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Angela Merkel's Twenty Days To Change The World

From the G8 summit later this month in Mexico to her own domestic political fortunes, German Chancellor Angela Merkel will have all the world asking if she can lead the charge to save the euro, and help reverse a sinking world economy.

The world is watching (Bundesregierung/Denzel)
The world is watching (Bundesregierung/Denzel)
Torsten Krauel and Robin Alexander

BERLIN – On June 20, the 2012 summer holiday season begins in Berlin. And as residents of the German capital flock to the airport, some may see a government Airbus landing. On board: Chancellor Angela Merkel back from the Mexican luxury beach resort, San José del Cabo, located at the southern tip of Baja California. Merkel will be driven straight to her office.

But she will not be returning from some holiday in Mexico: the G-20 summit of the world's major economies will be held there.

It's the meeting where the preliminary decision about the fate of the euro will be taken. Returning to Berlin on June 20, Merkel will have completed one of her toughest tasks so far as Chancellor, only to face what may be an even tougher one with the EU summit at the end of the month.

"Ten Days That Shook The World," is the title of a famous book about the October Revolution in Russia. If it were up to Merkel, the 20 days between now and the end of the month would be dubbed "the 20 days that calmed the world down."

The tension-fraught countdown begins on Tuesday, June 12. That's when Merkel attends her Christian Democratic Union (CDU) party's "Economy Day", during which she hopes to win over skeptical German business leaders on minimum wage, childcare subsidies, progressive tax reform, quotas for women, transitionning from nuclear energy, and saving the euro.

However confident she is on these issues, she comes empty-handed. She will only be able to deliver on the following afternoon when she meets with party and coalition heads in federal parliament – and saves the euro. Merkel hopes to come to an agreement with the opposition on the European Stability Mechanism (ESM) and the Fiscal Compact, as the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union is more informally known.

Finding a consensus at home

The ESM comes into effect on July 1, and the Chancellor wants to be able to tell her G-20 colleagues that Germany will be implementing it. But to do so, she needs approval from the Social Democratic Party (SPD) and the Greens to obtain a two-thirds majority. The chances of consensus look good.

The SPD and the Greens support the ESM and Fiscal Compact, but they want to append a growth package. Merkel will be presenting one, the details of which her staff has been working on behind the scenes for months.

On the same day, a mediation committee will determine the fate of Merkel's tax relief plans, blocked by the upper house of parliament in May. It's going to be a very long day for the Chancellor.

And no less so on Thursday when the lower house votes on her childcare subsidy plans and Merkel meets with the Minister Presidents of the German states to talk about the transition from nuclear energy. Both issues are top priority for Merkel, but require a consensus, particularly on the nuclear issue.

Merkel also needs to present a united front on energy at the G-20 summit: stability on the energy issue is a cornerstone of Germany's economic power, and the rating agencies are watching closely.

If Merkel makes a breakthrough on Wednesday, both the ESM and the Fiscal Compact could be approved by the lower house on Friday -- if... Otherwise there's still time for another meeting. Saturday? Twelve hours to prepare for the Mexico summit.

And on Sunday? There are elections in two EU countries on that day: both the French and the Greeks are holding parliamentary elections. Just how much political freedom Hollande has to get things done will be decided on the day – and in Greece, whether or not the leftist Syriza party wins will (de facto) decide whether the country stays in the euro or not. Meanwhile, Sunday morning Angela Merkel boards a German Air Force jet to Mexico.

Europe's Prime Minister

Waiting for her there are Barack Obama, François Hollande, China's Hu Jintao, Saudi princes and India's Prime Minister, all eager to get her take on the elections and see what she's bringing, from Europe, to the table.

Satellite connections on the German jet are being given an extra once-over before the flight: the Chancellor lands shortly after midnight European time, and she has to be in the know on everything ranging from the elections to the European soccer championships.

In Merkel's dramatic month of June every step she takes, every word she utters, is going to be weighed. Angela Merkel is nothing short of a "lottery angel" for the world economy. It's up to her if the world's largest economic zone – the EU – crashes, dragging everybody else down with it, or if there's a soft landing.

Obama, Hollande and many others are putting pressure on Merkel to open up the coffers, say yes to Eurobonds – and wave goodbye to her "no quick money" stance. Adding to the enormous pressure: the cover of this week's "Economist" depicting a sinking tanker pleading: "Please can we start the engines now, Mrs Merkel?"

Merkel knows Portugal's banking system, Italy's labor laws, and Greek political parties as proficiently as she knows what's happening in her own country. She thinks and acts like Europe's Prime Minister.

Time is nevertheless starting to close in on her. Al Qaeda is in Syria, prowling around depots of biological and chemical weapons – at Israel's door, as it were. Washington is pressing the alarm button: will the Europeans please get their house in order!

Psychologically, it's all connected: the transition from nuclear, the euro, world politics. Syriza, the Greek leftist party, and Syria are the two unknowns in Merkel's agenda. Holidays for the Chancellor? She's going to have to wait a while.

Read the original article in German

Photo - Bundesregierung/Denzel

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