| Merkel and the future of Europe Dec 16th 2012, 13:24 There is no doubt that Merkel is the most powerful politician in Europe. Is she pursuing the right policies. A lot of people hope so, but there are also big doubts. http://www.spiegel.de/international/...-a-872195.html Quote:
The crisis has its comical sides, of course. Take, for example, the story with the submarine. Angela Merkel starts to giggle. It was lopsided. Suddenly she snorts with laughter, as tears run down her cheeks. She can't even talk anymore. Lopsided, she says, trying to pull herself together. But she can't. The chancellor of the Federal Republic of Germany has succumbed to an uncontrollable fit of laughter.
The story Merkel is having so much trouble relating goes like this: The Greeks ordered a state-of-the-art, class 214 submarine from the Howaldtswerken-Deutsche Werft shipyard in the northern port city of Kiel. But when the vessel was ready, they refused to pay. The Greek military experts who had traveled to Kiel explained that the Papanikolis listed even in slight swells, and they declined to take delivery of the vessel.
The Germans tested, measured and checked the sub, but found nothing amiss. The boat's lopsidedness is apparently something only Greeks, up to their eyeballs in debt, can detect -- an anecdote that still sends the chancellor into fits of laughter years later...
...She currently holds the fate of Europe in her hands. If the euro is rescued, Merkel will get most of the credit, and if it falls apart, she will be forced to shoulder the blame. No other German chancellor has had as much power on the European continent as the current one. And yet, ironically enough, none of Merkel's predecessors were as dispassionate about the European Union as the woman currently governing from the Chancellery. Merkel is different...
...For Merkel, Europe is no dream, vision or object of desire. She has since learned that it is part of the Christian Democratic etiquette to sugarcoat Europe with pathos, which is one of the reasons she traveled to Oslo on Monday for the presentation of the Nobel Peace Prize to the EU. It was, however, little more than a show for the public. In the end Europe, for Merkel, is a question of prosperity, of euros and cents -- and not a matter of the heart...
...When she flew to Greece in October, she prepared by reading an interview with the Greek prime minister in the leading German business daily Handelsblatt. In it, Antonis Samaras said that he now makes himself available to his ministers on weekends, and that he also has time for face-to-face meetings. The message he was trying to convey is that the era of inefficiency is finally over. But one could also interpret the premier's words differently, namely as evidence of the long road ahead for Greece. How can a prime minister, after all, believe that having to work on the weekend is even worth mentioning?
For months, Merkel wavered over whether or not Greece should remain in the euro zone. As recently as summer, she couldn't decide whether to believe in the domino or the ballast theory, as she called the two alternatives. According to the first theory, a Greek bankruptcy could drag other threatened euro countries into the abyss. Proponents of the second theory, on the other hand, believe that Greece is the ballast that the euro zone has to jettison to recover.
It's difficult to say why Merkel eventually chose the domino theory. Perhaps it was partly the doing of Chinese fund managers who, during her visit to Beijing in the summer, bluntly described to her what they saw as the devastating consequences of ejecting Greece from the euro zone. If that happened, they said, China would no longer have any confidence in the euro and, as a result, would stop buying bonds issued by euro-zone member states.
Perhaps it was also the warnings coming from her counterparts in Europe. The Slovenian prime minister, for instance, told her that a Greek bankruptcy would result in a 5 percent shrinkage of his country's economy. That too made an impression on Merkel...
...What earns Merkel's respect is discipline. When she flew to Indonesia in the summer, she lionized President Susilo Yudhoyono. He's a short, inconspicuous man, but his country has managed to reduce its deficit from 80 percent of gross domestic product to 20 percent within just a few years.
Indonesia is the kind of place she wishes Greece resembled: industrious, calm and inspired by the will to make up for the mistakes of the past. If Indonesia can get its debt crisis under control, Europe certainly should be able to do the same. That was the unspoken message of Merkel's trip.
Merkel's reality holds: Germany is strong, but not strong enough to keep a sick Europe going in the long term. "We want a European Germany, not a German Europe," author Thomas Mann said after the war. Merkel would probably subscribe to Mann's somewhat abstract statement. But in practical terms, she believes that it wouldn't hurt Europe to become a little more German, at least when it comes to incurring debt. How else is the Continent supposed to compete with the up-and-coming Asian economies?
Since becoming chancellor, Merkel has been to China six times. The only non-European country she has visited more often is the United States. She admires the efficiency with which the Chinese have managed to become the second-largest economic power on earth in the space of three decades. But she also knows how this has shifted the balance of power worldwide -- and that it doesn't look good for the Europeans.
The people who work for her are familiar with Merkel's favorite trio of factoids: Europe represents only 7 percent of the world's population, it accounts for about 25 percent of global economic output but also hands out half of worldwide social expenditures. You don't have to have a Ph.D. in theoretical chemistry, as does Merkel, to understand that Europe has a problem.
It's important to prevent the worst from happening, the chancellor says sometimes, and she is quick to describe what "the worst" means for her: that Europe might eventually become a place to tour the evidence of past successes, a sort of Disney World for Chinese tourists.
That's why she finds trips to China instructive. For three millennia, Chinese civilization was considered the most advanced in the world. But then poor political decisions resulted in China falling behind the rest of the world and it became irrelevant.
Merkel fears that Europe could now be at a similar historical fork in the road. The financial crisis of the last few years has clearly demonstrated that the Western model of freedom isn't nearly as firmly established as it might seem...
..."It can't be said often enough," she told delegates to the convention of her Christian Democratic Union (CDU) in Hanover last Tuesday. "The European debt crisis cannot be solved with a single stroke, a single bang, the one supposed panacea." It was a typical remark for Merkel and one that she has indeed repeated several times.
She finds visions -- and master plans -- horrifying. Who knows what the world will look like in a year? She proceeds cautiously, moving from one crisis summit to the next. If a decision proves to be a mistake, she corrects herself...
...It's a policy devoid of passion, one that assumes that voters should only be given the truth in homeopathic doses. She treats the Germans like children, covering their eyes when reality becomes too horrible to look at. Merkel deliberately keeps things up in the air and ambivalent, leaving room for a variety of possible outcomes.
Her opponents are clueless, not knowing how to attack Merkel and her approach. She is a moving target and therefore is rarely caught. Her Social Democratic challenger for the Chancellery in next year's general election, Peer Steinbrück, calls it a "veil dance." And it is one that completely flummoxes his Social Democratic Party. They criticize Merkel's approach to Europe only to vote in favor of it in parliament every chance they get...
... Merkel has admitted, for the first time, that a debt haircut in Greece is conceivable. The crisis is about to become expensive, especially for Germany. The question will be whether the Germans will continue to support Merkel's levelheaded approach when they're being asked to fork over real money.
| IMO Merkel, like all eurozone politicians, is trapped by what has gone before. Her freedom of action is very limited. |  |
