As citizens of the eurozone's largest economy prepare to vote in elections for the Bundestag on 22 September, Germany's European counterparts are paying closer attention than in previous years. Across the continent, politicians and businessmen are waiting anxiously to learn what the results herald for the German government's evolving approach to the many outstanding structural challenges that still haunt the eurozone.
Once the make-up of Germany's new government is decided, the present informal moratorium on the discussion of sensitive and complex issues such as banking union will be lifted. The conventional wisdom is that a newly elected government – most likely with Chancellor Angela Merkel still at its helm – will have more political space to take bolder lines on issues ranging from a common deposit scheme to the issue of commonly guaranteed debt by eurozone member governments.
The eurozone – 17 countries using the euro as a common currency – has been dogged by crisis since 2009 and has had to organise financial rescues for Greece, Ireland, Portugal and Cyprus because a loss of confidence caused by debt problems cut off their access to external finance and threatened to break up the currency union. Merkel led European governments' cautious, step-by-step approach, demanding unpopular economic reforms and budget austerity in return for emergency loans. A combination of measures by governments and the European Central Bank caused the crisis to ease in 2012, and a modest economic recovery now seems to be under way across Europe.