The OECD has slashed its forecast for global growth. A new refugee crisis is taking shape on Europe’s south-eastern borders because of fighting in the Syrian province of Idlib. At an acrimonious summit two weeks ago, EU leaders failed to settle their 2021-27 budget.
Wherever you look, darkening clouds are on Europe’s horizon and vital German interests are at stake. Yet leadership from Berlin is lacking because the domestic political scene is in deadlock. Nothing will change until Chancellor Angela Merkel steps down. For the sake of her country and the EU, she needs to change her plans and go well before October 2021, the latest possible date for the next Bundestag elections.
Unlike many democracies, the Federal Republic does not let go easily of its heads of government. In 70 years, there have been only eight chancellors. Ms Merkel, in power since November 2005, has held office for a fifth of that time. For all her undoubted achievements, however, her formula has lost its magic. The longer she holds on, the more questionable her legacy will be.
She does not, of course, bear exclusive responsibility for the problems that are piling up. The erosion of the western-led liberal world order, the fraying of the US-European alliance and the EU’s inability to get a grip on its economic and foreign policy challenges have roots in a multitude of factors, many of them entirely separate from Ms Merkel’s policies and style of leadership.
Furthermore, Germany is a model of prosperity and stability next to other European countries. Think of Italy, its mainstream political classes discredited and its economy stagnant for two decades; or Spain, paralysed by Catalan independence demands; or Belgium, unable to form a government since its May 2019 elections; or the UK, lurching since Brexit into a rightwing populism that some compare to Poland under the Law and Justice party.
For many of Germany’s difficulties, though, Ms Merkel must take her share of the blame. Her preference for “grand coalitions” between her Christian Democratic Union and the Social Democrats — three out of four governments since 2005 — has fragmented and polarised the political landscape in ways unseen since 1949. A hard-right party, Alternative for Germany, not only has Bundestag seats for the first time in the postwar era, but is the main opposition. The AfD spits hatred at political elites, immigrants and Muslims, making it the party of protest par excellence in former communist eastern Germany.
The AfD’s troublemaking is tearing apart the CDU. Conservatives such as Friedrich Merz, an acerbic critic of Ms Merkel, want to neutralise the AfD by taking a leaf from the book of Sebastian Kurz, Austria’s chancellor, and moving sharply to the right on matters of culture and identity. But this would make it difficult for the CDU to form a ruling coalition with the liberal-minded Greens, a combination untried at national level but widely seen as one way out of Germany’s stalemate.
On February 23 the CDU scraped 11 per cent in Hamburg’s state elections, the party’s worst performance in a regional vote since 1951. The terrible result owed much to the mess that Ms Merkel has made of handing over power. Annegret Kramp-Karrenbauer, her handpicked successor as CDU leader, was so out of her depth that she resigned after just 14 months in the job.
In the CDU leadership contest to be held on April 25, the frontrunner is Armin Laschet, who is state premier of North Rhine-Westphalia and Ms Merkel’s preferred choice. His support for Bashar al-Assad as a guarantor of stability in Syria, and for coal-fired power plants in Germany, inspire confidence neither in his foreign policy touch nor in his understanding of why Germans want swift action on climate change.
Ms Merkel’s economic legacy is likewise mixed. Germany is the European economy’s anchor, but quarterly growth since mid-2018 has averaged a feeble 0.1 per cent. Her governments have taken no measures comparable in scope to the labour market and welfare reforms of Gerhard Schröder, her predecessor. Despite large fiscal surpluses racked up year after year under Ms Merkel, public sector investment has been pitifully low.
The German banking system is one of Europe’s most fragmented, least profitable, most open to manipulation by local politicians and least enthusiastic about a full European banking union. As a result, Ms Merkel has dragged her feet on banking union, a step generally seen as essential to shore up the eurozone’s defences against future crises.
Even more ominous is the erosion of the technological edge that once ensured Germany’s command of world markets in cars, chemicals and other 20th-century manufacturing sectors. Much of the Mittelstand, the family-owned firms that are the backbone of the German economy, is inadequately equipped for the digital era.
Industrial success injects pride into the Federal Republic’s political identity, especially in the CDU, so it can be safely predicted that efforts will be made to reinvigorate the German economy. But it will not happen under Ms Merkel. She is too wedded to unspent budget surpluses and consensual policies that keep German society in its comfort zone.
Germany and the EU need fresh blood at the top in Berlin. Once the CDU has named its leader, Ms Merkel should prepare to quit as chancellor, so that Bundestag elections are held early next year.