Geopolitics

Why The World Needs More Angela Merkel Right Now

The coronavirus pandemic has only exacerbated tensions between Beijing and Washington. It's time that cooler heads prevail, and Germany has just the right person for the job.

Chancellor Merkel in Berlin on April 23
Christian Hacke*

-Analysis-

BERLIN — It's encouraging to see the tireless, selfless commitment of doctors and care workers across the world who are leading the fight against coronavirus. What's disappointing is that world leaders seem unable to do the same.

Particularly worrying is that the United States and China — which have both been hit especially hard by the virus — are continuing to stoke their rivalry throughout the crisis, displaying not only arrogance, but sometimes also xenophobia.

After the initial outbreak of coronavirus in Wuhan, Washington immediately began speculating that it could spell the end for the Chinese dream. Donald Trump insisted on calling it "the Chinese virus' and boasted that he had the crisis under control.

China has responded in kind: Foreign journalists who criticize the regime's handling of the virus are labeled racist and even expelled from the country. Beijing has claimed that the fast spread of the coronavirus in Europe and the United States is the result of western decadence, while celebrating its own containment of the epidemic as proof that its system of government is superior.

The confrontation between Xi Jinping and Donald Trump is stirring up a new "crisis within the crisis." Careful, prudent action is the way to manage an emergency. In the absence of competent leadership, the situation can only get worse. Now the United States is having to face a crisis of leadership at the same time as combating the epidemic. The Chinese regime has managed to avoid this, and may well emerge from the coronavirus even stronger than before.

The United States has two options. It can carry on trying to stop China from gaining power, although this would be almost impossible, as China is fast becoming an equal partner on the world stage. Or it could seek to work together with China so that the two superpowers balance each other out.

The confrontation between Jinping and Trump is stirring up a new "crisis within the crisis."

So far there have been no positive signals of cooperation between Washington and Beijing. The two governments are tangled up like boxers in the ring, and can only be separated if someone else steps in. Otherwise the whole world will suffer.

But who can speak for the rest of the world? Who can put the brakes on this dangerous trend? Only a strong political leader who commands respect from other countries and has experience on the world stage. This person must have have a proven record in times of crisis and represent a country with a solid international reputation. He or she must have a working relationship with both Washington and Beijing, and — perhaps most importantly — have shown strong leadership throughout the coronavirus epidemic. Surely there could be no one better qualified than Angela Merkel.

Xi Jinping and Donald Trump on a Berlin Wall mural, April 28 — Photo: Jan Scheunert/ZUMA

The German chancellor is well respected in Beijing, but her relationship with the U.S. government is not entirely comfortable. Although she has a good reputation there, Trump is obsessed with his own superiority. He is sticking to his "America first" approach, and he makes sure the Germans know it.

Former Chancellor Helmut Kohl wouldn't have been put off by this. He would probably already have spoken to Donald Trump and used his rustic charm to convince the U.S. president that he would gain respect both at home and abroad if he adopted a different approach with China.

Kohl would have shown Trump that he could enhance his own reputation by turning to China for help in this crisis. Because with help from Beijing, the American economy could kick into life again. Kohl would also have been able to exploit Trump's vanity, by emphasizing the president's great responsibility and historic role in the crisis.

Now is the time for Merkel to step up.

Former Chancellor Helmut Schmidt would probably have encouraged more international cooperation throughout the crisis. He would have used his expertise in dealing with authoritarian leaders to appeal to the Chinese government and persuade it to abandon its triumphalist tone towards the United States. And former Foreign Minister Hans-Dietrich Genscher would probably have already returned from a secret mission to Washington and Beijing.

Angela Merkel has shown that she is capable of doing the same. Now is the time for her to step up. As an experienced diplomat, she could take matters into her own hands and encourage Beijing and Washington to hold proper talks. She could also call for the UN, the G7 or the G20 to be put on an emergency footing. It would even be possible to organize a special coronavirus conference, either independently or under the aegis of the UN.

This would be in Merkel's own best interest, and that of the EU, because these two world powers are both putting pressure on Europe. The United States is trying to win the EU over to its side and stir up anti-Chinese sentiment. China is being more subtle in its approach, offering support in the fight against coronavirus to Italy and other European countries, carefully selected to broaden its influence.

An already beleaguered Europe will be put to the test if the rivalry between the United States and China continues to grow. Reducing tension between these two world powers is necessary for Europe's unity and economic stability. That is why a diplomatic initiative would be a welcome step.

In a few weeks' time, Germany will take over the presidency of the European Council. Angela Merkel will therefore have an even greater responsibility to represent European interests, and more authority behind her when she approaches these two governments. The European Council presidency gives her a chance to step into the ring with the EU's backing. Let's hope she takes the opportunity.



*Christian Hacke is a renowned historian and political scientist



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Economy

European Debt? The First Question For Merkel's Successor

Across southern Europe, all eyes are on the German elections, as they hope a change of government might bring about reforms to the EU Stability Pact.

Angela Merkel at a campaign event of CDU party, Stralsund, Sep 2021

Tobias Kaiser, Virginia Kirst, Martina Meister


-Analysis-

BERLIN — Finance Minister Olaf Scholz (SPD) is the front-runner, according to recent polls, to become Germany's next chancellor. Little wonder then that he's attracting attention not just within the country, but from neighbors across Europe who are watching and listening to his every word.

That was certainly the case this past weekend in Brdo, Slovenia, where the minister met with his European counterparts. And of particular interest for those in attendance is where Scholz stands on the issue of debt-rule reform for the eurozone, a subject that is expected to be hotly debated among EU members in the coming months.

France, which holds its own elections early next year, has already made its position clear. "When it comes to the Stability and Growth Pact, we need new rules," said Bruno Le Maire, France's minister of the economy and finance, at the meeting in Slovenia. "We need simpler rules that take the economic reality into account. That is what France will be arguing for in the coming weeks."

The economic reality for eurozone countries is an average national debt of 100% of GDP. Only Luxemburg is currently meeting the two central requirements of the Maastricht Treaty: That national debt must be less than 60% of GDP and the deficit should be no more than 3%. For the moment, these rules have been set aside due to the coronavirus crisis, but next year national leaders must decide how to go forward and whether the rules should be reinstated in 2023.

Europe's north-south divide lives on

The debate looks set to be intense. Fiscally conservative countries, above all Austria and the Netherlands, are against relaxing the rules as they recently made very clear in a joint position paper on the subject. In contrast, southern European countries that are dealing with high levels of national debt believe that now is the moment to relax the rules.

Those governments are calling for countries to be given more freedom over their levels of national debt so that the economy, which is recovering remarkably quickly thanks to coronavirus spending and the European Central Bank's relaxation of its fiscal policy, can continue to grow.

Despite its clear stance on the issue, Paris hasn't yet gone on the offensive.

The rules must be "adapted to fit the new reality," said Spanish Finance Minister Nadia Calviño in Brdo. She says the eurozone needs "new rules that work." Her Belgian counterpart agreed. The national debts in both countries currently stand at over 100% of GDP. The same is true of France, Italy, Portugal, Greece and Cyprus.

Officials there will be keeping a close eye on the German elections — and the subsequent coalition negotiations. Along with France, Germany still sets the tone in the EU, and Berlin's stance on the brewing conflict will depend largely on what the coalition government looks like.

A key question is which party Germany's next finance minister comes from. In their election campaign, the Greens have called for the debt rules to be revised so that in the future they support rather than hinder public investment. The FDP, however, wants to reinstate the Maastricht Treaty rules exactly as they were and ensure they are more strictly enforced than before.

This demand is unlikely to gain traction at the EU level because too many countries would still be breaking the rules for years to come. There is already a consensus that they should be reformed; what is still at stake is how far these reforms should go.

Mario Draghi on stage in Bologna

Prime Minister Mario Draghi at an event in Bologna, Italy — Photo: Brancolini/ROPI/ZUMA

Time for Draghi to step up?

Despite its clear stance on the issue, Paris hasn't yet gone on the offensive. That having been said, starting in January, France will take over the presidency of the EU Council for a period that will coincide with its presidential election campaign. And it's likely that Macron's main rival, right-wing populist Marine Le Pen, will put the reforms front and center, especially since she has long argued against Germany and in favor of more freedom.

Rome is putting its faith in the negotiating skills of Prime Minister Mario Draghi, a former head of the European Central Bank. Draghi is a respected EU finance expert at the debating table and can be of great service to Italy precisely at a moment when Merkel's departure may see Germany represented by a politician with less experience at these kinds of drawn-out summits, where discussions go on long into the night.

The Stability and Growth pact may survive unscathed.

Regardless of how heated the debates turn out to be, the Stability and Growth Pact may well survive the conflict unscathed, as its symbolic value may make revising the agreement itself practically impossible. Instead, the aim will be to rewrite the rules that govern how the Pact should be interpreted: regulations, in other words, about how the deficit and national debt should be calculated.

One possible change would be to allow future borrowing for environmental investments to be discounted. France is not alone in calling for that. European Commissioner for Economy Paolo Gentiloni has also added his voice.

The European Commission is assuming that the debate may drag on for some time. The rules — set aside during the pandemic — are supposed to come into force again at the start of 2023.

The Commission is already preparing for the possibility that they could be reactivated without any reforms. They are investigating how the flexibility that has already been built into the debt laws could be used to ensure that a large swathe of eurozone countries don't automatically find themselves contravening them, representatives explained.

The Commission will present its recommendations for reforms, which will serve as a basis for the countries' negotiations, in December. By that point, the results of the German elections will be known, as well as possibly the coalition negotiations. And we might have a clearer idea of how intense the fight over Europe's debt rules could become — and whether the hopes of the southern countries could become reality.

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