Some European Implications of Japan's Nuclear Accident

The Japanese nuclear accident has implications for Europe. The EU wants to have stress tests on members nuclear plants. The tests are not mandatory, but may be difficult to refuse. Switzerland has halted its nuclear program, according to reports. Perhaps the most interesting response is in Germany.

Chancellor Merkel has been an advocate of extending the use of nuclear power in Germany and until yesterday was seeking to extend the operation of seven of the oldest (of 17) nuclear plants. She bowed to strong pressure announced a stoppage of these old nuclear reactors a day after she and announced a 3-month moratorium of the extension she had previously sought.
A recent poll showed that some 80% of the opposed Merkel's extension and nearly 3/4 wanted the oldest plants to be shut down. The national sentiment may be less important at the moment that the upcoming state elections. The March 20 election in Saxony Anhalt is not seen as key as the following week's elections. There are three on March 27: Hesse, Rhineland-Palatinate and Baden-Wurremberg (BW).

BW is most important. The CDU has been governing the state for more than half a century. As always, local issues are important. The Stuttgart21 railway station expansion was controversial and supported by the CDU premier. There was a popular backlash that the Green Party has capitalized on, and it has seen its support in recent polls move toward 25%, which is twice what they are polling nationwide.

BW is home to two of the 7 old (pre-1980) nuclear facilities. The CDU campaigned (2009) campaigned on expanding the use of nuclear power and extending the lifespan of the existing nuclear plants, overturning the decisions by the previous (SPD) government. Merkel's reversal yesterday to shut down the seven old plants after first only seeking a safety review seems to reflect 1) under-appreciation of how the Japanese accident is impact public concern and 2) her political prowess and flexibility.

Nuclear power accounts for a little more than a fifth of German electricity generation. The risk is that the price of electricity will rise in Germany and this feeds through; although a small weight in CPI, the direction of the pressure is clear.

A take away is that the Japanese nuclear accident may increase the likelihood that the CDU losses control of BW, despite Merkel's attempt to align her position more in line with public opinion. Merkel has been dealt a number of setbacks in recent weeks and tragedy in Japan could be yet another one in terms of domestic politics. A weakened Chancellor may also make it more difficult for her have the European agreements ratified by parliament.
Some European Implications of Japan's Nuclear Accident Some European Implications of Japan's Nuclear Accident Reviewed by Marc Chandler on March 16, 2011 Rating: 5
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