With the lack of support for its constitution and the ongoing debates such as Turkey's accession to its community, the European Union (EU) has been dealt several blows, leaving skeptics to forecast severe doubt on the European Commission's capability to construct a positive future in the euro zone.
It is no secret that France and Germany - former powerhouses of the Union - need radical changes to pump up their sagging economies. A shared history of socialism is being challenged in both states by candidates such as Nicholas Sarkozy in France and Angela Merkel in Germany.
In the time leading to Germany's recent election, the focus had shifted toward Merkel. Refusing to be portrayed as the German Margaret Thatcher, the new leader challenged incumbent Gerhard Schr?.
Both Merkel's Christian Democratic Union (CDU) and Schr?'s Social Democratic Party (SDP) exposed their manifestos for reform, but Merkel obtained quick support and enthusiasm. The excitement was not been based on the fact that she is a woman in Germany's archaic political system but because she would be a dymanic force compared to the current political leadership.
The CDU's manifesto promises many merket reforms to revive the German economy. Merkel's tactic is clear: warn Germany's population that radical changes are necessary and that they are possible without creating too much agitation around cuts in the welfare system - a large preoccupation of the state.
As discussed by Dirk Schumacher, a German economist at Goldman Sachs, welfare state reform hits at the heart of people's anxieties and is by far the most sensitive area. Reforms in this costly welfare state have remained unclear in both parties' manifestos, but essentially the CDU's main objective would be to reduce costs in order to make labor cheaper as a solution for the high unemployment.
The SDP's manifesto announced reforms that remained in line with its current political agenda, which most consider a bundle of broken promises that Merkel was given the status of favorite leading up to the elections. But on Sept. 18, the elections gave Germany's political future an uncertain face.
Merkel won the most votes in the election, but she did not obtain enough to receive a clear mandate to govern. Gerhard Schr?'s surprising comeback led him to immediately claim his right to remain Germany's leader.
As a result, domestic and international press have claimed that this inconclusive election will give rise to the possibility of a grand coalition to govern the Germanic state. Some claim that bipartisanship is already included in Germany's political process, while others believe a coalition between the Social Democrats and the Christian Democrats is as welcome as having the devil over for dinner.
Both parties have a need to galvanize the economy's growth and reduce unemployment. In reality, the coalition will end as a political stalemate that could ruin the country's efforts toward any economic reform.
For the European Union and the international community, this deadlock has left them in doubt on whether or not to invest in the slugging and unresolved German economy. Merkel's low electoral score has dented her authority and has left her locking horns with Gerhard Schr?. Business confidence reports have continued to drop since votes were cast.
This ambiguous situation is unusual for Germany, the former motor of European growth. Though Merkel's press to achieve the Lisbon Agenda - an agreement signed by the European Union member nations in 2000 promising economic reforms to boost growth by 2010 - has been weakened in this opaque political situation, it is critical both for the future of Germany and the EU that Germany focus on economic reform. As majority leader, it is crucial for Merkel and the grand coalition to work toward greater unemployment and steady growth.
