The debate about post-election Germany has focused mainly on who is going to be the next German chancellor. What I find much more interesting is that the German electorate has launched a new era in European economic policy – a post-reform era.

These elections not only failed to produce a clear-cut winner. They resulted in a genuinely hung parliament, in the sense that the centre-right’s majority in the Bundesrat, the upper chamber, is perfectly balanced by a majority of the left in the Bundestag, the lower chamber. Had the CDU and the liberal FDP won an outright majority, they would have been in a position to implement a moderately ambitious programme of reforms.