How Angela Merkel Turned Back the Clock of German History
By Niall Ferguson | Bloomberg
August 26, 2021
Angela Merkel has long had her admirers in the Anglophone media. In November 2015 the Economist called her “the indispensable European.” A month later the Financial Times named her its “person of the year.” Time magazine proclaimed her “chancellor of the free world.” When Donald Trump was elected president of the United States, the New York Times dubbed Merkel “the liberal West’s Last Defender.”
I confess I have never quite seen her that way. My one encounter with Angela Merkel was in Spain during an early phase of the Eurozone crisis. It was February 2011 and I happened to be in Madrid, where I was trying to work out just how close to collapse the European banking system was. I was between meetings with officials at the central bank and finance ministry when, walking with a swiftness rarely seen in Madrid’s corridors of power, the German chancellor and her entourage arrived for a meeting with the hapless socialist prime minister, Jose Luis Rodriguez Zapatero.
I had never before seen a politician behave with such canine deference as Zapatero did when Merkel entered the room. It puzzled me at first because the German chancellor does not look at all commanding. The word journalists cannot resist when describing her is “frumpy.” And yet I discerned within a few minutes her subtly intimidating aura. Angela Merkel does not suffer fools gladly. Indeed, she struck me as having a low tolerance of even quite smart people. Tracey Ullman does by far the best Merkel impersonation. But Merkel often treats her inner circle to her own spoofs of other leaders (the former French president, Nicolas Sarkozy, was a favourite target).
Vladimir Putin, by contrast, let his dog do the intimidation at one of their meetings, consciously exploiting Merkel’s fear of dogs. But a former ministerial colleague once told me that, privately, Merkel was rather impressed by Putin. After his famously menacing speech at the 2007 Munich Security Conference, when he attacked the “unipolar order” dominated by the United States, she was publicly impassive. Backstage, her comment was: “Cool speech!” (“Geile Rede!”).
That is not, of course, how German voters see her. The appeal of “Mutti” is of someone who has no real interest in power, but who governs purely in order to provide her people with the thing they crave above all else: stability. Asked once what the word “Germany” inspired in her, she replied: “Pretty, airtight windows” (“schöne dichte Fenster”).
Having spent the first 35 years of her life in the German Democratic Republic, Merkel not unreasonably names as her favourite movie “The Legend of Paul and Paula,” a whimsical East German production released in 1973 (but directed in the French cinematic style of 1968) about two star-crossed lovers in East Berlin. At one point in the film, Paula says to Paul: “We’ll let it last as long as it lasts. We’ll do nothing to stop it and nothing to help it.” That rather sums up the strangely passive love affair between the Germans and their leader.
The voters have never given Merkel the resounding mandates that British voters once gave Margaret Thatcher. For most of her time in office — three out of four terms — she has been obliged to govern in fractious grand coalitions with the Social Democrats. And yet she has been chancellor for 16 years — five years longer than Thatcher was Britain’s prime minister, though short of Bismarck’s 19 years in office. During Merkel’s reign, there have been four American presidents, four French, five British prime ministers, eight Italian and eight Japanese. As with Paula and Paul, it has lasted longer than expected.
To understand Merkel’s appeal, one must go back in time to the period before Bismarck forged the fragmented German lands into an empire — to the era when the Germans saw themselves as they once again see themselves today: as strangers to power. In 1841 Robert Sabatky portrayed the “Deutsche Michel” — Germany’s answer to John Bull — as the naive victim of unscrupulous neighbours, who picked his pockets and stole the shirt off his back. Time and again during the Eurozone crisis, I was reminded of this image. And the more I thought about it, the more I began to see that Angela Merkel was the reincarnation of Michel: die, Deutsche Merkel, in fact.
According to German economists such as Hans-Werner Sinn, the crisis had a simple explanation. While the virtuous German Michel toiled away, reforming his labour market, controlling his unit labour costs and balancing his budget, less scrupulous peripheral countries gorged themselves on the cheap euro credit made available to them by their banks thanks to the monetary union.
When the crisis struck, the question was whether or not the European Central Bank and other European agencies ought to bail out the “peripheral” countries at the expense of the savers and taxpayers of the “core.” Many Germans sympathized with (even if they didn’t quite follow) Sinn’s argument that the way the ECB supported the peripheral economies through its TARGET2 settlement system amounted to a covert “transfer union.” What the Southern Europeans needed to do was what Germany had done after 2003: to reduce their price and wage levels, and thereby regain domestic competitiveness. This was a constant refrain in the German press.
Like many others, I said at the time that such arguments made little sense. They condemned Southern Europe (especially Greece) to a protracted Depression. And they understated how much “Michel” had gained from the euro and how much he would have lost from its collapse. The crisis of the Eurozone did not happen because the South Europeans failed to enact German-style reforms of their labour markets. The crisis (as Adam Tooze has argued) was a transatlantic banking crisis from which the German banks, large and small, were in no way exempt.
In her inimitable way, Angela Merkel channelled the Deutsche Michel’s resentment at the profligacy of the South Europeans — not so far as to force any country to leave the monetary union, but just enough to ensure that maximum pain was inflicted in return for the bailouts that kept Greece and Portugal on board. The Merkel style was the last-minute deal, usually cobbled together in the pre-dawn hours of a Monday morning, just before the financial markets opened. It meant that the bailouts happened, but only after maximum uncertainty and maximum economic damage.
Mario Monti, the technocratic Italian prime minister between 2011 and 2013, summed it up nicely: “In Germany,” he used to say, “they still think that economics is a branch of moral philosophy.”
The very different events of 2020 have taught us that none of that brinkmanship was necessary — that the European Union if its leaders had chosen to do so, could have created a NextGenerationEU fund and sold Eurobonds 10 years ago in order to sort out the mess the banks were in. But that would have taken the kind of strategic vision that Angela Merkel, the perennial tactician, has always eschewed.
Even in the midst of the pandemic, it took the French president, Emmanuel Macron, to force through the long-overdue fiscal integration that had always been implicit in the project of a single European currency. Looking back, we can see that Merkel’s — and Wolfgang Schaeuble’s — insistence on fiscal straitjackets for Germany and everyone else caused avoidable economic harm. Though not to Germans.
This was not the only great strategic error of Merkel’s career. On live German television in July 2015, Merkel reduced a young Palestinian refugee to tears by explaining that her family might have to face deportation. “There are thousands and thousands of people in Palestinian refugee camps,” the chancellor explained. “If we now say, ‘You can all come’ … we just cannot manage that.” Six weeks later, however, Merkel opened the gates of Germany by declaring: “We can manage that.”
All kinds of historical explanations have been offered for Merkel’s epoch-making change of mind, including her East German upbringing and her Lutheran father. Who knows? Faced with Reem Sahwil’s tears, the chancellor’s reaction was an impulsive attempt to comfort her, followed by a massive, unilateral U-turn, which she later had to reverse. Here was one of those rarities in politics: a full 360-degree pirouette.
Yet in history motives matter less than consequences. Merkel’s decision led to a surge of 1.2 million asylum applications in 2015 and 2016, about a third of them by Syrians. This was more than double the number of applicants in the preceding six years. Three-quarters of the asylum seekers were aged 30 or younger; 60% were male. About half the applications were approved, but only around 80,000 of those denied asylum were deported. About 76% of the accepted refugees were Muslims.
The long-term consequences of this mass influx remain to be seen. According to the Pew Research Center, the Muslim population of Germany (which was 6% in 2016) could be anything between 8.7% and 19.7% by 2050, depending on the future rate of immigration (not to mention trends in birth rates). The short-run consequences, however, are clear, as my wife Ayaan Hirsi Ali has shown in her book “Prey.” The influx of young men from Muslim-majority countries contributed significantly to a wave of sexual crimes committed against German women, of which the mass assaults in Cologne on New Year’s Eve 2015-16 were only the most widely reported.
This was a strange achievement for the conservative woman who in October 2010 had told a meeting of younger members of her Christian Democratic Union party in Potsdam that attempts to build a multicultural society in Germany had “utterly failed.”
The unintended consequences of the migration crisis extended beyond the safety of Germany’s streets and other public spaces. The spectacle of a complete loss of control at the European border shaped the debates in Britain on whether or not to remain in the European Union. As David Cameron ruefully remarked, many British voters watching the scenes at the German border on the evening news said to themselves: “Get us out of here!”
Nor did Merkel do nearly enough to help Cameron win the referendum on Brexit. She offered him risible concessions on the free movement of people when he desperately needed a real deal. Many Germans continue to believe that Britain’s departure from the EU was an act of British self-harm. They underestimate the long-term weakening of the EU itself that Brexit will ultimately cause.
For much of the past decade and a half, Angela Merkel has been the dominant personality in European politics. And yet throughout that time, she has somehow encouraged the Germans to think of her — and of themselves — as the old German Michel of the Vormaerz era, that Biedermeier figure of stolid simplicity, constantly shocked by the trickery and extortion perpetrated against him by his wily neighbours.
In reality, of course, Angela Merkel is as wily as they come. Her former defence minister, Karl Theodor zu Guttenberg, once described her to me as a supreme tactician, whose “Merkelvellian” skill at manoeuvring — her genius for maximizing her options and eliminating rivals — compensated for her lack of strategy. One consequence of this Florentine gift is the low calibre of the figure who eventually emerged as her successor, the deeply underwhelming CDU chancellor candidate, Armin Laschet.
Yet there is a wider and more profound consequence. Michel at the end of the Merkel era cuts a strangely enervated figure. The country leads the world — in the technologies of the last century. Even after an increase in the foreign-born share of the population from 8% to nearly 14%, Germany’s demographic future still looks more like Japan’s than America’s.
The intellectual life of German universities was the envy of the world in the period from the 1880s to the 1920s. Today only one — Munich — makes it into the top 50 of U.S. News & World Report’s global university rankings. Twenty years ago, I read Die Zeit and Der Spiegel. Let me be brutally frank: I now seldom bother, as their content is nearly all so drearily parochial.
Is there a contemporary German writer who deserves to be mentioned in the same breath as Kazuo Ishiguro or Liu Cixin? Even Merkel’s beloved Bundesliga is watched by far fewer football fans around the world than the English Premier League. Why? Because it’s boring. (Mein Gott, the German national team even lost to England last summer.)
As Angela Merkel leaves office — undefeated, a four-time winner — most Anglophone journalists will salute her political achievement. But to be in power is not to lead. Ten years ago, the Polish politician Radoslaw Sikorski declared: “I fear German power less than I am beginning to fear German inactivity.” He was right to worry.
Der Deutsche Michel’s female reincarnation has all but brought German history to a halt. After a flood of migrants, a deadly plague and then literal floods, what might be required to restart it remains unclear.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Niall Ferguson is the Milbank Family Senior Fellow at the Hoover Institution at Stanford University and a Bloomberg Opinion columnist. He was previously a professor of history at Harvard, New York University and Oxford. He is the founder and managing director of Greenmantle LLC, a New York-based advisory firm. His latest book is “Doom: The Politics of Catastrophe.”
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