After 13 year of ruling Germany, Merkel is to continue ruling it as Social Democrat party members approved a coalition deal that gives them key ministries, including finance, with 66% voting in favor.
Merkel is now on her way to become the longest ruling head of state in living memory, with her premiership set to guide Europe through one of the most challenging and transformative times.
A banking union may well be underway. Perhaps even an EU state in all but name as the Greek crises directed Europe towards full integration.
That’s dependent in part on Italy, which is today holding an historic vote on the direction of its own country and that of Europe.
M5S, which is expected to win the popular vote but not necessarily the biggest number of seats in parliament, has now ruled out a euro referendum in a uturn last month. Opting instead for a bigger say in EU lawmaking.
Italy’s centre right however, which might win the largest number of seats, is in coalition with a very euro-skeptic party. Yet, they too will probably opt-in for reform rather than an in or out.
That means Germany and France are in the driving seat of bringing forth an EU state in all but name, especially in the eurozone.
As far as this space is concerned, German lawmakers have been very slow to adapt, while the French ones appear hostile.
The reason why German lawmakers may have been so slow is because the country isn’t known for competitive strength in the financial sector. However, something changed last year.
The rise of ethereum has considerably expanded the application of blockchain tech, including to areas where Germany has a significant competitive edge, industry.
German industry is more advanced than all others as far as this space is concerned and they have in many ways been leading.
We have covered quite a few of their pilots, test and so on, and even some production ready blockchain implementations.
Their car industry was one of the first to see the opportunities and they continue to expand in their application of blockchain tech. Their energy industry too was an early adopter, with national grids and micro-grids testing blockchain tech efficiency.
It is not surprising therefore that their coalition agreement mentions blockchain tech and cryptos a number of times. The very first document of its kind to do so as far as we are aware. They say:
“We want to develop a comprehensive blockchain strategy and work for one adequate legal framework for cryptocurrency and token trading at European and international level.
The possibilities of cash payments are to be expanded in the digital age. Anonymous payment with cash must remain possible…
In the Federal Government we will use innovative technologies such as Distributed Ledger (Blockchain), so that based on these experiences a legal framework can be created.”
What they seem to mean by a “legal framework” is AML/KYC regulations which are already applied by major exchanges and crypto custodians.
It’s unclear what approach they would take towards ICOs, especially considering many of their engineering start-ups struggle to raise money.
Yet they could easily be funded by the public through smart regulations such as say caps of $10-$20 million and perhaps a limit of $5,000 per unaccredited investor. Thus making their industry a lot more dynamic and competitive.
Where industrial applications of blockchain tech are concerned they would probably fully back them and indeed they would probably implement the technology themselves in civil service functions.
In political dynamics, AfD is now the official opposition in Germany. They are led by a bitcoiner, Alice Weidel, who might be smart enough to capitalize on any mishaps towards this space by the ruling coalition, and thus perhaps win over some from the blockchain constituency.
So they’ll probably be accommodative, especially considering Berlin has a vibrant crypto scene with Germany already signaling some friendliness by taxing cryptos as any fiat money when they are used as currency like UK does, but unlike USA’s double taxation.
The big test comes later this month at the crypto G20 which was led by German and French bankers calling for crypto regulations.
That bankers are so leading the push is not a surprise in this space as banks have now come out to publicly say they see cryptos as a competitive threat.
But whether Germany’s civil service will be able to see through it like the British did, and weigh the self-interested lobbying of one group against that of their national interest to keep industry competitive and utilize 21st century technological innovation, remains to be seen.