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Germany's Mysterious Mrs Merkel
Mrs Merkel’s character is best summed up by what she is not. Unlike other European leaders, she is neither charismatic, nor flashily intellectual, nor domineering. Yet nobody could deny that she is a highly effective politician. Were she to express interest in the job of EU president that will be created if the EU’s Lisbon treaty is ratified this autumn, it would be given to her on a plate.
Above all, Mrs Merkel has stayed popular—more consistently so than any chancellor since Konrad Adenauer. And she has accomplished this in the teeth of Germany’s worst recession since the war. GDP shrank by 7% in the year to the first quarter. Industrial production has fallen by over a fifth. Unemployment has been masked by job subsidies and make-work schemes, but it is likely to climb back above 4m next year. That Mrs Merkel is still favourite to win re-election as chancellor is a tribute to her political skill.
But is she a reformer?
The question is not whether Mrs Merkel will keep power, but whether she is ready to use it. She has an unusual background for a CDU leader: daughter of a Protestant pastor, raised in communist East Germany, she was a physicist before turning to politics. That ought to bode well in a party that is fonder of consensus than of radical change. She seems intellectually to accept the case for greater liberalisation, smaller government and freer markets.
She is cautious by temperament. The opposite of France’s Nicolas Sarkozy, she is more of a methodical scientist than a mercurial revolutionary.
Yet this betrays a dangerous complacency. Even if the economic crisis was not made in Germany, it has changed the world: Germany will suffer unless it responds. The old reliance on manufacturing exports looks broken. Consumers, chary of spending, are hobbling domestic demand. Services, the backbone of all modern economies, are underdeveloped. Germany suffers from deeper weakness too. The demographic outlook is grim, threatening Germany’s public finances. Education, once the envy of the world, is now mediocre—especially when it comes to universities, where the government is only just starting on reform (see article).
Admittedly, many other European countries have even bigger immediate problems than Germany. But the truth is that all of Europe needs reform: to shift away from high taxes, generous and wasteful welfare states, and, most of all, overly regulated and inflexible product and labour markets. If Mrs Merkel’s Germany were to lead the way, it would be not just Europe’s biggest economy but also its intellectual leader
Smarter than Nicolas (let alone Silvio); but not Konrad
Mrs Merkel will go down in history as Germany’s first female leader—no mean feat. But if she wants to measure up to Adenauer or Helmut Kohl, she must persuade Germans of the case for change. And for that she needs to be far bolder.
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