Merkel will leave the presidency of Germany after the general elections to be held on September 26 this year. This means closing a stage that has lasted for 15 years. We have to go back to October 2005, when after the general elections Angela Merkel would become the first woman chancellor of Germany thanks to the understanding of a great coalition of the CDU and SPD parties.
His mandate has enjoyed notable popular support. The approval percentage has always been above 50%, with an average of 70%, with July 2010 being its worst month with an approval rate of 52%.
However, at the end of his mandate, it is time to evaluate his results in his main challenges: the German economy, crisis management and Brexit.
The Grand Coalition with the SPD has been its main asset in managing the country
In an attempt to ward off political extremism in Germany, Merkel has opted for the grand coalition with the German Socialists represented by the SPD. If there is one word that can define Germany since Merkel became president in 2005, it is stability.
Stability represents great value, especially when we have seen a chaotic Europe with Italian political volatility that has prevented it from making reforms and has entered a stagnant economy, a Spain paralyzed by the demands for independence that have stressed politics and that joined Belgium in its inability to form the Government, or the United Kingdom, which has dynamited the process of unification under the umbrella of the European Union.
Of the four governments chaired by Merkel, three have gone hand in hand with the SPD. This preference for “big coalitions” has been used to prevent fragmentation and political extremes from influencing Germany.. In particular, they have sought to corner Alternative for Germany, which represents the extreme right and is the opposition of the current government.
The greatest success of this coalition has been the budgetary stability of the country. After the great crisis of 2007-2008, the public accounts were subjected to a high deficit that shot up public debt to 83% of GDP in 2010. Since then and until the coronavirus crisis, the ratio declined thanks to a combination of growth and budgetary stability with fiscal surpluses.
However, the German locomotive seems to be no longer what it used to be, because quarterly growth since mid-2018 has averaged a weak 0.1%. The truth is that we have not seen far-reaching reforms in its economy in its mandate (the last major reform was in the labor market and the welfare of Gerhard Schröder).
One of the problems of Germany (and extending to Europe) is that it is anchoring in the Old Economy. In the middle of the technological revolution, it only has one well-positioned company, SAPAs a result, the technological advantage that Germany led to dominance in the 20th century world markets for automobiles, chemicals and other manufacturing sectors is being lost and Merkel’s governments have not created a favorable environment.
With that model, the German economy has slowed sharply, its dependence on industry is high and its automotive sector is slow to adopt new technologies. Germany’s dependence on exports makes it vulnerable to a slowdown in global growth.
Merkel’s vision of austerity has mutated
On the part of the chancellor, there has been an ideological evolution in how to face the crises that plague Europe. If we contextualize the sovereign debt crisis the rescued countries, faced the dreaded word austerity since, under the shadow of the troika, they must have adjust their public accounts to guarantee the money of their rescuers, including the money of the Germans.
Under Merkel’s mandate, budgetary stability had been defended by fire since it was part of the essence of Germany and, even, it was written in its constitution that it should not increase the burden of its debt.
With this vision, Germany often opposed grand plans for European integration. However, his political focus has now changed with the Covid-19 crisis, mutating towards a much more flexible vision which began to be forged with the agreement with Macron that opened the doors to the idea that a large-scale debt program at the EU level was possible (and desirable).
This German position led to a bankruptcy of northern politics, the so-called frugal four -Austria, Denmark, Holland and Sweden- they were left alone in their misgivings that its solvency in the rating will be used to finance those most affected by the crisis.
Merkel and Brexit
Since the UK decided to leave the EU in 2016, negotiations have been embarked upon in which Merkel has played a prominent role as the Union’s first economy. His vision has always been to seek an orderly exit with an agreement that will not harm Europe..
Especially Merkel’s role gained importance in 2020 as Germany held the rotating EU presence. This year was key because the UK officially left the EU on January 31But it remained part of the structure of the 27-country bloc during an 11-month transition as the two sides tried to negotiate a new free trade agreement.
This agreement was reached in the final section of December 2020 and does not represent a complete break with the UK since, for example, Northern Ireland will continue to comply with many of the EU rules to prevent the hardening of its border with Ireland. This was one of the key points for Merkel. However, this will mean that new controls will be introduced on goods entering Northern Ireland from the rest of the UK.
In addition, it has been achieved that there are no new taxes to pay at the borderBut there will be new procedures and this means that there could be a series of delays in the traffic of goods between the economic blocks.
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