Achtung hier, bitte!

Please do not allow yourself to be distracted by the farce of David Cameron’s position on Syria (or, for that matter, any other important issue) and ignore the avalanche of meaningless political rhetoric which will be pouring out of the forthcoming party conferences.

The only event that matters takes place on 22 September 2013.

The German Chancellor, Angela Merkel, will be re-elected for an unprecedented third term. She and her Christian Democratic Union are well ahead in the polls. She has a strong economic position with an intact AAA credit rating, one of the lowest unemployment levels in Europe (5.4%) and a growing economy with a growth rate of 0.7% in the second quarter of this year. Manufacturing has recorded its fastest growth spurt for two years. Germany is reducing its public debt although there is further to go. Nominal interest rates remain low.

It is not surprising that the Chancellor is considered to be the second most powerful person in the world.

Napoleon once said, when appointing a general, “Yes, I know he’s good, but is he lucky?”

To some extend Mrs. Merkel is fortunate. With the British Prime Minister keen to demonstrate that he is a power crazed, intellectually weak, egotist and a succession of French leaders achieving better headlines with their amorous adventures rather than their political leadership, it has not been difficult for the highly professional and disciplined German leader to take centre stage.

But Mrs. Merkel is blessed with great vision and diplomatic will. She has, almost single-handedly, held Europe together and her support for Greece (with serious strings attached) has kept the euro-zone viable. She has treated David Cameron’s posturing (as instructed by Bill Cash and John Redwood) on budget matters in a motherly fashion and a minor irritation.

From the United Kingdom’s position the good news is that German commentators are predicting that German policy, post the election, will be unchanged. With, as John Cridland of the CBI continually argues, Europe being our most important trading ally, this can only be positive news. One suspects that Mrs. Merkel considers Nigel Farage to be bonkers, which he is.

The Governor of the Bank of England wants to keep interest rates low. A stable euro-zone will help him enormously.

He will be watching,with great interest, the German election results on 22 September 2013 as, of course, will be the Greeks!


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