The next time Chancellor Merkel and President Obama get together, they could compare notes on their experiences with waiting for an important decision from their respective Supreme Courts. In June, Obama got a lift from his Chief Justice regarding the constitutionality of the Patient Protection and Affordable Care Act. This week, Merkel got what she was hoping for from her court on the constitutionality of the European Stability Mechanism and, therefore, the next steps in the fiscal union of Europe.
However, there was a major difference. Obama faced a split Supreme Court tipped by the Chief Justice in his favor. Merkel was given a unanimous vote, as is the custom of the German Federal Constitutional Court. But in both cases the courts gave the same type of signal – yes, but.
The impact on President Obama and Chancellor Merkel is the same mixed bag. They can claim confirmation of their policies, but they also need to make some adjustments. More significantly, both Merkel and Obama still face strong political headwinds in convincing their respective publics about certain aspects of their agendas. Just as most Americans seem to hold a highly dubious opinion of ‘Obamacare’, most Germans remain highly skeptical about bailing out the rest of Europe. Merkel and Obama still have some heavy lifting ahead of them when it comes to persuading voters about their strategies − Obama must do so in less than two months; Merkel must make use of the year ahead of her next election in September of 2013.
Chancellor Merkel comes out of her respective Court’s decision in better shape than President Obama. She has a basic consensus supporting her in her own party, as well as within her coalition, despite some critical voices from the Bavarian sister party, the CSU, or from the FDP. In addition, she does not face significant opposition among the Social Democrats or the Greens. This latter fact opens up options for her in next year’s election regarding other coalition partners if, that is, the current equation with the FDP and the CSU does not hold.
Yet, there are still a lot of dark clouds gathering on the horizon. The economic outlook for next year is anything but rosy, and the fracture lines within the euro system remain serious when one looks at Italy, Spain, and the continuing struggle in Greece.
Following the announcement of the decision in Karlsruhe, Merkel’s mantra remains the same as it has been all along, as her speech to the Bundestag on Wednesday reiterates: “It is a good day for Germany and a good day for Europe.” But the fact is that while most of the political elites might agree with her, along with the majority of the press, one needs to look no further than the Frankfurter Allgemeine or the widely read daily Bild to capture the sentiments among millions of Germans worried about their economic future.
As the recently released Transatlantic Trends Survey reflects, the majority of Germans feel that the engagement with the EU, and indeed with the euro, remains a positive thing for the country. And a majority sees Chancellor Merkel as handling the challenges well. Yet, the country is not totally convinced that handing over more sovereignty to Brussels is a good idea, even though the survey reports that Germans were the only ones in a slight majority of 53% who would support such a move. That is no landslide. Furthermore, some thirty-six thousand Germans signed on to the law suit against the ESM case in Karlsruhe, all of them worried that Germany is in danger of losing control over its economic future.