The politics of adjustment and the role of the media Left vs. Right, - - PowerPoint PPT Presentation

Wolfgang Proissl, Financial Times Deutschland, Frankfurt

Left vs. Right, and the Rise of Populism

The politics of adjustment and the role of the media

Poros Image Hotel | Poros | 9 July 2011

2 | The politics of adjustment and the role of the media

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The crisis has put euro member states under severe stress in the past 18 months

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For Greece, Ireland and Portugal it is the trauma of applying for an EU/IMF rescue and of undergoing harsh economic adjustment

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For Germany, the Netherlands, Finnland and Austria it is political controversy about providing assistance and about EMU as a transfer union

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This presentation focusses on the adjustment in Germany and the role of the media there

Scope

3 | The politics of adjustment and the role of the media

The crisis in a nutshell from a European perspective (I)

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The crisis from a European perspective (II)

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The crisis in nutshell from a European perspective (III)

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The crisis in a nutshell from a German perspective (I)

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The crisis in a nutshell from a German perspective (II)

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Why are the Germans so upset?

Helmut Kohl, Theo Waigel, Hans-Dietrich Genscher, Hans Tietmeyer and many others promised in the 90s: EMU will be based on strict budgetary discipline (Theo Waigel: „Three point zero percent is three point zero percent“) The institutional setup is based on the Bundesbank template, the ECB is at least as independant No monetization of debt (Weimar, post war WW II monetary reform) Every member state is responsible for its own fiscal policy (no-bail-out-clause) Bavarian PM: „A famine in Bavaria is more likely than a transfer union in Europe“ Despite all those assurances it is unlikely that a majority of Germans would have voted in favor of EMU had there been given a chance to do so Against this backdrop the evolution of the eurozone in the past 18 months is not accepted by a considerable part of the public opinion and delegitimizes the euro and the EU

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Personal advantages or inconveniences as a result of the euro

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Evolution since June 2001

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55,7 % support non status quo solutions: return of the DM or kicking poorer euro members out and forming a core euro zone

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Erosion process

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Eurobarometer: 54% of the Germans „tend not to trust“ the EU

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The media‘s positioning (I): support for the rescue policy

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The media‘s position (II): sceptical about/opposed to the rescue policy

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The media and the emergence of populist party in Germany

Ongoing developments in the Eurozone and the disgruntlement in public opinion, parts of the political and economic establishment and parts of the press create ideal conditions of the emergence

• f a populist anti-euro-movement or party in

Germany Most of Germany‘s neighbors have populist parties: the Netherlands, Austria, France, Italy, Belgium, Denmark, Sweden, etc. In the context of the euro debate Finland saw the emergence of an anti-euro-rescue-party, the „True Finns“, which could serve as a model for Germany But so far there is no sign of the emergence of the „True Germans“ Why?

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There is a populist movement in Germany – it‘s called „Bild“

The mass circulation daily sells roughly 4 million copies a day and it is read by an estimated 10 to 12 million people every day Its agenda setting power is stronger than that of all the above mentioned publications conbined The paper has direct access to the chancellor‘s office, but the chancellor‘s office also has direct access to „Bild“

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„Bild“, the euro crisis and the ECB presidency

When the euro crisis became critical in Greece chancellor Merkel first stuck to a very tough line upholding the euro principles mentioned above She was appauded and cheered by „Bild“ who called her „our iron chancellor“. The Bismarck-Merkel-cartoon appeared in „Bild“ on March 25, 2010

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The fools of Europe, inflation and pasta

When Merkel changed course in May 2010 and agreed to the rescue of Greece and the creation of the EFSF „Bild“ severely criticized her and the decision.The headline on the entire upper half of the front page said: „Once again we are the fools of Europe“ „Bild“ ran campaign against the rescue of Greece that sometimes crossed the limits of xenophobia In parallel the paper‘s editorial line on the ECB presidency became, that Germany must now get compensated by getting the ECB presidency On February 11, 2011„Bild“ ran a story endorsing Axel Weber and denouncing other candidates. About Mario Draghi the text said: „Mamma mia, with the Italians inflation is part of life as tomato sauce is part of a pasta dish“

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„Bild‘s endorsement for Draghi

From the outset it was clear that Mario Draghi was the most qualified of all candidates When Axel Weber resigned Merkel could not come up with another credible candidate In May „Bild“ changed course completey and ran a story declaring that Draghi „was actually pretty German, even really prussian“ and the paper awarded him with an honorary German citizenship. Merkel announced her endorsement only days later.

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Conclusion

The euro crisis has created a disgruntlement in the German public that populists can exploit There is a controversial democratic debate in the media about the pros and cons of the current course One exceptionally powerful press outlet has used the disgruntlement distructively but it has also contributed to canalize it So far no populist movement is in sight The real political stress test will come with the federal elections in 2013

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Wolfgang Proissl Chief Correspondent G+J Wirtschaftsmedien Nibelungenplatz 4 60317 Frankfurt Germany Telefon: 069/153 097 13 Telefax: 069/152 097 52 E-Mail: proissl.wolfgang@guj.de