Ideas

German Elections, Why The World Needs Angela Merkel

China, for one, sees the incumbent German Chancellor as the 'mother if not grandmother' of all of Europe. Her likely victory will be good news for her nation, and the planet.

Time for reflection
Dominique Moisi

-OpEd-

PARIS — Henry Kissinger once famously summed up Germany's problems by saying that it was "too big for Europe, too small for the world." It's a good turn of phrase, albeit not entirely accurate. Could the same be said nowadays about the German chancellor herself?

After 12 years in power, Angela Merkel will, in all likelihood, be re-elected on Sept. 24 for a fourth and probably final term. It's a testament to her strength and importance, but it doesn't mean she's "too big for Europe." And if it seems that way, it's only because her successive partners in power, be it in Paris, Rome, Warsaw, Madrid, London, didn't know how to — or simply couldn't — rise to her level.

This observation also applies to the current election campaign in Germany. It's not that there's been too much of Merkel. It's that there hasn't been enough of her opponent Martin Schultz, the Socialist Party candidate.

It's also wrong to consider Merkel "too small for the world." Germany intends to be gauged on its economy and moral leadership, rather than its military might. The country's history has immunized it against the viruses of extreme nationalism and xenophobia more efficiently than any other country.

Germany's strength and good fortune comes from leaders whose messages will also be linked to their names: Konrad Adenauer and reconciliation with the West, Willy Brandt and reconciliation with the East, Helmut Kohl and Germany's unification, Gerhard Schröder and structural economic reforms. Merkel will probably be remembered for her political longevity but also for placing ethical considerations above ideological concerns.

Shutting Greece's access to credit and opening Germany's borders to the flow of refugees are two measures that fit this puritanical and moral vein. You cannot recklessly keep on accumulating debt. There is also a form of redemption in opening yourself up to "Others' in absolute need, especially if by doing so you can also meet the demographic demands of a German economy in need of hands.

For her pragmatism and prudence, and most importantly, her capacity to follow her moral instinct, Merkel will be remembered by her country, and by the entire European Union, as the reassuring face who was in the right country at the right time.

Angela Merkel during an election campaign event in Hamburg — Photo: Omer Messinger/ZUMA

There is, of course, room for criticism regarding Merkel's 12 years worth of leadership decisions: her sometimes excessive caution, her procrastination regarding the Greek crisis and her constant need to "buy time." But let's imagine for a second a Merkel-less Germany and Europe, at a time when a crisis grows inside the EU, when Britain is leaving the bloc and when France isn't exactly in its best political shape.

In terms of international politics, Germany suffers from structural disadvantages. It isn't a member of the UN Security Council or even likely to become one. Only a few years ago, one of France's great ambassadors told me, almost with greed in his eyes, that, "France, of course, supports Germany's candidacy but it's only because we know that it will never enter the Security Council as a permanent member."

Moreover, spending more on military involves considerable effort for Germany, and it will take a while to happen. Germany won't become a replacement for Britain overnight.

And yet, despite being an essentially one-dimensional power, Merkel's Germany still makes its voice heard on the international stage. Berlin was able to speak firmly to Vladimir Putin's Russia. It reinforced its moral stature by using wisdom and standing by its principles when faced with U.S. President Donald Trump's provocations. China sees Merkel not just as the leader of Europe's biggest economy but also as the "mother if not grandmother" of all of Europe.

Germany's strengths and handicaps must be seen in a wider European context. There is a de facto natural partnership between Germany and France, one that seems even more obvious in light of Emmanuel Macron's victory in France and Merkel's probable re-election. This partnership doesn't exist just between the two countries but also between the two leaders, as much in culture as personal style. The new French president is sometimes said to be "overdoing" it, while the German Chancellor is criticized for not doing enough.

Macron's election has come to reinforce Merkel's candidacy. And Merkel's re-election will be an asset to Macron. Germany acts as a form of reassurance as France finally heads towards reforms. France incites Germany to show more boldness and imagination at the European level. A culture of hope and a culture of caution can, if put together, make for an excellent remedy for Europe as it seeks its place in a changing world.

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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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