It is hard to exaggerate how much is at stake in the German election on September 18th. Will Germany spend the next four years tackling further reforms, embracing change and globalisation not as threats but as opportunities? Or will it continue to muddle through, running the risk that reforms peter out, and even of a lurch towards economic nationalism? Which path it takes will depend largely on whether Angela Merkel, leader of the opposition Christian Democrats (CDU), which is ail-but certain to be the largest party, wins a big enough majority over Chancellor Gerhard Schroder's Social Democrats (SPD) to form a government with her Christian Social Union (CSU) sister party and the Free Democrats (FDP). If she does, and can then show that "reform in a big rich country" is possible, argues Adam Posen of the Washington, DC-based Institute for International Economics (HE), who is writing a book on the subject, Germany could become a model for other big European Union countries, such as France and Italy. Conversely, if Ms Merkel loses, or is forced into a do-little "grand coalition" with the SPD, the German experience could become an excuse for much of the rest of Europe to do nothing too.
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