MERKEL TRIUMPHANT, BUT..............................
SEPTEMBER 23, 2013
MERKEL TRIUMPHANT, BUT WILL SHE LEAD EUROPE?
Just a few hours after celebrating her election to a third term as Germany’s Chancellor by dancing to “Days Like These,” an anthemic song by the German punk band Die Toten Hosen, Angela Merkel was back to her usual self on Monday morning: low-key, deliberate, and schoolmarmish. “Thoroughness goes before speed,” she said in answer to questions about how long it would take her to form a new administration, which will probably include representatives of the center-left Social Democratic Party (SPD), as well as her own party, the center-right Christian Democratic Union. “Germany needs a stable government, and we will fulfill this task.”
Doubtless, she will. Merkel has built her career on providing solid, predictable, and unspectacular leadership. Widely seen in the rest of Europe as the “Iron Lady” who insisted that countries such as Greece, Portugal, and Ireland adopt grinding austerity policies that have resulted in deep recessions and mass unemployment, she is viewed inside Germany as a stolid and incorruptible defender of the national interest—hence her nickname “Mutti,” or “Mom.” With the Christian Democrats and their Bavarian sister party gaining a healthy plurality of the vote in Sunday’s election, she joined Konrad Adenauer and her mentor Helmut Kohl as the third postwar Chancellor to win a third term of office.
From an international perspective, that is mixed news. On the plus side, it is reassuring for the rest of the world to have a moderate, unflappable, and well-respected figure like Merkel running Germany, which is now clearly first among equals in the European Union. (France and Britain, the union’s two other major powers, are both led by unpopular first-term politicians.) On the other hand, Merkel’s leadership during the euro crisis has been less than inspiring. Mindful of German voters’ concerns about rescuing southern Europeans that they view as shiftless, she has adopted a policy of one step forward, one step back—reluctantly agreeing to bailouts of countries like Greece and Portugal, but refusing to rush through measures that would help the E.U. get ahead of the problem, such as introducing Keynesian stimulus policies in well-off countries (Germany included) and constructing a workable banking union. Without the emergency intervention of the European Central Bank, which is led by an Italian, Mario Draghi, the euro zone might well have broken apart.
The hope in other European capitals is that Merkel, now that she has successfully negotiated the election, will be more proactive in seeking to bring about an end to the crisis. But if that’s going to happen, she didn’t give any indication of it Monday. “Our European policy course, at least on the part of the [Christian Democratic] Union, will not change,” she said. Still, the markets will be watching the formation of a new government and, in particular, to whether Merkel retains Wolfgang Schaeuble, a conservative opponent of all things Keynesian, as her finance minister.
Having lost the support of the Free Democratic Party, which didn’t hit the five per cent of the vote threshold to get seats in the Bundestag, Merkel needs to persuade the SPD—or even the Greens—to join a “Grand Coalition.” Either of the leftist parties could demand the finance ministry as the price of joining a coalition. (The SPD’s leader, Peer Steinbrück, who was the finance minister under Merkel from 2005 to 2009, has said he won’t serve in such a government again.) If Merkel showed a readiness to replace Schaeuble, it would signal she is willing to be more flexible on economic matters, which would be all to the good.
Although the euro crisis is currently contained, it hasn’t gone away. Much has been made of the fact that, for the first time since 2011, the euro zone’s economy expanded slightly in the second quarter of this year. But outside of Germany and France, many European countries are still in a recession. Some are stuck in a depression. In Greece, the unemployment rate is 27.5 per cent; in Spain, it is 26.3 per cent; in Portugal, it is 16.4 per cent; in Italy, it is twelve per cent.
Although the bond markets are calm, that could change quickly. During the coming months, the E.U. is due to negotiate new financing deals with two of the bailed-out countries—Ireland and Portugal—and it might well have to provide more relief to Greece, which is still a basket case. Meanwhile, Spain is threatening to split apart, and Italy is facing yet more political turmoil, with the finance minister of the coalition government threatening to resign if his colleagues go ahead and flout E.U.-imposed targets for the budget deficit. All this is happening while the E.U. is supposed to be stepping up preparations for a banking union and more political integration.
Merkel, in typical fashion, has expressed support for more vigorous action to end the crisis, while holding back on pressing specific measures. For example, she supports a banking union, which would see big financial firms regulated on an E.U.-wide basis, but she is wary of setting up a system in which German taxpayers would be obliged to bail out stricken banks in other countries. As a price of closer economic integration, her government has suggested that all states in the euro zone be forced to sign “competitiveness contracts,” which oblige them to reform their labor markets and welfare systems as Germany did ten years ago.
France and other countries regard such proposals as infringements on their national sovereignty, which, of course, they are. But with xenophobic feelings rising in Germany—in Sunday’s election, a new anti-euro party, Alternative for Germany, won almost five per cent of the vote—Merkel will be wary of making any concessions that alienate the burghers who reelected her. Which, once again, raises the issue that Timothy Garton Ash, the British historian, referred to as“The New German Question” in a recent issue of The New York Review of Books: “Can Europe’s most powerful country lead the way in building both a sustainable, internationally competitive eurozone and a strong, internationally credible European Union?”
Since the beginning of the euro crisis, I have been a bit more sanguine about Europe’s prospects than many American commentators. For as long as I can remember—and that goes back to 1973, when the United Kingdom, Denmark, and Ireland joined the dear old European Economic Community—the union, community, or whatever you want to call it, has been in some sort of crisis. Somehow, though, it stumbles along and survives. And that’s no accident; despite the rise of Euroskepticism in some countries, Germany included, there remains a strong commitment to making Europe work.
Today, however, the challenges are greater than ever. First, there is the lingering economic depression on the periphery of the euro zone. Then there is the question of how to manage a club that has grown very rapidly, and which now extends from the Atlantic to the Russian border. The euro zone encompasses seventeen nations. The E.U. includes those seventeen and another ten. And more countries, such as Turkey, Serbia, and Macedonia, are banging on the door to get in.
In making such a diverse community cohere and prosper, leadership and vision are sorely needed. Like George H. W. Bush, Merkel, the Prussian prelate’s daughter, has always struggled with “the vision thing.” This is a woman who has just campaigned on the slogans “No experiments” and “Solid finance”: asking her to turn into Goethe, or even Willy Brandt, is too much. But she’s shown she can lead. From persuading a reluctant Bundestag to support the bailouts of Greece and other countries to announcing, in the wake of the Fukushima accident, that Germany would decommission all of its nuclear power stations, she has displayed a keen tactical sense, an ability to disarm her opponents, and, where necessary, a willingness to surprise.
Until now, Merkel has displayed her political talents largely on the domestic level. Now, it’s time for her to apply them on the international stage, and also to reaffirm to her countrymen and countrywomen why ensuring that the E.U. survives and prospers is very much in their self-interest. Germany already has a “Mutti.” Europe needs one, too.
Photograph by Julian Stratenschulte/picture-alliance/dpa/AP Images. new europe
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