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Full steam ahead for Donald Trump after Supreme Court ruling

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AN OBSCURE patch of the constitution from 1868 never looked likely to keep Donald Trump off the presidential ballot in 2024. It was not clear that the idea of turning to Section 3 of the 14th Amendment—which bars officials who engage in “insurrection or rebellion” from holding future office—would gain traction in any of the 35 states where lawsuits emerged. But litigants had a viable claim: after taking an oath to protect the constitution, the 45th president had arguably thwarted the peaceful transfer of power on January 6th 2021 and was therefore (according to Section 3) barred from recapturing the presidency. Judges and officials in Colorado, Maine and—just last week—Illinois found this reasoning persuasive.

On March 4th, a day before Colorado and 15 other states are set to vote in primaries on Super Tuesday, the Supreme Court punctured any remaining hopes that the post-civil-war provision (originally designed to keep former Confederates at bay) would stop Mr Trump’s third run for the White House.

The justices voted unanimously to reverse the Colorado Supreme Court’s ruling that disqualified Mr Trump from the state’s primary ballot. They had given strong hints in the hearing on February 8th. Justices from right to left said that states may not unilaterally erase presidential candidates from the ballot because they are purported insurrectionists.

The decision is “per-curiam” (“by the court”) with no noted author. It proceeds on the premise that the 14th Amendment was intended primarily to restrict state autonomy—an emphasis that militates against giving states latitude to remove candidates themselves. The opinion also leans heavily on Section 5 of the amendment, which assigns to Congress the “power to enforce” the amendment’s many guarantees (from the “equal protection of the laws” to the bar on unduly depriving people of “life, liberty or property”). It is fine, the court notes, for states to disqualify candidates for state office. But “with respect to federal offices, especially the presidency”, the constitution “does not affirmatively delegate such a power to the states”.

The court writes that “state-by-state resolution” of the disqualification question “would be quite unlikely to yield a uniform answer” across the country. The “patchwork” that would result “could dramatically change the behaviour of voters, parties, and states across the country”, potentially “nullify[ing] the votes of millions and chang[ing] the election result”. The constitution cannot be read to impose such “chaos” on the country.

Although the decision was unanimous, the four female justices criticised their five male colleagues for deciding more than they needed to—and foreclosing other methods of enforcing Section 3. Justice Amy Coney Barrett wrote that the case “does not require us to address the complicated question whether federal legislation is the exclusive vehicle through which Section 3 can be enforced”. For Justices Ketanji Brown Jackson, Elena Kagan and Sonia Sotomayor, the opinion could have started and ended with the proposition that empowering Colorado to remove Mr Trump from the ballot risked “a chaotic state-by-state patchwork, at odds with our nation’s federalism principles”. In their view, the five men were excessively bold, deciding “novel constitutional questions” that rope off future challenges under Section 3.

The majority went further than necessary, the court’s three liberal justices charged, “creat[ing] a special rule for the insurrection disability in Section 3” that does not apply to any other provision of the 14th Amendment. There is “next to no support” for the proposition that Congress must pass a statute to enforce Section 3, the opinion continues. By overreaching, the court in effect “insulate[s] all alleged insurrectionists from future challenges to their holding federal office” and “shuts the door on other potential means of federal enforcement”—in a federal court, say, or via an act of Congress that is, in the eyes of a future Supreme Court majority, disproportionate or incongruent.

These disagreements mean that Trump v Anderson goes down as both a unanimous decision barring Colorado from removing Mr Trump and a 5-4 ruling giving the Supreme Court final say on congressional action disqualifying any oath-breaking insurrectionist from pursuing public office. But for the leading Republican candidate for president, the message is clear: full steam ahead. 

Economics

Germany’s election will usher in new leadership — but might not change its economy

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Production at the VW plant in Emden.

Sina Schuldt | Picture Alliance | Getty Images

The struggling German economy has been a major talking point among critics of Chancellor Olaf Scholz’ government during the latest election campaign — but analysts warn a new leadership might not turn these tides.

As voters prepare to head to the polls, it is now all but certain that Germany will soon have a new chancellor. The Christian Democratic Union’s Friedrich Merz is the firm favorite.

Merz has not shied away from blasting Scholz’s economic policies and from linking them to the lackluster state of Europe’s largest economy. He argues that a government under his leadership would give the economy the boost it needs.

Experts speaking to CNBC were less sure.

“There is a high risk that Germany will get a refurbished economic model after the elections, but not a brand new model that makes the competition jealous,” Carsten Brzeski, global head of macro at ING, told CNBC.

The CDU/CSU economic agenda

The CDU, which on a federal level ties up with regional sister party the Christian Social Union, is running on a “typical economic conservative program,” Brzeski said.

It includes income and corporate tax cuts, fewer subsidies and less bureaucracy, changes to social benefits, deregulation, support for innovation, start-ups and artificial intelligence and boosting investment among other policies, according to CDU/CSU campaigners.

“The weak parts of the positions are that the CDU/CSU is not very precise on how it wants to increase investments in infrastructure, digitalization and education. The intention is there, but the details are not,” Brzeski said, noting that the union appears to be aiming to revive Germany’s economic model without fully overhauling it.

“It is still a reform program which pretends that change can happen without pain,” he said.

Geraldine Dany-Knedlik, head of forecasting at research institute DIW Berlin, noted that the CDU is also looking to reach gross domestic product growth of around 2% again through its fiscal and economic program called “Agenda 2030.”

But reaching such levels of economic expansion in Germany “seems unrealistic,” not just temporarily, but also in the long run, she told CNBC.

Germany’s GDP declined in both 2023 and 2024. Recent quarterly growth readings have also been teetering on the verge of a technical recession, which has so far been narrowly avoided. The German economy shrank by 0.2% in the fourth quarter, compared with the previous three-month stretch, according to the latest reading.

Europe’s largest economy faces pressure in key industries like the auto sector, issues with infrastructure like the country’s rail network and a housebuilding crisis.

Dany-Knedlik also flagged the so-called debt brake, a long-standing fiscal rule that is enshrined in Germany’s constitution, which limits the size of the structural budget deficit and how much debt the government can take on.

Whether or not the clause should be overhauled has been a big part of the fiscal debate ahead of the election. While the CDU ideally does not want to change the debt brake, Merz has said that he may be open to some reform.

“To increase growth prospects substantially without increasing debt also seems rather unlikely,” DIW’s Dany-Knedlik said, adding that, if public investments were to rise within the limits of the debt brake, significant tax increases would be unavoidable.

“Taking into account that a 2 Percent growth target is to be reached within a 4 year legislation period, the Agenda 2030 in combination with conservatives attitude towards the debt break to me reads more of a wish list than a straight forward economic growth program,” she said.

Change in German government will deliver economic success, says CEO of German employers association

Franziska Palmas, senior Europe economist at Capital Economics, sees some benefits to the plans of the CDU-CSU union, saying they would likely “be positive” for the economy, but warning that the resulting boost would be small.

“Tax cuts would support consumer spending and private investment, but weak sentiment means consumers may save a significant share of their additional after-tax income and firms may be reluctant to invest,” she told CNBC.  

Palmas nevertheless pointed out that not everyone would come away a winner from the new policies. Income tax cuts would benefit middle- and higher-income households more than those with a lower income, who would also be affected by potential reductions of social benefits.

Coalition talks ahead

Following the Sunday election, the CDU/CSU will almost certainly be left to find a coalition partner to form a majority government, with the Social Democratic Party or the Green party emerging as the likeliest candidates.

The parties will need to broker a coalition agreement outlining their joint goals, including on the economy — which could prove to be a difficult undertaking, Capital Economics’ Palmas said.

“The CDU and the SPD and Greens have significantly different economic policy positions,” she said, pointing to discrepancies over taxes and regulation. While the CDU/CSU want to reduce both items, the SPD and Greens seek to raise taxes and oppose deregulation in at least some areas, Palmas explained.

The group is nevertheless likely to hold the power in any potential negotiations as it will likely have their choice between partnering with the SPD or Greens.

“Accordingly, we suspect that the coalition agreement will include most of the CDU’s main economic proposals,” she said.

Germany is 'lacking ambition,' investor says

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