So much media attention was concentrated last weekend on British Prime Minister David Cameron’s spectacular refusal to sign the remarkable 23-nation fiscal agreement in Brussels that few commented on the leader who made it possible: German Chancellor Angela Merkel. Certainly, as head of the euro zone’s biggest and fastest-growing economy, her position carries a natural political weight; and, till last week, it was her steadfast (and not unreasonable) refusal to bail out indebted Southern European countries without strict conditions that had deepened the crisis. Since the crisis broke, she has single-mindedly insisted that the single currency benefits Germany, and that she would do everything to ensure that it survived. Of course, given that Germany consistently runs a trade surplus with the euro zone, she has every incentive to ensure this. Friday’s agreement showed that she has had her way, no matter how imperfect the terms.
It is no small feat to convince the 17 squabbling members of the euro zone and 10 chronically sceptical non-members to commit themselves to a closer fiscal union that sacrifices a significant element of national sovereignty. In doing so, she has been able to refashion Europe in Germany’s image — at least fiscally. So no matter how many Greeks go on strike to protest the austerities forced on their government, they will have to live with longer hours, lower pensions, later retirements — in short, the kind of iron discipline that their German counterparts follow as a matter of course. It is no coincidence that Italy’s new premier, Mario Monti, is widely referred to as “the German” for his distinctly non-Italian cost-cutting proclivities. Ms Merkel, of course, works from a position of strength as only one of three euro-zone economies that are actually growing (France and Estonia are the other two) and unburdened by debt. Still, less than a decade ago she was an unknown quantity, who emerged from the ashes of unification as Helmut Kohl’s protégé (he affectionately if inaccurately called her Das Madchen or The Girl). When she became chancellor in 2005, she was widely underestimated; six years on she dominates Europe like a colossus. The inevitable comparisons arise with the first Iron Chancellor, Otto von Bismarck, who, between 1862 and 1890, yoked the German federation (not to forget parts of Scandinavia and France) into a country that changed Europe’s destiny forever.
The comparison holds up to a point. Like Bismarck, Ms Merkel has a strong belief in Germany’s destiny. For Bismarck, that notion stemmed from his Prussian roots and deep-seated belief in monarchy (after all, he elevated a king into an emperor). For Ms Merkel, they stem from Germany’s amazing post-War recovery and economic dominance. Bismarck’s style was personalised, non-institutionalised and, more often than not, distinctly amoral. An inheritance of disregard of formal institutions of governance was eventually largely responsible for Germany’s collapse and European war. Ms Merkel, on the other hand, has showed a singular determination to make European countries follow rules. Even if the final agreement is modified to reflect member countries’ concerns, Germany’s chancellor has ensured that its place in global politics is stronger than ever.
