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Opinion: The sick man is Europe

The European Union will survive what's coming, but many European governments will not.

Merkel’s shrinking circle

While her next scheduled date with the electorate is not until 2013, Merkel’s dwindling base of support within the CDU and among the public could lead to a no confidence vote — or the defection of the Free Democrats. That appears unlikely in the next few months, though the emergence of another Greek-style sovereign debt crisis — requiring Germans to step up again — could provide an opening her rivals would find hard to resist.

In the meantime, an increasing debate over Germany’s sizeable contribution to the Afghan War (5,500 troops) simmers away. As in America, the economy overshadows public discontent over German casualties (47 deaths), but one bad night in Kunduz could change that reality.

Whatever Merkel’s fate, her troubles have prevented Germany from stepping into the leadership role Europe so badly needs right now. The consensus muddles along, meanwhile, and the really difficult restructuring of EU finances (and political arrangements) gets kicked down the road again.

Best Before May 2011

Whatever relief Britons feel in seeing the increasingly impotent Labour government replaced, the fact is new British Prime Minister David Cameron and his Liberal Democrat deputy prime minister, Nicholas Clegg, disagree on basic tenets of government, particularly on social welfare spending (where Lib Dems would spend more) and defense and foreign policy (where Lib Dems would spend far less).

Nonetheless, Lib Dems have agreed to go along with much of the austerity Cameron has prescribed in exchange for a scheduled referendum on electoral reform to be held in May 2011. This long sought Lib-Dem dream aims to disentangle the way parliamentary seats are apportioned, which results in the third party never getting a proportionate share of seats. For Lib-Dems, this is the point of the coalition.

Whether the electorate accepts or rejects the reforms is uncertain. More safe to say is that Lib-Dems probably will countenance many things that run against their beliefs to stay in power long enough for the referendum to be held in 2011. After that, the Conservative-Lib-Dem partnership may prove difficult to sustain. Britain could see a new election next year, if the Tories work against Lib-Dem interests in the referendum, or even renewed talk about a Lib-Dem-Labour partnership.

Scent of a woman

Nothing if not entertaining, Sarkozy’s troubles with the perfume heiress may carry the seeds of his destruction. Secretly taped conversations allegedly suggest Sarkozy’s labor minister, Eric Woerth, may have moved to block a legal action filed against the woman in exchange for political donations.

The opposition Socialists have demanded the resignation of Woerth, the architect of France’s vital pension reforms, an outcome that would raise questions about the ability of a weakened government to press forward with structural reform.

But the Bettencourt affair shone a light on other inside dealings between Sarkozy’s center-right UMP and political donors, all in contradiction of his advertised intention to halt such practices. Sarkozy likely will survive as Charles de Gaulle’s presidential form of government would require impeachment to remove him. Since a French president is elected independent of parliament and effectively immune from prosecution during his term, impeachment seems unlikely, but his party’s hold on government appears seriously threatened.

So, there is a strong prospect of early French elections: Sarkozy’s poll numbers hover near record lows for a French president, and his party took a beating at the March provincial elections. New elections could well bring a period of “cohabitation” in which Sarkozy must work with a socialist government or socialist-led coalition.

http://www.globalpost.com/dispatch/worldview/100810/european-union-economy