Written by: Graham Brown
After a razor-thin German parliamentary election in September that left more questions than answers, one thing is known: whoever is in charge, it will not be the “Queen of Europe.” As Angela Merkel exits stage right following an unprecedented sixteen-year reign, she leaves behind a more powerful European Union, an unchecked rise in far-right nationalism, and a German economy with serious underlying problems. How will Europe handle losing its most powerful leader? How will the new German chancellor steer the world’s fourth-largest economy? Time will only tell, but one thing is clear—there will be no return to a pre-Merkel era.
Ultimately, it appears likely that Ms. Merkel’s domestic legacy will hinge on two key policy decisions she made—two that have faced considerable criticism but that she continues to vehemently defend. Her first key decision came in 2015 when she opened Germany’s doors to more than a million refugees fleeing war-torn Syria. In a time when other countries around the world looked the other way to the immense suffering, Merkel will be remembered for standing on the side of humanity, despite the political costs. However, not everyone saw it that way. While xenophobic and racist attacks on migrants occurred from the start of the policy, reports of refugees sexually assaulting German women in Cologne galvanized the populace. The obscure far-right party Alternative for Germany (AfD) went from not sitting in the Bundestag to picking up 94 seats in the 2017 federal elections by running on a platform that declared, if elected, they would close the German borders and reject all new asylum applications. The backlash was not contained in Germany, it reverberated worldwide and immigration became a major issue in the successful Brexit referendum of June 2016 and the election of President Donald Trump five months later.
But five years later, things look very different. AfD’s support receded in the most recent election and they centered their campaign around opposing the COVID-19 lockdowns, using the slogan “Germany. But Normal.” Immigration also played a minimal role in the 2020 US presidential election, and a Gallup poll from last summer showed that, for the first time since 1965, support for increased immigration was above water. Even in Britain, academics were stunned at the rapid change in attitudes over the past couple of years. Following the Brexit referendum, far fewer Britons say that immigration is a top priority facing their country. Ardent nationalism has certainly not vanished, but these changes suggest that in the end, Angela Merkel will be praised in the history books for her humanitarian decision to help innocent Syrians escape their war-ravaged homeland.
She should be remembered less fondly for her other key decision, however. In 2011, following the accident at the Fukushima Daiichi Nuclear Power Plant in Japan, Merkel accelerated plans to close nuclear power plants—cutting the percentage of energy supplied by nuclear energy in half over the past decade. She argues that the decision made Germany safer, but, in reality, her administration simply replaced nuclear power with dirtier energy such as coal and natural gas. Neighboring France continues to use nuclear energy to supply most of its power grid and the result is far cleaner energy. The existential threat of climate change has made it imperative that global powers transition to greener power, but Merkel did the opposite. Her reliance on fossil fuels is not only an environmental concern but a security concern as well. Merkel’s decision to forgo energy independence led her to negotiate a deal with the Russians to build the Nord Stream 2 pipeline, which will provide Germany with natural gas and Vladimir Putin with a powerful bargaining chip. Putin has long desired more influence in Western Europe, and Merkel’s energy policy gave the Russian president a chance to extend Moscow’s shadow. It is worrying that Putin will have the option to cut off a huge source of energy should he be displeased with German or NATO policy. This is an enormous amount of leverage to give an adversary, and allies in Eastern Europe, especially Ukraine, fear Putin will use the pipeline to pressure Germany into turning a blind eye towards his expansion in the region.
Overall, at home, Germany is in a precarious position. The next Prime Minister—who will likely be Olaf Scholz, the Finance Minister and leader of the Social Democrats—will need to turn inward and address numerous domestic problems. For all the success she had on the international stage, Merkel leaves behind a shaken German economy. Merkel and her Christian Democrats’ outdated belief in supply-side economics and opposition to public investment have resulted in crumbling infrastructure. The autobahn is overcrowded, the trains are unreliable, and millions do not have high-speed internet. Why? Because Merkel and the CDU have long been more obsessed with balancing the budget than investing in the people. Scholz has signaled that he wants to temporarily suspend the so-called “black zero” policy that dictates a hawkish approach on debt, but permanent suspension will be near impossible with such a narrow mandate and widespread support for the rule among conservatives. Investment in public utilities is essential to keeping Germany as a regional power, and ultimately Merkel will be remembered as a chancellor concerned more with economic theory from the 1990s than with directly helping the German people.
Her supporters will undoubtedly point to strong economic growth throughout her tenure as a sign that she catapulted Germany into its role as an economic powerhouse. A closer look at the numbers, however, reveals another potential flashpoint that Scholz will need to address—Germany’s reliance on China. Merkel’s trade deals with Beijing have supplied short-term economic gains, but similar to the United States thirty years ago, the Germans will not be able to keep up with Chinese manufacturing given China’s huge population advantage and lax labor laws.
A perfect example of this conundrum is the auto industry. Long the most powerful industry in Germany, it has failed to adapt to increasing demand for electric vehicles and now finds itself facing an almost certain decline in jobs over the next decade. Ever since the Volkswagen scandal of 2015, where the company falsified emission reports, the industry has struggled to compete in this new, green market, and now imports nearly all of their electric engines from the Chinese. While this has been a short-term boon for these major companies, over the long term, as the internal combustion engine is eventually phased out, less and less German cars will be made in Germany and jobs will disappear. If Sholtz wants to keep his country competitive, he must accept that the combustion engine will ultimately have to go (unlike Merkel, who has staunchly defended it) and manufacture electric cars on German soil. To do this he needs to take a harder line against China and impose tariffs that can protect Germany’s most important industry and the millions of jobs it provides. While this strategy would certainly be a radical departure from the free-trade policies that characterized Merkel’s reign, it is necessary to correct the trade imbalance that analysts warn is inevitable.
It is impossible to discuss Chancellor Merkel’s legacy without also mentioning her role in holding the European Union together through perhaps its most tumultuous decade. While she deserves praise for steadying the ship during the Greek debt crisis and Brexit, the narrative that she is a figure who transcends politics and leads for the benefit of European people as a whole is false—she consistently put her country’s interests first. During the debt crisis, she came down hard on Greece, forcing the country to submit to German-written economic reform or face being expelled from the euro currency union. Greece owed nearly all of its debt to Germany at that time and analysts remarked that Merkel’s policy was not so much about the well-being of Greek citizens as it was about protecting the solvency of German banks. Bailouts are always politically unpopular in the moment, whether in Germany or the United States. However, citizens count on our leaders to sometimes make the unpopular decision in the short term if it has long-term benefits. Bailing out Greece was, without question, the correct thing to do. It saved the nation from going bankrupt and from millions of Greek citizens losing their jobs and livelihoods. But we must remember that Merkel did not act out of the kindness of her heart. Her primary interest was the banks and the German economy.
Another challenge that the post-Merkel EU will have to contend with is the rise of illiberalism in former satellite states— namely Hungary and Poland. Of all of the issues she has contended with over her reign, this is the one where Merkel faced the most widespread criticism, and rightfully so. In order to maintain her conservative coalition within the EU, she has been reluctant, at best, to criticize her right-wing populist “allies.” This policy of complacency was on full display ten months ago when the two black sheep of the European Union showed up to a summit and threatened to veto the major economic recovery package that Merkel had spearheaded if she did not gut provisions saying that beneficiaries of the money must follow basic anti-corruption laws. Corruption has been an especially large problem in Hungary, where misappropriation of funds is widely reported. The ploy at the EU summit was a bluff on the part of Hungary and Poland—they are the two biggest beneficiaries of the EU budget and rely on the institution to keep their citizens out of poverty. Because of this, Merkel had leverage against them but chose not to use it. She folded and implemented the radical demands of these rogue states, and her refusal to call their bluff simply kicked the inevitable conflict down the road. While it is understandable that she would not want to lose another EU country during her reign (and Hungarian President Viktor Orban has long threatened to do just that) she has considerably more power than he does and should have used that power to force much-needed reform in a country that is slipping towards autocracy and fascism.
So what is Angela Merkel’s legacy? As this article has tried to demonstrate—it’s complicated. There has perhaps never been a better crisis manager who held so much power. She was able to keep the European Union (mostly) whole even as pundits everywhere predicted its downfall. She was able to keep the Euro strong and warded off multiple financial catastrophes. However, when you look at the policies she advocated for throughout her sixteen-year tenure, her record is much more mixed. Germany appears to be backsliding economically and environmentally and the next parliament must make the serious investments that Merkel was unwilling to do. Ultimately, it is unquestionable that she was a towering figure in German and world politics, but there are many problems that she left unanswered and that must be fixed if Germany wants to remain an economic superpower.