It’s the economy, stupid. Or this election is stupid. I can’t make up my mind. After 10 days away, I’m back in touch with the world and the level of interest in the German election, even in the UK media, seems to be growing. A stinging attack on Gerhard Schroeder in today’s Guardian by Martin Kettle prompted me to write this entry, but I still can’t quite get to grips with all of the dynamics of this election. Or indeed the lack of dynamism!

Merkel and the CDU are odds-on to win. With unemployment of 5 million, it would be a miracle for any incumbent party to manage to succeed. So it will be goodbye to Schroeder, no hair dye and all.

But what of Merkel and the CDU? The comments by Paul Kirchhof, the finance spokesperson in Merkel’s team, that he is in favour of a flat-tax and a generally simplified taxation system have been roundly criticised. The Frankfurter Allgemeine has an excellent analysis of the impacts of Kirchhof’s proposals here. [Google machine translation to English here.] On the other hand, the CDU has said it wasnt to put up VAT by 2% – seems quite mad when German consumers are just not buying enough at the moment! Edmund Stoiber has been causing a fuss too, with his comments about East Germany and how everything would be OK if all of Germany was more like Bavaria.

The polls are far from showing a resounding victory for the CDU in coalition with the ‘liberal’ FDP. The combined vote of the Links Partei, Greens and SPD looks like it could come close to the vote achieved by the left 3 years ago.

In the UK, the British government seems to be jumping up and down with joy at the prospect of a Merkel victory. Some irony after all the 3rd Way / Die Neue Mitte fuss of the late 1990s [Read the historic paper here]. Having also had a high-profile meeting with Sarkozy, prophecies that Merkel might be a determined market liberaliser look like they are going to be wide of the mark.

So what are we going to get? A different style of politics. A more divided left. Maybe a bit of a boost for the economy. But we might have to wait for the Football World Cup next year for things to really change in Germany.

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