As in Europe the turmoil in German politics is scrutinized. Report Ft

EU leaders surprised themselves and others by agreeing on an unprecedented package of loans and joint expenses this summer. The biggest factor that made this possible was a shift in the position of Europe's largest country: Germany agreed with France to push for a massive debt-financed grant program. The EU recovery fund shows that when in a year the Germans go to the polls to elect Angela Merkel's successor, the way they choose matters as much for the rest of Europe as for them – writes the FT .

As for economic policy, the German position on European issues was already changing. Under the leadership of Olaf Scholz, a Social Democrat, the finance ministry has moved away from traditional orthodoxy towards a more ambitious approach to EU economic cooperation. He is also a candidate for the post of chancellor of the SPD. While the SPD chases the Greens in the polls, Scholz's European economic policy positions are noteworthy, as if anything the Greens could go further in any future left-wing coalition government.

In a speech to Bruegel's think-tank earlier this month, Scholz embraced the goal of a fiscal union, a dirty word of German politics, especially with the center-right CDU and CSU, the older partners. of today's coalition. It has also long ago expressed the will for a "big deal" to create a unified European banking system. Now he calls for more fiscal policy decisions to be made without unanimity among EU member states – "fiscal union without avoiding tax arbitrage [is] unthinkable," he told Bruegel – and to quickly identify the major ones. tax revenues that the EU should be able to collect for itself to service the new common debt.

A new CDU / CSU-led coalition, especially if under a new leader closer to her right flank than Mrs. Merkel, would instead tame her enthusiasm for something resembling a greater fiscal union. The unfinished race for the leadership of the CDU also counts for the rest of Europe.

The economy is not the only sector where the outcome for German parties and individual leaders over the next year can make a big difference beyond its borders. Defense and security will see "a huge difference depending on the outcome of the elections and the ruling coalition," said Justyna Gotkowska, an analyst at the Warsaw Center for Oriental Studies.

A CDU chancellor who rules with the Greens "will keep the balance between cooperation within NATO and investment in security initiatives within the EU," he said. For a left-wing coalition, however, "cooperation within NATO and with the United States would be more controversial". It may be more engaged in EU cooperation, but EU cooperation may not lead to great results ”in terms of defense capabilities. This would affect countries on the eastern side of Europe, he stressed.

Germany is also important for how Europe will address pressing digital policy issues, said Marietje Schaake, a former Dutch liberal MP. Germans have "a fairly consistent view of digital challenges" across the political spectrum of parties, he stressed. The country's "historical sensitivity to state surveillance" and "what is at stake when there are no controls on power, even in the digital realm" informs support for such protections as the right to privacy.

But the next political races could influence “to what extent this is a geopolitical agenda and what role Germany wants to play in this field. . . someone like [Norbert] Röttgen is much more sensitive about the role of China and 5G, ”said Ms Schaake, referring to the CDU chairman of the Bundestag foreign affairs committee and one of the longest running candidates to lead the party.

Since much of the digital space is unregulated, issues such as cybersecurity, threats to democracy and platform regulation will be "fundamentally decided" over the next decade, Ms. Schaake said. "Europe must accelerate [decision making] at the intersection of geopolitics and technology – and this cannot be done without German leadership."