretKramp-Karren-

bauer,thenationalleaderofthecdu, hasfeltobligedtosayshe

willquitherjob.(Shewasalreadyonthinice,aftera seriesof

poorelectionresults,a spateofgaffesanddismalpollratings.)

Sheisalsowithdrawingfromthecontesttobetheofficialcandi-

dateofthecdutosucceedAngelaMerkelaschancellorafteran

electionthatisexpectedin2021.AsGermanycontemplatesMrs

Merkel’sdepartureafter 15 yearsinpower,it islessclearthanever

whowilltakeover.

Centristswillcelebratethatthefirewallkeepingouttheafd

hasdoneitsjob.Buttheproblemisunlikelytogoaway.InGer-

many’sdisgruntledeast,extremistsofrightandleftaresopop-

ular,andthepoliticallandscapesofragmented,thatwinning

electionsandformingstategovernmentswithouteitheroneis

increasinglyhard.Untilthereisa realignmentofGermanpoli-

tics,thechancesofanother,graverbreachofthefirewallwillre-

main.Thedangerlieswithinthecduitself,whichinthetwilight

ofMrsMerkel’sreignseemstohavelittleconsensusonwhatits

coreprinciplesshouldbe.Oneoftheleadingcontenderstotake

overfromMsKramp-KarrenbauerisFriedrichMerz,whospeaks

openlyofhisdesiretofilchasmanyashalfof

theafd’svoters.Howdoesheintendtodothat

except,tosomeextent,byapingtheiragenda?

The cdu could take a different course.

ThankstothespectacularriseoftheGreensin

recentstateelections,lastyear’sEuropeanPar-

liamentelectionsandinopinionpolls,itlooks

likelythatatthenextgeneralelectionthecdu

andtheGreenswilltogetherwina majorityof

seatsintheBundestag,openingupthechanceofa newkindof

coalition.If“black-green”istheanswer,though,a lotofhorse-

tradingwillbeneeded;thetwopartiesareatoddsoverheavyin-

dustry,euro-zoneintegration,thescaleofpublicspendingand

Germany’sdefenceposture.

Thisdebateisonlyjustbeginning.Whilethecdudecides

whichwayitwantstotakeGermany,policyparalysishasde-

scendedonEurope’sbiggesteconomy.Anda paralysedGermany

meansa paralysedeu, notleastbecauseit willtakeuptherotat-

ingeupresidencyinthesecondhalfofthisyear.Thegreatestfa-

vourthatMrsMerkelcoulddohercountrywouldbetoforcethe

pace,byannouncingherimminentdeparture.Germanymust

notgoonlikethis. 7

Bad heir day

Angela Merkel’s heir-apparent has crashed. The chancellor should stand aside

Germany

W

hen shocks hit the global economy, Wall Street looks to

history to see what will happen next. The outbreak in Chi-

na of covid-19, a respiratory disease, invites a comparison to the

last one, sars. In that outbreak in 2003 China suffered a sharp hit

to its growth, followed by a strong rebound. Although covid-

has now claimed more lives than sars, investors remain opti-

mistic that its economic effects will follow a similar path.

On February 13th Hubei province, centre of the outbreak, an-

nounced 14,840 new confirmed cases, a sharp rise. That was be-

cause it suddenly started including ct-scan diagnoses, not just

specific tests for the virus. Although the statistical fog is thick,

indicators such as the fall in new cases outside Hubei and the to-

tal of suspected cases suggest that the rate of fresh infections

may be trending lower.

Most economists have thus only nudged down their forecasts

for full-year global growth. Chinese stocks and commodities,

which track economic prospects, have clawed back ground after

initial falls. Global stockmarkets are higher than they were in

January, when the severity of the outbreak became clear. We

hope their optimism is justified. Yet the comparison makes two

assumptions: in supposing that containing the virus maps neat-

ly onto a better economic outlook; and in thinking that the world

Viral slowdown

How China’s epidemic could hurt the world economy

Disease and growth