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Assessing the legacy of Merkel

Actual leader of the free world: Angela Merkel (Photograph by Markus Schreiber/AP)

On Monday, German chancellor Angela Merkel announced the political equivalent of a terminal illness. She said that she would step down as the chairwoman of the Christian Democratic Union by the end of the year and that she would not run for re-election as chancellor in 2021. Merkel remains the German chancellor, but there is now an expiration date to her time in office.

The Washington Post’s Griff Witte has an excellent explainer of Merkel’s decision and what it means for Germany and the West in general: “A vigorous defender of the liberal international order, Merkel has been regarded as a counterweight to Trump-style nationalism — one with the stature to defend free trade, multilateral institutions and the rule of law amid doubts over whether those ideals still matter in Washington. But her slow-motion departure leaves a void.”

Indeed, in a follow-up story, Witte and Anne Gearan note the ways in which Trump Administration officials will not be sorry to see Merkel depart the political stage: “This is a huge win for Trump. Germany is the largest economy in Europe, and we’ve seen in Sweden, in Italy, France, in the UK with Brexit, how this is building,” said a US official, referring to the rise across Europe of right-wing populism and voter dissatisfaction with economic and immigration policies.”

Merkel has been chancellor for 13 years; she is the longest-serving political leader in the European Union. The hosannas to her stalwart leadership are coming in already. Many US foreign policy observers who disdain Donald Trump describe her as the actual “leader of the free world”. Carl Bildt’s column in the Post’s Global Opinion section seems like a good example of this kind of reaction:

“In power in Berlin for 13 years, Merkel has been a towering personality in the complicated politics of European integration, partly because of the sheer size and weight of Germany, but to a very large degree because of her personality and style. She always listens carefully to the concerns and arguments of others, dissects the facts of any given situation, and then patiently explores the possible ways of moving forward. Germany in the Merkel era certainly hasn’t been the bully of Europe in the way it’s sometimes portrayed, but rather the discreet facilitator.”

I was all set to praise Merkel as well, but this little aside in Bildt’s column stuck in our craw: “In spite of widespread expectations to the contrary, particularly in the United States, the Greek and the euro crisis were overcome, and Europe has come out with strengthened rather than weakened institutions after the post-2008 economic crisis. Merkel was a key part of this.”

Well, I certainly agree that Merkel was a key part of ... something. The notion that a post-Brexit Europe is stronger than it was a decade ago borders on the delusional, however. And it raises an uncomfortable truth about Merkel’s political legacy: while she was a stalwart defender of the liberal international order, she was also the author of many of its discontents.

After reading Randall Henning’s excellent overview of the eurozone crisis in his book, Tangled Governance: International Regime Complexity, the Troika, and the Euro Crisis, it seems clear that Merkel’s handling of it puts her greatest political strengths and weaknesses on full display. When the scope of the Greek crisis was starting to emerge, Merkel’s response was to do nothing because there were local elections coming up in Germany and she did not want the issue to be front and centre. This inaction helped to make everything worse in Greece and the rest of the eurozone.

Merkel also made sure that the rescue packages for Greece and the subsequent countries were not handled by the European Central Bank, but by a separate special purpose vehicle. She arranged this to limit the ECB’s influence over the nature of the rescue packages, and she suspected that it was far more dovish than she was. She also insisted on the IMF’s involvement to further dilute the ECB’s autonomy. Needless to say, the troika did not work terribly well.

Merkel’s fundamental flaw was that while she was committed to a stronger European Union, she pursued “Germany first” policies. The first few years of eurozone crisis responses matched Merkel’s social liberalist policy preferences and resonated with her domestic base. The outcome was a series of belated rescues that put a misplaced faith in fiscal austerity and regulatory reform to alleviate market pressures on Greece and the other affected economies. Austerity never worked as intended, and the regulatory reforms failed to make any of the eurozone crisis economies look any more like Germany. It is therefore not surprising that Europe was the one region in the world that grew less in the Great Recession than during the Great Depression.

There are a lot of causes for the rising ride of populist nationalism, and questions about identity and immigration are no doubt central to any comprehensive explanation. Merkel’s response to the refugee crisis in 2015 represents her bravest political instincts, and her actions no doubt cost her politically. But the role of financial crises is underestimated as a cause for the growth of right-wing populism. Merkel, more than any other European politician, bears responsibility for making a bad crisis worse. Her values were always in the right place; her economic policies less so.

Daniel W. Drezner is a professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University