GIS Dossier: Angela Merkel

German Chancellor Angela Merkel
German Chancellor Angela Merkel, who will step down in 2021, has had a profound impact on her country and on Europe (source: dpa)

GIS Dossiers aim to give our subscribers a quick overview of key topics, regions or conflicts based on a selection of our experts’ reports since 2011. This survey examines the role German Chancellor Angela Merkel has played in shaping today’s geopolitical landscape in Germany, Europe and around the world.

Some consider her a savvy tactician who knows when to adopt a popular position. Others see her as a leader with little vision, only too willing to abandon principled politics to ensure she remains in power. Whatever one’s view of Chancellor Angela Merkel, however, she has certainly emerged as the face of German politics and the dominant leader in Europe.

Her impact on European and global geopolitics has been profound, and her announcement in October that she would be stepping down as chancellor marked the end of an era.

In this Dossier, we review our experts’ analyses of “Mutti’s” policies, which though having maintained stability, may also have put her country, and Europe, on the wrong track.

Opportunistic leader

One of the hallmarks of Chancellor Merkel’s tenure is her tendency to make decisions based on short-term political gain. GIS experts have lamented this proclivity for years. In a January 2012 report on Germany’s decision to phase out its nuclear power industry, GIS expert Dr. Frank Umbach wrote that Ms. Merkel “appeared to be driven primarily by electoral considerations and coalition tactics,” since the move was popular with the public, but would lead to both higher electricity prices as well as more carbon emissions.

In February of that same year, GIS expert Dr. Kim Holmes wrote how Chancellor Merkel played a key role in the creation of the European Stability Mechanism to help deal with sovereign debt crises. The move, he said, was just a “confidence game” that was eroding Europe’s democratic institutions. Ms. Merkel’s goal, he wrote, was merely to “avoid the appearance of the eurozone falling apart.”

It is difficult to assess Ms. Merkel’s strategy or vision, as it seems she adapts these to the issues of the moment

In a 2013 report on the opportunities and challenges facing Europe, GIS founder Prince Michael of Liechtenstein put it bluntly:

It is very difficult to make an assessment of Ms. Merkel’s strategy or vision as it seems she adapts these to the issues of the moment. Obviously, her tactics are twofold: On the one side, she likes to let a situation unfold until it appears there is only one possible outcome. This one solution will then be forced on the democratic institutions and the people. The other tactic is to eliminate the opposition by including their main issues in her program.

Yet it is precisely strategy and vision which are required in today’s geopolitical environment. Unfortunately, wrote Prince Michael in June of 2017, statesmanship is in short supply. Western leaders, like Ms. Merkel, are fond of making grandiose statements that are meant to play well at home but have little bearing on the problems at hand.

A weaker Europe

Under Ms. Merkel, Germany took a leading role in European policymaking. She led the charge for keeping financially troubled eurozone economies in the common currency, suggesting that the alternative was far worse: “if the euro fails, Europe fails,” was her famous assessment of the issue. So far, she has achieved her goal, but at the cost of huge debts and continued profligacy. Her remark was a clear example of the “misguided impulse to equate institutions with Europe,” wrote Prince Michael in a report setting out scenarios for how to get Europe back on track.

Balkans initiative

In August 2014, GIS expert Prof. Dr. Blerim Reka wrote how Ms. Merkel was taking initiative over the Balkans’ EU membership. She began a series of annual meetings between the EU and Western Balkans aimed at putting the region back on the bloc’s agenda. It was a “wake-up call” to the EU, he argued. “Chancellor Merkel … understands that the EU enlargement status quo in the Western Balkans can no longer continue. … The prolonged wait to join damages the European Union’s credibility.” Keeping the Western Balkans on track toward EU membership would help stave off instability in the region, which could quickly lead to instability throughout Europe. However, she has made clear that these countries cannot enter the EU with unresolved border conflicts.


Her handling of the migrant crisis marked a significant setback for the EU. Declaring “Wir schaffen das,” or “We will manage,” her initial policy of open borders contributed to a flood of refugees pouring into Europe, prompting several other countries, like Hungary and Austria, to temporarily close their own borders. Eventually, Ms. Merkel had to reverse her decision, but the damage was done, both to her political standing at home and throughout Europe. “Chancellor Angela Merkel’s image as a crisis manager has suffered considerably,” GIS expert Dr. Michael Wohlgemuth wrote.

Her solution was to make a deal with Turkey, essentially promising more financial assistance in return for Ankara keeping refugees from crossing into Europe. She also visited Egypt and voiced support for the government there, in an effort to shore up stability in North Africa.

The migrant crisis was a big contributor to Brexit and could still “determine Europe’s destiny,” as Ms. Merkel herself has said. Though the flow has slowed dramatically since 2015, migration is still a huge issue, fueling anti-immigrant sentiment and influencing policy across the continent.

German Chancellor Angela Merkel and French President Emmanuel Macron
The partnership between German Chancellor Angela Merkel (L) and French President Emmanuel Macron has been chummy – and is pulling Europe down a path of more centralization (source: dpa)

The arrival on the stage of French President Emmanuel Macron bolstered Chancellor Merkel’s position as leader of Europe. In return for his backing, Ms. Merkel, who had previously insisted on principles of national and local responsibility, opened up to more centralization, supporting, for example, the creation of a European Monetary Fund. Prince Michael argued that centralization and debt-sharing within the EU would “weaken Europe’s economy in the long term and have all the ingredients necessary to break the EU’s already fragile cohesion.”

By April 2018, Prince Michael was pointing out that the new French-German axis was heading toward isolation. Its insistence on centralization and modern liberalism (rather than classical liberalism) was alienating other members of the EU, while their foreign policies were resulting in strained relations with the U.S. and Russia.

For reasons like this, Dr. Wohlgemuth warned against heeding claims that Chancellor Merkel was the sole remaining leader of Europe, or even the “leader of the free world,” calling them “an overestimation both of Ms. Merkel’s style and Germany’s weight in European and global politics.” He explained that Germany is often outvoted in the EU, and that it will become less, not more powerful with the exit of the United Kingdom.

Brexit

Brexit threw a wrench into Ms. Merkel’s hopes for keeping Europe together. When British Prime Minister David Cameron announced that the UK would hold an in-or-out referendum, GIS expert Michael Maclay called her reaction “emollient.” She would be willing to work with Mr. Cameron toward EU reform. After all, German and British ideas of European federalism were similar. Mr. Maclay also argued that Germany needs Britain in Europe to make the EU economy work.

Dr. Wohlgemuth agreed that without the UK, Germany would lose out. “Its dwindling band of allies … that favor open markets, free trade and deregulation would lose their veto power under qualified majority voting.” As the Brexit vote loomed, GIS expert Professor Enrico Colombatto wrote that Ms. Merkel was also prepared to consider the British viewpoint when it came to immigration reform.

The German government has started a fight that Europe does not need

However, once the UK voted to leave the EU, Ms. Merkel’s stance changed dramatically. Germans are principle-oriented, Dr. Wohlgemuth explained, and now that salvaging Britain’s EU membership was out the window, she would have to cater to her electorate’s expectations to be tough. Professor Colombatto even went so far as to explore the possibility of a “Brexit war” Between Germany and the UK. “The German government has started a fight that Europe does not need and that many other EU members will not support much longer,” he concluded.

Greek crisis

The Greek sovereign debt crisis forced Chancellor Merkel to walk a tightrope between her electorate’s expectations and her own fears about the future of the EU. German taxpayers wanted Ms. Merkel to refrain from bailing out Greece with their money and push for fiscal responsibility. The chancellor, on the other hand, also wanted to keep Greece in the eurozone.

In a June 2012 report on the huge challenges faced by the Greek government at the time, GIS expert Costas Iordanidis noted that Chancellor Merkel was sticking to her guns and insisting that Greece heed the terms of its bailout package. As elections in Germany loomed, Chancellor Merkel pressed the issue again, for fear of appearing willing to finance Greece. She opposed a haircut on the loans Athens received from other EU governments and a 2-year extension of the bailout.

Initially, Greece’s third bailout package was rejected in a 2015 referendum. Professor Colombatto wrote at the time that technically, further EU financing should have been unavailable, leading to a Greek exit of the eurozone. Of course, that didn’t happen, partly because Ms. Merkel, who was not facing a national election that year, was willing to compromise. “[I]t is now manifest that all decisions are taken in Berlin,” he said.

Making enemies

Ms. Merkel’s decision to cater to her electorate and insist that profligate EU governments implement fiscally responsible policies, rather than take up the cause of “solidarity” and bail them out with German taxpayer money, made her plenty of enemies around the continent. Mr. Iordanidis pointed out that Chancellor Merkel was “not particularly liked” in Greece, where an “unprecedented anti-German attitude” prevailed over the austerity drive. He said that Alexis Tsipras – now prime minister of Greece but at the time still only the leader of the opposition Syriza party – was “waging an anti-Merkel campaign in Greece and on a European level.”

Protesters in Athens hold an anti-Merkel banner
Chancellor Merkel’s insistence on austerity for Greece made her no friends there. Above, protesters at a 2014 march in Athens carry a banner that says “Merkel out” (source: dpa)

Beppe Grillo, leader of the Five Star Movement (M5S) in Italy, “made it clear that he is not willing to follow what he regards as the ‘orders’ of German Chancellor Angela Merkel,” wrote Professor Colombatto. Mr. Grillo was pushing a policy at the time to return Italy to the lira currency. Even Paris, Berlin’s closest partner in the EU, saw the insistence on austerity and market-led competitiveness as “an abuse of newly-gained German domination in Europe.”

Ukraine

Another foreign policy area where Angela Merkel’s Germany became the proxy for Europe – and even for the West – was in Ukraine. In March 2014, GIS expert Professor Stefan Hedlund wrote that Germany was key to talks with Russia, since it is Russia’s biggest trading partner in the EU. Moreover, Angela Merkel speaks Russian and “appears to be the only Western leader to have a relationship of mutual respect with the Kremlin,” he said. Washington got on board quickly, with British Prime Minister Cameron “missing in action” on Ukraine, wrote GIS expert Professor Mikkel Vedby Rasmussen. Ms. Merkel would become “the West’s primary interlocutor with President Putin.”

As Germany took up this leadership role, Chancellor Merkel realized that “real political deterrence to dissuade Moscow from destabilizing Ukraine,” was required. However, she initially was hesitant to impose sanctions on Russia because the German economy would take a hit. The reluctance evaporated quickly. By April, Ms. Merkel was accusing President Putin of “living in another world” and resorting to “the law of the jungle.”

Chancellor Merkel’s peace initiative failed to deliver.

President Putin, for his part, increasingly saw himself as the savior of Russia’s pride. The two leaders drifted farther apart. By August, Professor Hedlund wrote, “Ms. Merkel claims to have called Mr. Putin more than 30 times, ending with an exasperated call for him to contact her if he has anything to say.”

Chancellor Merkel’s peace initiative had failed to deliver. Despite her “valiant efforts to reengage with Russia” and to seek common ground for compromise, the lack of progress “reflects just how disastrous previous policy on Russia and Ukraine had been.” Thereafter, there was little Ms. Merkel could do except insist on keeping the sanctions until Russia ceased support for the rebels in Ukraine and pledge German companies would invest in the country once the right conditions could be put in place.

Economic challenges

Though she demanded belt-tightening from her European allies, the economy Ms. Merkel tended back home was no paragon of fiscal responsibility. In 2012, several German states were racking up debt that in combination with the overall federal debt made them “look like some Mediterranean European countries … longing to be bailed out by German taxpayers,” wrote Dr. Wohlgemuth.

In 2014, he dubbed Germany the “not-so-fit man of Europe.” Though the country miraculously emerged as a “wunderkind” from the 2008 financial crisis, Chancellor Merkel’s new CDU-SPD coalition had weakened the economy by rolling back reforms that were implemented by her predecessor. Even the government admitted that its introduction of a minimum wage would increase labor costs by 10 billion euros, the expert pointed out. New pension benefits would cost the budget some 200 billion euros through 2030.

German exports, 2013-2018
Other countries have criticized Germany’s strong export growth and the accompanying trade surplus, saying it is not buying enough from its neighbors (source: macpixxel for GIS)

In 2018, after German exports declined for the first time in eight years, Professor Colombatto pondered why countries criticize Germany for its trade surplus. The drop, he said, could mean trouble for the rest of the EU, “either because German companies will devote more attention to the domestic market and outcompete foreign rivals, or because it signals tensions in world trade, to which many EU countries are vulnerable.”

Energiewende

One of Chancellor Merkel’s most important policy decisions was to introduce Germany’s “Energiewende” or “energy transition,” by which she decided to gradually shut down the country’s entire nuclear power industry after the Fukushima disaster in 2011. This power supply, as well as its coal-based production, was due to be replaced by renewable energy sources. But while the goal may be commendable, its implementation has been widely criticized by GIS experts. In 2013, Dr. Wohlgemuth called the policy a “ticking time bomb”:

The massive fiscal support for renewable energy and the slow development of intelligent grids increases the risk of blackouts and higher energy bills for households and industry. It also perversely leads to more burning of coal and a breakdown of the carbon emissions system.

Dr. Umbach wrote in March 2014 that Germans were paying a steep price for the policy and that it would cost growth, jobs and living standards. He also pointed out that it was a unilateral decision, not consulted with any of Germany’s energy partners, on whom it would have an outsized effect. This was especially true for Germany’s support of the Nord Stream 2 project, which would help it replace the lost nuclear production but would also significantly weaken the geopolitical positions of its allies.

Domestic politics

Chancellor Merkel’s governments tend to lean toward the center, even the center-left when she deems the politics require it. This has frequently been the case when she led a “grand coalition” government with her Christian Democratic Union (CDU) and the Social Democratic Party (SPD). In 2013, Dr. Wohlgemuth rightly predicted she would form such a coalition after her party’s previous partner, the liberal Free Democratic Party (FDP), suffered a devastating loss in that year’s election and did not even cross the threshold of support to make it into parliament.

Both the SPD and the Greens regarded Ms. Merkel as a ‘black widow’

As he pointed out, it was a dangerous decision for the SPD, since the previous grand coalition government, from 2005 to 2009, led to a historic defeat in the next elections. In fact, both the SPD and the Greens regarded Ms. Merkel as a “black widow”: they believed that forming a government with her would lead to a huge loss of popularity. As the SPD would later find out, that perception was right on the money.

The period between the 2013 and 2017 elections saw the migrant crisis erupt in Europe, and with it, the rise of the anti-immigrant Alternative for Germany party, or AfD. Chancellor Merkel’s policy of welcoming millions of refugees en masse into Germany sent shock waves through the electorate. In 2016, the AfD made big gains in three German states. But while the refugee crisis played a role in the result, noted Prince Michael, “the main problem many Germans have with refugees is not xenophobia, but the fact that Chancellor Merkel appears to be welcoming them without any plan or provision for the future.”

Moreover, instead of addressing the concerns voters had about immigrants, “the mainstream parties and Ms. Merkel rushed to marginalize the [AfD] by branding it – surprise, surprise – as populist, nationalist and right-wing.”

Nevertheless, by 2017 it was clear that Ms. Merkel would win another term as chancellor. Though the strong economy played to her advantage, “a deeper reason for Ms. Merkel’s enduring popularity is her political flexibility,” Dr. Wohlgemuth explained. “One may deride it as values-free opportunism or praise her sensitivity to changing needs and opinions. Either way, she has performed very well as a gifted tactician.”

SPD leader Olaf Scholz (L), Chancellor Angela Merkel and Christian Social Union leader Horst Seehofer
SPD acting chairman Olaf Scholz (L), Chancellor Merkel (C) and Christian Social Union leader Horst Seehofer signed a coalition agreement that undermines their parties’ core values (source: dpa)

The elections were a harsh blow to Germany’s mainstream parties, with both Chancellor Merkel’s CDU and the SPD losing large swathes of their electorate to smaller parties on the right and left. Both, explained Prince Michael, had abandoned principles in favor of expediency. “The Christian Democrats have abandoned Christians, and the Social Democrats have betrayed working people, both blue-collar and white-collar.”

More of the same was to be expected, then, when the two parties formed a coalition again.

“If this coalition comes to life, we cannot expect that any of Germany’s most urgent problems will be addressed, because its major players are convinced that they have been doing a wonderful job,” he argued in January 2018. The only way for the coalition to stake out a more principled line would be for it to be led by someone other than Ms. Merkel, he presciently noted.

So, what will be Ms. Merkel’s legacy in German politics? “Her distinct lack of vision or ideology makes it hard to be sure that she even thinks in those terms,” wrote Dr. Wohlgemuth. “Ms. Merkel may want to be remembered as the woman cunning enough to outlive, and outperform, her political rivals.”

Dying center

One clear legacy of Ms. Merkel’s is the weakening of Germany’s political center. In 2016, GIS expert Dr. Uwe Nerlich pointed out that the trend was taking place not because of the rise of extremist parties, but due to an erosion in the cohesion and steadiness of traditional parties. “The blurring of ideological divides that has been the hallmark of Chancellor Angela Merkel’s strategy may have weakened the SPD,” he wrote, but in state and local elections, the CDU was losing out too.

The blurring of ideological divides has been the hallmark of Chancellor Angela Merkel’s strategy

In blurring those lines, Angela Merkel had compromised the CDU’s core values, Prince Michael explained in 2018. She had made her government’s policies more social-democratic than her own voters would have wanted, only to “cling to power.” It is a wonder that she did not heed the message sent by voters in the 2017 elections in Saarland, Schleswig-Holstein and North Rhine-Westphalia. In all three states, her CDU had found success by sticking to tried-and-true Christian Democratic principles, argued Prince Michael.

But Ms. Merkel was not about to change her ways, leading to the slow death of Germany’s political center. Though the SPD had been the biggest loser in terms of public support, the CDU was not far behind, wrote Dr. Wohlgemuth. Its older, loyal supporters were dying off, and younger conservatives scattered in several directions – to local conservative parties, the AfD, or even to the Greens, which have marketed themselves as a centrist-modernist party.

The upshot was a loss of authority for Ms. Merkel, which Dr. Wohlgemuth predicted could result in “an unprecedented show of no-confidence when she seeks reelection as party leader this December.” The chancellor saw the same writing on the wall. Just a few days later, she announced she would step down as CDU’s leader and would not seek reelection as chancellor in 2021.

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