This comment was published 23 May by Carnegie Europe
Merkelomics is specific to Germany. And while Berlin is not alone in having to adjust its budget to new economic realities, Merkel cannot be blamed for corrupt public finances in some southern European countries. Nor is she responsible for the Spanish housing bubble or the refusal of Greek governments of left or right to collect taxes from their voter clients.
Merkel was lucky in that her predecessor, Gerhard Schröder, did all the heavy lifting to clean up the German economy and make it competitive again. But her do-little management style is edging Germany toward zero growth, and she now faces the same populist anti-euro politics as seen from the UK’s Nigel Farage, the Netherlands’ Geert Wilders, Italy’s Beppe Grillo, and others.
Merkelomics needs to give way to smarter economic management. Other EU member states should benefit from this, but they won’t unless they too embrace reforms to free up their economies. They also need to allow the mountains of capital currently hoarded by the über-rich to become free-flowing rivers of capital that can create a new middle class of entrepeneurs and fair-paid workers.
That requires new economic thinking, but so far most politicians have been hankering after a return to an imagined past. Like former chancellors Helmut Kohl and Konrad Adenauer, Merkel can carry on. But she has done all she can and is now an obstacle to progress. All political stars fade, and Merkel’s twilight has begun