Auf wieder­se­hen, and good rid­dance

Tehran Times - - INTERNATIONAL - By Philippe Le­grain

Al­though Ger­man Chan­cel­lor An­gela Merkel’s de­ci­sion not to seek re­elec­tion in the next fed­eral elec­tion has come as a sur­prise, it was long over­due. Merkel’s “steady hand on the tiller” has guided the Ger­man and Euro­pean ship of state di­rectly into the pop­ulists’ line of fire.

She has been dubbed the Queen of Europe and, since U.S. Pres­i­dent Don­ald Trump’s elec­tion, the leader of the free world. As the Euro­pean Union has lurched from cri­sis to cri­sis over the past decade, Ger­man Chan­cel­lor An­gela Merkel’s steady hand has helped hold the bloc to­gether. Ac­cord­ing to the con­ven­tional wis­dom, when she hands over the chan­cel­lor­ship af­ter Ger­many’s next fed­eral elec­tion in 2021 – and per­haps much sooner if her grand coali­tion col­lapses – she will be sorely missed.

How­ever, this will hardly be the case. Merkel’s 13 years in of­fice have in­volved do­mes­tic drift and Euro­pean de­cay. She has com­pla­cently coasted along, fail­ing to ad­dress Ger­many’s mount­ing eco­nomic and se­cu­rity chal­lenges, and al­low­ing Europe’s many crises to fes­ter. Her lethar­gic man­age­ri­al­ism would be tol­er­a­ble for a small coun­try in quiet times; it is cat­a­strophic for Europe’s dom­i­nant power in an era of up­heaval.

Un­like many Euro­pean coun­tries, Ger­many has en­joyed solid eco­nomic growth over the past decade. But Merkel can scarcely take credit for that. Her four gov­ern­ments have en­acted no sig­nif­i­cant growth-en­hanc­ing re­forms. And in their ob­ses­sion with run­ning a bud­get sur­plus, they have failed to in­vest in the coun­try’s crum­bling in­fra­struc­ture and ed­u­ca­tion sys­tem. Merkel has done noth­ing to pre­pare Ger­many for the dig­i­tal dis­rup­tion that threat­ens to do to its man­u­fac­tur­ing heart­land – no­tably its car in­dus­try – what Ap­ple’s iPhone did to Nokia. Ger­many will re­gret not fix­ing its roof while the sun was still shin­ing.

The euro­zone cri­sis greatly en­hanced Ger­many’s fi­nan­cial clout within the cur­rency union. That gave Merkel mas­sive po­lit­i­cal power, which she could have put to good use. In­stead she put Ger­many’s nar­row near-term in­ter­ests as a cred­i­tor first, lead­ing her to make de­ci­sions that ex­ac­er­bated the euro­zone cri­sis, shifted its costs to oth­ers, and pre­vented any long-term res­o­lu­tion.

Merkel is ul­ti­mately re­spon­si­ble for the EU’s re­fusal to re­struc­ture Greece’s debts in 2010. She was be­hind the lend­ing of Euro­pean tax­pay­ers’ money to stricken gov­ern­ments to bail out Ger­man banks. And her gov­ern­ments re­sponded to fi­nan­cial panic by de­mand­ing ex­treme aus­ter­ity and painful ad­just­ments in debtor coun­tries, even as Ger­many’s cur­rentac­count sur­plus swelled. By even­tu­ally green-light­ing Euro­pean Cen­tral Bank Pres­i­dent Mario Draghi’s pledge to do “what­ever it takes” to hold the euro to­gether, Merkel did just enough to save the sin­gle cur­rency, while leav­ing in place all of the flaws of a dys­func­tional, in­com­plete monetary union.

To be sure, with Trump de­mol­ish­ing the lib­eral in­ter­na­tional or­der and swivel-eyed na­tion­al­ists run­ning amok in Bri­tain, Hun­gary, Poland, Italy, and else­where, Merkel de­serves credit for of­fer­ing a calm, re­as­sur­ing voice of mod­er­a­tion. Her de­ci­sion to wel­come more than one mil­lion refugees was an un­char­ac­ter­is­ti­cally bold hu­man­i­tar­ian ges­ture. And whereas British Prime Min­is­ter Theresa May has hu­mil­i­ated her­self by kow­tow­ing to Trump, Merkel has spo­ken up for lib­eral, in­ter­na­tion­al­ist val­ues.

Still, Merkel’s tepid lead­er­ship has left Ger­many ex­cep­tion­ally vul­ner­a­ble to to­day’s na­tion­al­ist back­lash. The coun­try’s eco­nomic, po­lit­i­cal, and geopo­lit­i­cal se­cu­rity rest on pre­cisely the three things that na­tion­al­ists want to de­stroy: dy­namic open mar­kets for Ger­man ex­ports; an in­te­grated EU that an­chors Ger­many’s po­si­tion in Europe and the world; and the U.S. nu­clear um­brella that en­sures its de­fense.

Ger­many is not a trade cheat, as the Trump ad­min­is­tra­tion has claimed. And yet, un­der Merkel, it cer­tainly has pur­sued a beg­gar-thy-neigh­bor mer­can­tilist growth strat­egy that sup­presses wages and boosts ex­ports at all costs. Yes, pro­tec­tion­ism is mis­guided; but mer­can­til­ism en­cour­ages it. Ger­man, Euro­pean, and global in­ter­ests would all be served if Ger­many were to do more to stim­u­late do­mes­tic de­mand.

Sim­i­larly, Merkel can­not be blamed for Brexit or for many of Italy’s tra­vails, which are of its own mak­ing. And yet her euro­zone poli­cies are a big rea­son why Italy now has a pop­ulist gov­ern­ment vow­ing to block fu­ture EU trade deals, in­flam­ing the refugee cri­sis, and threat­en­ing an­other euro­zone panic.

The euro­zone will not be se­cure un­til Ger­many and Italy can both hap­pily share a monetary union. This may ul­ti­mately prove to be im­pos­si­ble. But if there is a work­able ar­range­ment, it will re­quire sig­nif­i­cant re­forms, as French Pres­i­dent Em­manuel Macron pro­posed last year. Merkel’s spurn­ing of Macron’s re­form ef­fort thus rep­re­sents a tragic missed op­por­tu­nity.

With re­spect to se­cu­rity, even as Merkel has ac­knowl­edged that Ger­many can no longer rely wholly on the U.S. for its de­fense, she has done lit­tle to bol­ster Ger­man or Euro­pean mil­i­tary ca­pa­bil­i­ties. Ger­man de­fense spend­ing re­mains in­ad­e­quate, giv­ing Trump a pre­text to un­der­mine NATO. The coun­try’s ram­shackle mil­i­tary has tanks that don’t drive, sub­marines that don’t dive, and planes that don’t fly. And there has scarcely been any de­bate about the need for a nu­clear de­ter­rent, whether Ger­man or Euro­pean.

Far from a tragedy, then, Merkel’s de­par­ture rep­re­sents an op­por­tu­nity for Euro­pean re­form­ers. Macron and his Euro­pean al­lies are right to fo­cus their cam­paign for the Euro­pean Par­lia­ment elec­tion next May on the threat posed by far-right pop­ulism. But in his de­sire not to up­set a pow­er­ful part­ner, Macron has so far failed to chal­lenge Merkel’s flawed Euro­pean lead­er­ship. With Merkel on the way out, he and other re­form­ers have a fresh chance to cam­paign for a dif­fer­ent Europe that works for ev­ery­one. If they don’t take ad­van­tage of her exit, the char­la­tans of the far right cer­tainly will.

Merkel has been dubbed the Queen of Europe and, since U.S. Pres­i­dent Don­ald Trump’s elec­tion, the leader of the free world.

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