German Chancellor Angela Merkel has been anointed the main newsmaker of the year by a number of policy and media institutions, including Time magazine. Some have praised her hard-nosed handling of the Greek debt crisis in the first half of 2015 — a response that arguably saved the Eurozone from falling apart.
Most have cited her surprise decision to open Germany’s door to what seems set to become one million refugees from war-torn West Asia. In each case, she decided to take on a major regional problem and take calculated political risks to solve it.
The true measure of Merkel’s policies would be how much they have helped maintain the strength and stability of the European Union (EU).
The EU as an institution is far from being above criticism. On foreign policy, countries like India see it as prone to moralistic pronouncements minus any willingness to invest in means to enforce or protect its worldview. Nonetheless, it is the largest economic entity in the world, an embodiment of a new and more open system of running the world and a force, if somewhat grey and bureaucratic, for global stability. Merkel, as head of the EU’s wealthiest and most powerful member, plays a crucial role in ensuring the EU’s future.
The EU faces a number of challenges, but the most important one is its economic weakness and the xenophobic politics that is spreading across Europe as a consequence. While Germany is seen as the economic bulwark of the EU, its chronic under-consumption distorts the continental economy. But it can be argued that this economic failing has been more than offset by the fiscal whip she wielded against Greece and other indebted euro states. Her hardline stand here helped shore up pro-EU sentiment in Germany and the northern European states.
Merkel, like many mainstream conservatives, has battled against the anti-immigrant and anti-euro parties that have proliferated across Europe. Yet her refugee policy has, at least in the short term, led to a surge in support for the far-Right Alternative für Deutschland. Her failure to consult her own party, the public and other EU members when making the decision to welcome the refugees was dangerous. Nonetheless, she has on balance been good for Europe. The euro-crisis is already a fading memory for the rest of the world. Merkel has done her maths and knows Germany can afford the refugees. In time, public resentment against her should recede. She can be expected to continue to rule both Germany and, unofficially, Europe for some more time to come.