Daunting challenges for a dogged leader

Angela Merkel is set to return as German chancellor for a record-equalling fourth term, an achievement that is a testament both to her dogged personal political statecraft and the persistent good health of the German economy.

But as she contemplates four more years in office, Mrs Merkel – indefatigable as she is – will know that she will now need to overcome a daunting list of challenges at home and abroad if she is to cement her legacy.

The rise of the Alternative for Germany (AFD) and the humiliating showing of her previous coalition partner, the Socialist Democrats (SPD), means that Mrs Merkel will now govern with a smaller majority.

A coalition between Mrs Merkel, the Free Democrats (FDP) and the Greens will take months to bring to fruition and limit her options. It may, however, mean a stronger platform from which to tackle some of the long-term issues facing Germany’s economy which, while still running up record-breaking surpluses, is now starting to show early signs of ageing.

As Mrs Merkel warned in her last speech of the campaign, Germany, with its reliance on diesel cars and traditional manufacturing, risks ending up as a “technological museum”. The “dieselgate” scandal, the doubts over the long-term solvency of Deutsche Bank, the recent bankruptcy of Air Berlin also all serve as a reminder that even in Germany things go wrong.

But it is abroad that Mrs Merkel’s greatest challenges lie. With Donald Trump in the White House and Brexit set for 2019, it is to Mrs Merkel that liberal Europe will turn to inject new life into the European project.

However, Mrs Merkel will face growing calls to do more to share the burdens of a continent, at a time when German savers are losing patience with Europe. The FDP has said it will not back greater fiscal transfers.

Yet Emmanuel Macron, the French president, will press his demands for a new Eurozone budget, finance minister and parliament in a speech on Tuesday.

It is clear that Mrs Merkel cannot back change on that scale. But with eastern EU states like Poland posing a threat to EU cohesion, the pressure on Mrs Merkel to deliver will grow.

And then there is Brexit. Mrs Merkel should be believed when she says she will prioritise the EU legal order over doing special favours for Britain, but the departure of Germany’s most important free market ally in Europe ultimately only puts more pressure on Berlin.

“You Brits have left us alone in Europe, and we do not thank you for that,” was how one senior Merkel ally put it. But she will be asked to lead, like it or not.