EU at big risk of Greece-style collapse by recovery mismanagement after loss of Merkel

EU: 'Big risk' of economic recovery mismanagement says expert

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Speaking to the BBC’s World at One on Tuesday, Mujtaba Rahman, the European managing director of political risk company Eurasia Group warned Ms Merkel’s departure from the bloc could trigger a chaotic downward spiral of the European Union’s economic recovery from Coronavirus as he suggested “big questions” lie ahead with Germany’s new leadership.

Mr Rahman explained that a major reason for this was that Angela Merkel was “really effective” at keeping the 27 member states united and that her replacement could prove not so good at this.

He warned how due to Germany’s role within Europe and Merkel’s belief in it, the project is now threatened by a coalition that he suggested could lose control of its economic recovery.  

The expert went on to issue a sobering warning that he feels the breaks could be “put on too early, probably in 2023, that stifles the economic recovery” of the bloc.

Mr Rahman added such a move could create a host of “consequences” that are waiting in the wings.

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The political expert warned how a similar situation that was seen with Greece’s devastating economic crisis could be repeated if the bloc and a new Germany premier do not take the issue of recovery seriously.

He said: “If you think back to what happened ten years ago with Greece and all of the austerity implemented many would argue unnecessarily…

“Look what that did to populism and internal cohesion within Europe.”

He added how “these are big questions” for the European Union to consider as Merkel departs and a new leadership takes control of both Germany and a plays a pivotal role within Europe.

 

Angela Merkel heckled during speech in German Bundestag

Mr Rahman concluded: “Trying to understand the role Gemrnay will play in either being helpful or not in addressing them is really the thing we are all looking at when this government is formed.”

His comments come as chaos has erupted within Angela Merkel’s German Christian Democrats (CDU) party following the party’s worst general election defeat in its history on Sunday.

The defeat has seen German conservative leader and Merkel’s heir, Armin Laschet, face mounting unrest within his party to end his bid to form a coalition and quit.

The calls come despite Mr Laschet’s party remaining only 1.7 points behind the Social Democrats (SPD).

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Meanwhile election winner Olaf Scholz of the SPD wants urgent talks with the two parties whose support he needs to form a government but this could take the form of a number of coalitions.

Half of Germans want Mr Scholz to run the country with the Greens and the FDP in what they brand as the “traffic-light” coalition, because of the party colours.

While 22 percent think it should be Mr Laschet’s conservative CDU at the helm of a “Jamaica” coalition involving: CDU/CSU, FDP and the Greens.

Both parties remain in the fight for power as they seek to win over possible coalition partners meaning a result could take until early 2022. Ms Merkel will remain in power until a coalition is decided.

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