When Angela Merkel and Emmanuel Macron unveiled their groundbreaking plan for a €500bn pandemic recovery fund last May, one leading German politician expressed deep misgivings. This weekend, he might be elected leader of Ms Merkel’s party.
Friedrich Merz said the idea of the EU raising money on financial markets and distributing it as grants to member states was “bumping against the limits of the [EU] treaties”.
As an MP he had promised voters that the eurozone would not become a “transfer union” — a system where rich nations such as Germany bailed out their poorer neighbours. “I feel myself to be bound by this promise,” he said.
Mr Merz, a millionaire lawyer and former chairman of BlackRock Germany, is one of three candidates standing in a digital election on Saturday evening for leader of the Christian Democratic Union, Germany’s most popular party.
A victory for Mr Merz, whose views on the EU have more in common with the “frugal” nations such as Austria and the Netherlands than with Ms Merkel, could have profound implications for Germany’s role in Europe.
Vowing to make the CDU more conservative, Mr Merz is polling slightly ahead of his two rivals, Armin Laschet, prime minister of North Rhine-Westphalia, and Norbert Röttgen, chairman of the Bundestag foreign affairs committee.
The winner will be in pole position to run as the CDU’s candidate for chancellor in September’s Bundestag election and then succeed Ms Merkel, who is quitting the political stage after 16 years as chancellor.
The change at the top will have huge ripple effects across the EU. Ms Merkel has earned the reputation of the bloc’s most experienced crisis-manager, a role she has reprised during the coronavirus pandemic. A rock of stability, she is widely respected for her ability to resolve conflicts, find compromises and mediate between opposing camps. A new chancellor will inevitably mean a new style of German leadership in Europe.
“The way Germany brings its weight to bear in the EU will change, and that will have far-reaching consequences,” said Herfried Münkler, a political scientist at the Humboldt University in Berlin. “This [Merkel] role of honest broker, of mediator — it’s coming to an end.”
The shift will be most marked if Mr Merz becomes chancellor. “It would be a different style, much rougher and bossier,” he added.
In their public utterances, the three candidates have shown remarkable unanimity on issues such as Europe. All are fervent supporters of the EU, committed to the Franco-German partnership. But Mr Laschet stands for continuity with Ms Merkel’s course in Europe, whereas Mr Merz occasionally strikes his more conservative tone.
In a book published last year — New Times, New Responsibility — he said Germany must “learn the language of power”.
“More than ever before, we have to defend our interests within the European Union,” he said.
In a debate between the three candidates this month, Mr Merz, who served as a member of the European Parliament for five years, also expressed reservations about further steps towards EU integration.
“I’m sceptical about transferring more powers to the European Union,” he said. “The EU will only have a future if the nation states remain [its] key pillars. I don’t want to see an EU in which our identity dissolves and we’re all just Europeans.”
In a debate last month he also took a potshot at the European Central Bank, bemoaning the effect of its low-interest rate policy on “private savings” in Germany and the “property market”.
“I am increasingly critical . . . of ECB policy,” he said.
“Merz plays to that section of the CDU who constantly fear Germany is being ripped off by other EU member states,” said Lucas Guttenberg, deputy director of the Jacques Delors Institute, a think-tank. “There is a large constituency who think every deal the EU makes is detrimental to German interests.”
On some issues, however, Mr Merz advocates much closer co-ordination between EU states. In EU foreign policy, for example, he wants to see unanimity replaced by qualified majority voting, to allow the EU to project its power in the world more effectively.
It is an idea that is also backed by Mr Röttgen, who has said the EU risks being “pulverised” between the US and China in their new great power rivalry. Both he and Mr Merz advocate the creation of an avant-garde of EU member states that could better assert a “European voice” in global affairs.
“Do we want to keep playing in the lower leagues, every man for himself, or . . . in the Champions League, to play a role in the world?” Mr Merz asked.
His other positions on Europe are in the CDU mainstream. He is in favour of completing EU banking and capital markets union and creating a single market in energy. He wants the EU to invest more in R&D, in its rail network and in digital infrastructure. He also says the bloc must reform its competition law to allow the creation of European champions.
He is generally supportive of the coronavirus pandemic recovery fund, saying in May that it was good that Germany and France had seized the initiative, and that Berlin had a “fundamental interest” in a functioning EU single market. But he has reservations. In his book he notes EU treaties forbid the bloc from taking on debt. He also raises questions about how the fund will be deployed.
“What’s actually happening with this money?” he writes. “Will it flow into European projects or, in a more-or-less uncontrolled fashion, into national budgets?”
But even if he wins, Mr Merz may struggle to fundamentally shift the CDU’s policies on Europe, which are largely the preserve of its powerful parliamentary caucus — a group that is generally hawkish on eurozone integration but can occasionally show flexibility: it supported Ms Merkel over the recovery fund, for example.
“A Merz victory will not change the CDU’s approach on Europe overnight — the party is much too heterogenous for that,” said Mr Guttenberg. “Fundamentally, the CDU does not know what it wants the EU to become, and in that respect, Merz seems to fit the part.”