Failure to find Irish IOUs solution would affect all of EU, says would-be chancellor
Eamon Gilmore with Peer Steinbrück on Sunday: Ireland should be able to rely on EU commitments from last June.
ANALYSIS:Peer Steinbrück is tough on corporate tax but supports a promissory note deal, writes DAN O'BRIEN
When Germans last elected a federal government in 2009, few outside the country paid much attention to the campaign that preceded the poll. Chances are that everyone – in Ireland and across the rest of Europe – will be watching this year’s campaign much more closely.
Since the sovereign debt crisis fundamentally changed Europe’s power dynamics and propelled Germany to the position of undisputed hegemon, the politics of the continent’s economic powerhouse has come to matter more to everyone. As the only person with any chance of ousting Angela Merkel in September’s election, Peer Steinbrück is the man to watch.
The chancellor-candidate of Germany’s opposition Social Democrats started a two-day visit to Dublin on Sunday, the first stop on a four-country pre-election trip designed to bolster his credentials as a statesman at home and abroad.
Over breakfast yesterday he was refreshingly forthright, deciding – seemingly on the spot – to speak on the record. Not mincing words on the issue about which we Irish exhibit something of a siege mentality – corporation tax – Steinbrück said that had he been in government when Ireland was bailed out in November 2010 he would have insisted that the rate be hiked. Nor has the issue gone away. He had “agreed to disagree” with Tánaiste Eamon Gilmore when the two discussed the matter on Sunday.
If Steinbrück’s plain speaking on profits tax will not endear him to corporate Ireland and others besides, his comments on the issue about which we currently collectively obsess – the promissory notes used to bail out bank creditors – will cause less disquiet.
He echoed his electoral rival’s description of Ireland as a “special case” and said that the Government should be able to rely on commitments entered into on June 29th last by EU leaders. The man who could be chancellor by the autumn expects a deal on the IOUs within weeks, adding that failure to reach a solution would have “European implications”.
Steinbrück is not joining the expanding legions of those who proclaim the sovereign debt crisis is over. “Nobody knows” whether the worst is over, he said, shrugging.
Although cautious about criticising the Merkel government while abroad, the 66-year-old social democrat believes there should have been more frankness from the beginning of the crisis. In May 2010, Merkel should have told the German people they were partly liable for the costs of the crisis.
But that was then. Despite his party at times having taken a more integrationist stance on addressing the crisis than the Merkel administration, he is not committing to radical change beyond “better economic governance structures” for the euro zone.
He also baulks at the notion of greater German leadership in Europe. While elites in some countries may welcome a more proactive government in Berlin, “old resentments” still linger among the continent’s peoples and could cause problems in the future he worried. (That he is half-Danish may not be irrelevant in explaining his sensitivity to fears in other countries of an over-mighty Germany.)
The most likely outcome of September’s election, opinion polls have consistently suggested, is for Steinbrück’s party to re-enter coalition with Merkel’s conservatives, but as the junior partner. If that happens, the veteran has said he has no intention of playing second fiddle to Merkel again and will withdraw from frontline politics. For Steinbrück, it is the chancellorship or bust in federal election 2013.