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EU challenge for new German Chancellor

Michael Naumann

Angela Merkel's greatest challenge will be to rekindle Europe's spirit.

Angela Merkel ... chance to make a mark. — PHOTO: AP

GRANTED, SHE is no Margaret Thatcher. But Angela Merkel is the first woman Chancellor in German history, and there are some similarities. While Ms. Thatcher's route to the top was paved with true ideological enemies such as miners' union leader Arthur Scargill, Ms. Merkel quietly pushed aside good friends.

Rumour has it that she will hang a painting of Catherine the Great in her office in the Berlin chancellery. That cruel tsarina remained an exotic exception in Russia's violent history, whereas Ms. Merkel, married and a physicist by training, is anything but exotic. Her public demeanour, a curious mixture of almost ironic detachment and an obvious abhorrence of the mutual back-slapping typical of her male competitors, has defined her political image to her detriment. In the run-up to the recent election she took her party, the conservative CDU, from a 44 per cent poll rating in May to a miserable 35 per cent in September, with the Social Democrats behind by just 1 per cent. The reason for that slide was obvious: her unemotional, uncharismatic style did not click with the German people. They may have been weary after seven years of Gerhard Schroeder, and tired of his demanding social-welfare reforms, but they did not fall in love with Ms. Merkel's ill-advised suggestion of a flat tax. If the election campaign had lasted another week, Mr. Schroeder might have won it — and he certainly thought he deserved to, as he made clear to Ms. Merkel in a memorable TV confrontation after the count.

Yet Ms. Merkel remained cool. Above all other qualities, that is her real strength: looking at Berlin's political landscape and its quarrelsome natives as if it were a small laboratory set-up, populated by creatures easily managed by a regime of sanctions and rewards. It was the colossus himself, Helmut Kohl, who discovered the political talent of Ms. Merkel in 1991 among those young people who brought down East Germany's communist regime. He made her his Minister for the Environment and called her Mein Madchen (my girl): the greatest mistake of his life. It was Ms. Merkel who, almost single-handedly, removed Mr. Kohl from the leadership of his party after the election defeat of 1998, after it became known that he had illegally accepted anonymous party donations. It was a Shakespearean performance. Her male rivals kept telling each other and the press not to underestimate her ambition, while underestimating it themselves, and blocking each other on their way to fill a power vacuum created by Ms. Merkel's machinations.

Now that she has established herself as the queen bee of Germany in a grand coalition with the Social Democrats, she faces four challenges: first, to live up to her own election promises; second, to stifle her Cabinet members on the Left and their voters' desire for the preservation of the welfare state; third, budgetary stability in times of unemployment; and fourth, the bleak situation of East Germany, which is bleeding its young people into the west and continues to slide into a sad state of hopelessness.

Fiscal themes

Ms. Merkel ran on fiscal themes: balancing the budget and reforming the tax laws, which are the most complicated in the world. She will, however, suffer from a budget deficit of approximately Euro 35 billion. Her decision to raise sales tax by three points to the continental average of 19 per cent by 2007 is unlikely to induce increased domestic consumption. The habitually pessimistic Germans will continue to fund their already overflowing savings accounts. Raising taxes for those on higher incomes did not amuse her conservative voters either: they see it as a populist move, which indeed it is.

The Social Democrats in her coalition government want to reform the health service, which is the second most expensive in the world (after the U.S.), amounting to about 13 per cent of GDP. So does Ms. Merkel.

However, her own party is divided over the issue. This is the designated breaking point of her coalition.

As to remedies for East Germany, the members of the new cabinet seem to be as helpless as the old one. What is to be done about a former communist state, which has swallowed no less than Euro 1,300 billion since 1991 in federal subsidies designed to transform the new Lander with their 13.4 million people, dramatic demographic decline and unemployment rate of 18.4 per cent? One of Ms. Merkel's competitors, the governor of Lower Saxony, Christian Wulff, openly admits: "We don't know how to change this."

On the other hand Germany, declared half dead during the Schroeder years by neoliberals, continues to attract heavy foreign investment and lead the exporting nations of the world, its industry having adapted surprisingly well to the challenges of globalisation. Mr. Schroeder has spent much time promoting German exports. His personal friendship with Vladimir Putin may have blinded him on issues of human rights in Russia; on the other hand, Mr. Schroeder led German troops into their first combat since 1945 to stop Serbian atrocities in Kosovo. German soldiers are stationed in Afghanistan, and thus Atlantic relations are not altogether ruined by the rift between George W. Bush and the departing Chancellor.

Foreign policy

Ms. Merkel's foreign policy views are as yet vague and unadulterated by experience. She does not speak English well, nor French, unlike most of her political peers. Her political and cultural socialisation took place behind the iron curtain. While Mr. Schroeder's English grew under pressure, her knowledge of Russian will not be needed as Mr. Putin speaks fluent German. She will attend her first meetings with Europe's leaders with the same attitude that defined her career to the top: listening quietly, exposing an almost meek side of herself. In reality she is anything but meek, as some political heavyweights she shouldered out of the way have learned. But her biggest challenge is rekindling the European spirit after Britain's miserable presidency and amid France's continuing self-absorption, and this gives her a chance of making a mark in history besides being Germany's first woman leader.

What has not really sunk in among her voters in the western part of the country, though, is the fact that she is from East Germany.

She was an ardent member of a communist youth organisation and has no idea who won the World Cup in 1966, with a goal that did not cross the line. Geoff Hurst means nothing to her. That, come to think of it, remains an unsettling aspect of Angela Merkel — considering that her nation will host the World Cup next year. —

© Guardian Newspapers Limited 2004

(Michael Naumann is the editor of Die ZeitNaumann@zeit.de.)

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