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Germany at the crossroads

Coming to terms with Merkel’s toxic legacy

Artillery Row

These days it has become difficult to remember what Germany looked like, and what it felt like to live in Germany, twenty years ago. It was a country which still had a residual reputation for efficiency (now mostly lost), a country which seemed to have digested (superficially at least) reunification reasonably well and which could still count as a paragon of political stability. Most trains ran more or less on time (difficult as it may be to believe this today when the railway system is on the verge of complete collapse) and German cars and other industrial products had a reputation for reliability and high quality. 

Admittedly below the surface of general prosperity a number of problems had become difficult to ignore: the welfare state was becoming ever more expensive and was already underfinanced, and although Germany had managed to avoid the massive deindustrialisation which had haunted other European countries, it was not exactly a hothouse of innovation. German industry continued to rely on selling products which had been invented decades ago — certainly there had been improvements, but they remained fairly traditional products. For a long time this did not seem to matter all that much; in fact abolishing the DM and replacing it with the Euro gave German industry an important advantage in containing or even quashing competition from other manufacturers, even without markedly increased productivity or much real innovation.

There was a price to be paid for this experiment, of course. Ever since the Euro crisis of 2008–2010, France and Italy are trying (with considerable success) to force Germany to underwrite unconditionally the debt of the entire Eurozone — or to fork out ever higher financial transfers to alleviate financial pressures elsewhere, but there are other drawbacks as well. Having a comparatively weaker currency than the old DM depressed German wages in real terms, so whilst the export industry benefited, the average wage earner was less lucky. Moreover, without the chance to adjust the exchange rate, Germany’s accumulated current account surplus assumed gigantic proportions. In practice this meant that enormous amounts of capital were exported abroad, within the Eurozone often in the form of mostly interest free and in practice non-repayable loans to other European central banks (the famous Target II claims of the Bundesbank which now amount to an eye watering 1.2 trillion Euro). Now that Germany desperately needs cheap gas and oil, having a rather weak currency like the Euro suddenly seems to be a much less brilliant idea than in the past.

Merkel never had any strategy for Germany’s future as a country

When Angela Merkel took office in 2005 such problems had not arisen. She was lucky that her predecessor Schröder had reformed the welfare state, so that for the time being there seemed to be no need to confront voters with unpleasant truths. It became Merkel’s highest principle as a politician never to commit herself to any policy which might be too controversial. One might say that her decision, taken in 2015, to acquiesce in the influx of a high number of refugees and (in purely legal terms) illegal immigrants was an exception to this rule. That is not really true. Any attempt to stop the wave of immigrants would have produced a lot of unpleasant images — Merkel was not keen to go down in history as a kind of nasty “Cruella” like the present British home secretary — and she wanted to avoid a conflict with her coalition partner SPD, the German Labour party, at all costs. Merkel never had any strategy for Germany’s future as a country, but undoubtedly she was a good tactician. Her way to undermine the SPD was to sell most of the SPD’s policies in a slightly watered down version as her own, so that any chance the SPD might have had to attack her as too conservative came to nothing.

Merkel offered government with the real politics — the open conflict between competing political forces — left out.

Admittedly there was a deeper logic behind this attitude. Like other politicians of her generation leading centre right parties, she felt that her own party urgently needed to be modernised. The traditional milieu which had provided the core of the CDU/CSU electorate — often Catholic or conservative Protestant voters favouring a traditional model of the family — was fast eroding, especially in the urban centres. Instead, a new middle class came to dominate: secularised and shaped in their cultural attitudes more by the legacy of 1968 than by traditional ideals of social respectability. To woo such voters successfully the CDU, it seemed, had to become more progressive. It had to demonstrate that it was able to cooperate with the Greens, the classical party of culturally progressive middle-class voters. Merkel deliberately transformed the CDU (the Bavarian CSU was slightly less affected by this) into a centre left party. Hardline conservatives had never really dominated the CDU, but nevertheless they had been influential. Now the conservatives were marginalised completely.

This proved to be a miscalculation. Merkel had assumed that the traditional conservative voters, instinctively averse to too much change, were on their way out. She may have been right about that, but she had underestimated the forces of resistance against the new elite of post-national anywheres and guilt-ridden idealists. As in other countries, a majority of voters in Germany oppose uncontrolled immigration. Most are against an all-pervasive affirmative action policy in favour of various minorities combined with woke language and thought police. Such voters no longer felt that their concerns were taken seriously by the CDU under Merkel. The rise of the AfD — a right wing party embracing radical rhetoric and increasingly dominated by fruit cakes of all sorts — was a result of that process of disenchantment.

Disembowelling her own party was not the most remarkable of Merkel’s legacies. Choosing on most issues the path of least resistance, she left Germany with a largely misguided and unworkable energy policy, which made the country completely dependent on Russian gas and on the whims of wind and sun. The German armed forces, already on a downhill path in the 1990s, lost all capacity to participate in any serious military operation, and any further reforms of the welfare state were shelved. Moreover, some of the measures taken before 2006 to bring the pension system in line with demography were rescinded. Perhaps her worst legacy was her success in selling the idea to German citizens that nothing could ever undermine German prosperity — thereby foreclosing any debate about the hard choices to be made in the future. 

She was successful in doing so not only because most of the mainstream media supported her with unswerving loyalty, but also because many Germans are indeed longing for a government without real, adversarial politics. That is one of the reasons many Germans love the EU so much. It seems to offer a world without open political conflict, without any clear distinction between friend and foe. There is a deep desire for consensus, and in the past Germany’s political culture has been often better in producing workable compromises than that of other European countries. The downside of this culture of compromise, which was taken to extremes during the Merkel years, is that many political issues become impossible to discuss openly. The implied costs of the Euro, the ideal of ever growing cultural diversity, and immigration policy could hardly be debated.

It is now easy to depict any criticism of government policy as subversive

For the present left-leaning government, Merkel’s legacy presents both a burden and a bonus. It is a burden because given the imminent economic crisis, and Germany’s visible decline as an industrial powerhouse, it is no longer possible to continue Merkel’s policy of kicking the can down the road. Merkel’s failed appeasement policy towards Russia, which was admittedly enthusiastically supported by Chancellor Scholz’s own party the SPD at the time, must in retrospect be seen as a total failure. Her decision to close down Germany’s nuclear power stations, though at the time quite popular with the electorate, leaves Germany largely without any viable energy policy at all. On the other hand, Merkel’s talent for presenting her decisions as choices without any real alternative has changed the rules of the game in Germany for the foreseeable future. It is now quite easy to depict any sort of fundamental criticism of government policy — in as far as it presents positions to the right of the political centre — as subversive and extremist if not downright unconstitutional. Chancellor Scholz and his allies are determined to tighten the reins even further, if only to keep the lid on the rising discontent among growing sections of the population. Many members of the governing parties, in particular among the Greens, seem to favour a model of illiberal democracy which allows the enlightened elites in Berlin and Brussels to tell the rest of the population what to think.

Of course, such policies won’t solve any of the real problems Germany is facing. Recent polls show that up to 60 per cent of German voters are now convinced that none of the political parties are competent to address these problems. Trust in the entire party system has been eroded. The first signs of despair — of some kind of horrible sinking feeling — have emerged visible as living standards fall. The political class largely ignores this growing despondency, or hopes to fight it by waging a permanent war against so-called right wing “populism” and fictional coups d’états. What is really needed would be more honesty and more pragmatism — which would mean an end to the attempt to deal with social and economic challenges by ever more rules and bureaucratic regulations, but such virtues are sadly lacking. One does not dare to tell voters that Germany on her own can neither save the world nor even the EU. The last German chancellor prepared to pursue truly unpopular policies was Schröder during his second term of office (2002–05). He was a man somewhat on the shady side in the eyes of many observers, but at least no coward or mere time server. 

Scholz however seems to be determined to be another Merkel — a past master of the art of muddling through, relying on his ability to write off any real opposition as profoundly illegitimate. Soon he will have to sell mostly bad news to the voters, however. Hardcore Green supporters might even enjoy such news — after all, growing poverty would be a fitting punishment for the past sins of Germany and Western countries in general — but the number of Germans disagreeing with that worldview may turn out to be higher than expected in a country with a strong tradition of obedience and submissiveness.

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