Fiscally conservative Romney-Ryan ticket: Does it appeal in Germany?
Germany has promoted austerity as central to fixing eurozone woes. So is there any resonance between Chancellor Merkel's views and the Romney-Ryan ticket?
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Little social security
Merkel's politics are based on the social economic market, an economic model most political parties have followed since World War II. It's a compromise between social democracy and economic liberalism, combining private enterprise with government regulation to establish fair competition. “Extensive cuts in social benefits, like Paul Ryan’s proposal to privatize Medicare, are not part of her political vision,” says Henriette Rytz from the German Institute for International and Security Affairs in Berlin. Germans have questions about how a Romney-Ryan team would cut government spending while expanding the military budget. And experts raise concerns about more social cuts in a system that – compared to Germany – has little social security.Skip to next paragraph
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Moreover, whoever wins the presidential race in November is going to face a tough economic outlook for 2013. According to the Congressional Budget Office, the first half of 2013 will be difficult if currently planned spending cuts and tax hikes go into effect, with US GDP shrinking by 2.9 percent, followed by a second half growth rate of 1.9 percent.
This outlook will influence US foreign policy, Braml says. “Neither a Democrat nor a Republican will have a lot of leeway. Because of its own economic problems, the USA will try to shift much of the burden onto its allies in Europe and Asia.”
Looking at this global crisis, Merkel favors an austerity policy but also promotes a regulation of the financial sector and a financial transaction tax, something Romney would most likely not agree on.
Merkel might give a future president Romney a warm welcome as a sometime-fellow conservative, but the differences in their economic policies would not likely translate into an immediately tight-knit relationship. And at any rate, for the next year, with an election looming, Merkel's main preoccupation jibes more closely with Obama's: getting reelected.