Has Germany (and Europe) reached peak Merkel?

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In the span of six days, German chancellor Angela Merkel has made a teenage Palestinian refugee cry with her government’s stand on refugee and immigration policy (then tried to pet her, in what must be one of her most cringe-worthy moments as chancellor), reiterated her increasingly isolated position in Europe in opposition to LGBT marriage equality and almost allowed her finance minister Wolfgang Schäuble to force Greece out of the eurozone, in the process undermining Merkel’s authority both at home and within the wider eurozone.Germany Flag Icon

Some week.

Merkel, who won a narrower-than-expected victory in the 2005 election, reached the apex of her political power in September 2013, when her governing Christlich Demokratische Union Deutschlands (CDU, Christian Democratic Union) nearly won an absolute majority in the country’s parliamentary elections. Despite being forced back into a ‘grand coalition’ with the rival center-left Sozialdemokratische Partei Deutschlands (SPD, Social Democratic Party), Merkel’s popularity crested. At long last, she had won a clear personal mandate for her cautious, seemingly ideology-free leadership.

But when faced with policy issues — like Greece, LGBT rights and immigration — featuring such sharp contrasts, Merkel’s popularity was always going to fall from those stratospheric levels.

The crisis over Greece’s future highlighted the limits of Merkel’s conciliatory governing style — to sit back, wait for a consensus to emerge and follow public opinion, even (or especially) if it means co-opting a rival party’s positions. That’s how Merkel has handled everything from nuclear power to raising the minimum wage. But there’s a limit to that kind of governance.

The difficult thing about the Greek debt crisis is that there’s so little room for a consensus — it’s essentially a clash of two democratically valid positions. German voters (especially those who have supported Merkel and the CDU for the past decade) are angry at watching more German funds pay to extend the Greek government’s insolvency for another three years, while Greek voters reached their breaking point with the economically disastrous conditions Germany and other European countries have demanded in exchange for those bailouts.

Unlike her German political colleagues, however, Merkel knows that if Greece falls out of the eurozone, history will judge her harshly, blaming her for the failure of European unity.

So while Merkel’s marathon talks with Greek prime minister Alexis Tsipras ended with a tentative deal to proceed with a third bailout, Schäuble has made it clear that he still favors Greece’s ‘temporary’ five-year exit from the single currency. His decision to push the temporary Grexit plan last weekend drew instant alarm from French, Italian and Austrian leaders, and it almost immediately transformed Tsipras from the villain of the latest eurozone crisis into its victim. Nevertheless, Schäuble’s skepticism about Greece’s future in the eurozone has made him now slightly more popular than Merkel domestically. Though Schäuble has long aired his differences with Merkel in private, he has now been increasingly comfortable diverging in public over Greece.

Gray, conservative men from southern Germany have often overplayed their hands against Merkel. But there’s little she can do about Schäuble’s grumblings. At 72, it’s unlikely that Schäuble has his eye set on the chancellery himself, but that doesn’t mean Merkel can just sack her finance minister:

Schäuble enjoys a special place in Merkel’s cabinet. He has been a member of German parliament, the Bundestag, since 1972; he served under Helmut Kohl as interior minister and party leader; and he negotiated the reunification treaty in 1990. Shortly thereafter, he was shot and crippled by a mentally ill man. Schäuble isn’t simply a politician, he’s a piece of German history, and therefore untouchable.

Throughout the past five years, Schäuble’s hostility has made for an excellent good cop/bad cop dynamic. It’s also beneficial for the CDU base as Merkel’s record — on domestic policy as well as Greece — has become ideologically shapeless. The rise of the eurosceptic Alternative für Deutschland (AfD, Alternative for Germany), despite its own internal growing pains, is a sharp warning that the CDU’s right flank is increasingly vulnerable.

But it’s not just Schäuble who has been hostile to the latest deal. On Thursday, the SPD’s 2013 candidate for chancellor, Peer Steinbrück, himself a former finance minister in Merkel’s first grand coalition in the late 2000s,  hinted that he might oppose entering talks for the third Greek bailout; Sigmar Gabriel, the current SPD leader and vice-chancellor in the current coalition government, condemned the ‘oxi’ (no) vote in the July 5 referendum, arguing that the Greek electorate had burned its last bridge. All of a sudden, it’s the SPD that’s executing the kind of political jujitsu that Merkel typically deploys against her political rivals.

Germany isn’t expected to hold new elections until September 2017 — more than two years from now. Merkel hasn’t indicated whether she wants to stand for a fourth term, but the example of her own mentor, Helmut Kohl, provides a warning about the dangers of clinging to power. Though Kohl engineered Germany reunification, his decision to seek a fifth consecutive term (first as chancellor of West Germany) failed miserably when voters turfed him and the CDU out of power in 1998. Schäuble, waiting in the wings to succeed Kohl, was so furious over the 1998 electoral debacle and Kohl’s refusal to stand down, that he hasn’t spoken to the retired Kohl in years. Revelations about a party funding scandal in 1999 further damaged Kohl’s reputation — and Schäuble’s. Merkel effectively leapfrogged Schäuble’s and Bavaria’s minister-president, Edmund Stoiber, to emerge as the CDU standard-bearer by 2005.

Merkel’s horrible week shows that even very popular politicians eventually fall, and it’s one reason to keep an eye on the post-Merkel Germany that could emerge. Polls in Germany are remarkably stable — though it’s been 22 months since the last election, the CDU maintains a lead of between 13 and 17 points in most surveys. Notwithstanding Greece, Merkel is still incredibly popular, and her most viable successor, defense minister Ursula von der Leyen, is a Merkel loyalist. Schäuble, and the eurosceptics in the CDU’s Bavarian sister party, the Christlich-Soziale Union in Bayern CSU, the Christian Social Union), may be troublesome, but they don’t seem likely to push Merkel out of power, either.

Nevertheless, a new SPD-led government isn’t as hopeless as polls suggest. The SPD has increasingly edged toward joining forces not only with Die Grünen (the Greens) but the once-toxic Die Linke (Left Party), a mix of former eastern communists and former SPD supporters. Even today, a ‘red-red-green’ alliance holds a majority — albeit very slight — in the Bundestag, the lower house of the German parliament. Cooperation is already happening at the state level, in Berlin between 2001 and 2011, and, currently, in Brandenburg and in Thuringia, where the SPD serves as the junior partner in minister-president Bodo Ramelow’s government.

If the SPD is shrewd enough to convince Hannelore Kraft, the popular minister-president of North Rhine-Westphalia, one of Germany’s economic powerhouses, to run for chancellor in 2017, she could pose the strongest challenge yet to Merkel’s hegemony. Kraft chose not to run in 2013, but she has been an advocate of pro-growth policies and a critic of Merkel’s federal economic policies (implemented, of course, with SPD votes). If the SPD effectively channels German anger over the new Greek bailout, it could conceivably outflank Merkel to her right as well as to her left.

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