eyes on the U.S.

Democracy Strikes Back: A French View On America After Bin Laden

Opinion: The killing of Osama bin Laden marks a unique melding of American hard and soft power, and a boost (with legs) for President Obama

Obama's gets a boost (expert infantry)
Alexenia Dimitrova

PARIS - The death of Osama bin Laden allows the United States to redefine crucial relationships: with itself, and with the rest of the world. But it might also represent a turning point for the Arab-Islamic world.

"Justice has been done." This succinct yet powerful statement was the best response Barack "Hussein" Obama could give to his detractors -- many of whom went as far as doubting he was even born in America -- and to opponents who questioned his determination to forcefully combat all of America's enemies. Divided as the Americans may be, they cannot but feel proud, moved and united behind their commander-in-chief in this beginning of May 2011.

This wasn't a case of America showing off its superior technology; it was neither drones nor missiles that ended the hunt for bin Laden. It was the audacity, courage and determination of its soldiers that made the difference in "avenging" the innocent victims of 9/11. The 2012 elections are only 18 months away. And though "a week is an eternity in politics," as the former British Prime Minister of Britain Harold Macmillan said, President Obama's chances of reelection are certainly strengthened by this event. His chances will be even stronger if he is able to announce that the United States, having "accomplished its mission," is ready to leave Afghanistan, which is consuming a disproportionate chunk of its efforts and resources.

America might have entered a relative phase of decline, and its staggering debt places the nation in an undoubtedly uncomfortable situation of dependence on China. But it nonetheless still remains the only great "multi-dimensional" power. Neither China, nor India, nor Russia, and even less so the European Union, have the capacity or the will to undertake an operation like the one that led to the death of Osama bin Laden. "Democracy Strikes Back!" is how Hollywood might describe what took place in Pakistan.

"Hard power," the power to compel, is indispensable, and "soft power," the power to convince, is not sufficient by itself. This is an essential lesson for Europe, but does it come too late?

Lawrence Wright wrote a few years back that while bin Laden had been marginalized, "inside the chrysalis of myth that he had spun about himself " he had managed to become the representative of all Muslims who had been persecuted or humiliated.

In what has been perhaps prematurely labeled the "Arab Spring," how will the Muslim world react to bin Laden's death? Al-Qaeda's influence was cut short by Arab revolutions, seemingly accelerating the coming of a post-Islamist world. In Egypt, Tunisia and elsewhere, it is not Western democracies that are prevailing, but, one hopes, democratic ideals themselves: ideals that fight fundamentalists in full force.

There have been very few American flag burnings during the Arab revolutions in these past few months. How many will there be after the brutal death of bin Laden? What emotions will it stir in the Arab and Muslim world? With the hope for a reconciled world upon us, will al-Qaeda and its deceased leader be seen as a barbaric anachronism? Or will a sense of humiliation prevail, and lead to anti-Western words and deeds?

Nothing has been settled for sure -- neither the fight against al-Qaeda and terrorism, nor regional stability in a Middle East expanded to include Pakistan and Afghanistan. But on a symbolic level, since yesterday there is a little more of Obama in America and a little more of America in the world.

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Economy

Merkel's Legacy: The Rise And Stall Of The German Economy

How have 16 years of Chancellor Angela Merkel changed Germany? The Chancellor accompanied the country's rise to near economic superpower status — and then progress stalled. On technology and beyond, Germany needs real reforms under Merkel's successor.

Chancellor Angela Merkel looks at the presentation of the current 2 Euro commemorative coin ''Brandenburg''

Daniel Eckert

BERLIN — Germans are doing better than ever. By many standards, the economy broke records during the reign of outgoing Chancellor Angela Merkel: private households' financial assets have climbed to a peak; the number of jobs recorded a historic high before the pandemic hit at the beginning of 2020; the GDP — the sum of all goods and services produced in a period — also reached an all-time high.

And still, while the economic balance sheet of Merkel's 16 years is outstanding if taken at face value, on closer inspection one thing catches the eye: against the backdrop of globalization, Europe's largest economy no longer has the clout it had at the beginning of the century. Germany has fallen behind in key sectors that will shape the future of the world, and even the competitiveness of its manufacturing industries shows unmistakable signs of fatigue.

In 2004, a year before Merkel was first elected Chancellor, the British magazine The Economist branded Germany the "sick man of Europe." Ironically, the previous government, a coalition of center-left and green parties, had already laid the foundations for recovery with some reforms. Facing the threat of high unemployment, unions had held back on wage demands.

"Up until the Covid-19 crisis, Germany had achieved strong economic growth with both high and low unemployment," says Michael Holstein, chief economist at DZ Bank. However, it never made important decisions for its future.

Another economist, Jens Südekum of Heinrich Heine University in Düsseldorf, offers a different perspective: "Angela Merkel profited greatly from the preparatory work of her predecessor. This is particularly true regarding the extreme wage restraint practiced in Germany in the early 2000s."

Above all, Germany was helped in the first half of the Merkel era by global economic upheaval. Between the turn of the millennium and the 2011-2012 debt crisis, emerging countries, led by China, experienced unprecedented growth. With many German companies specializing in manufacturing industrial machines and systems, the rise of rapidly industrializing countries was a boon for the country's economy.

Germany dismissed Google as an over-hyped tech company.

Digital competitiveness, on the other hand, was not a big problem in 2005 when Merkel became chancellor. Google went public the year before, but was dismissed as an over-hyped tech company in Germany. Apple's iPhone was not due to hit the market until 2007, then quickly achieved cult status and ushered in a new phase of the global economy.

Germany struggled with the digital economy, partly because of the slow expansion of internet infrastructure in the country. Regulation, lengthy start-up processes and in some cases high taxation contributed to how the former economic wonderland became marginalized in some of the most innovative sectors of the 21st century.

Volkswagen's press plant in Zwickau, Germany — Photo: Jan Woitas/dpa/ZUMA

"When it comes to digitization today, Germany has a lot of catching up to do with the relevant infrastructure, such as the expansion of fiber optics, but also with digital administration," says Stefan Kooths, Director of the Economic and Growth Research Center at the Kiel Institute for the World Economy (IfW Kiel).

For a long time now, the country has made no adjustments to its pension system to ward off the imminent demographic problems caused by an increasingly aging population. "The social security system is not future-proof," says Kooths. The most recent changes have come at the expense of future generations and taxpayers, the economist says.

Low euro exchange rates favored German exports

Nevertheless, things seemed to go well for the German economy at the start of the Merkel era. In part, this can be explained by the economic downturn caused by the euro debt crisis of 2011-2012. Unlike in the previous decade, the low euro exchange rate favored German exports and made money flow into German coffers. And since then-European Central Bank president Mario Draghi's decision to save the euro "whatever it takes" in 2012, this money has become cheaper and cheaper.

In the long run, these factors inflated the prices of real estate and other sectors but failed to contribute to the future viability of the country. "With the financial crisis and the national debt crisis that followed, economic policy got into crisis mode, and it never emerged from it again," says DZ chief economist Holstein. Policy, he explains, was geared towards countering crises and maintaining the status quo. "The goal of remaining competitive fell to the background, as did issues concerning the future."

In the traditional field of manufacturing, the situation deteriorated significantly. The Institut der Deutschen Wirtschaft (IW), which regularly measures and compares the competitiveness of industries in different countries, recently concluded that German companies have lost many of the advantages they had gained. The high level of productivity, which used to be one of the country's strengths, faltered in the years before the pandemic.

Kooths, of IfW Kiel, points out that private investment in the German economy has declined in recent years, while the "government quota" in the economy, which describes the amount of government expenditure against the GDP, grew significantly during Merkel's tenure, from 43.5% in 2005 to 46.5% in 2019. Kooths concludes that: "Overall, the state's influence on economic activity has increased significantly."

Another very crucial aspect of competitiveness, at least from the point of view of skilled workers and companies, has been neglected by German politics for years: taxes and social contributions. The country has among the highest taxes on income in Europe, and corporate taxes are also hardly as high as in Germany anywhere in the industrialized world. "In the long run, high tax rates always come at the expense of economic dynamism and can even prevent new companies from being set up," warns Kooths.

Startups can renew an economy and lay the foundation for future prosperity. Between the year 2000 and the Covid-19 crisis, fewer and fewer new companies were created every year. Economists from left to right are unanimous: Angela Merkel is leaving behind a country with considerable need for reform.

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