The Federal Republic of Germany held its parliamentary election on 26th September 2021. The Social Democrats (SPD) formed a coalition with the Free Democratic Party (FDP) and the environmentalists The Greens, making Olaf Scholz the new Chancellor of Germany. These elections were highly anticipated as they marked the end of the tenure of Germany’s second longest serving Chancellor - Dr. Angela Merkel. Angela Merkel’s tenure as the Chancellor has seen waves of crises in the European Union (EU) and Germany, which demonstrated her leadership qualities and made her one of the most important leaders in the EU. In a survey published by the Pew Research Center in September 2021 on “Internationally, Germany and Merkel Viewed Favorably in Chancellor's Last Year in Office.”,1 Chancellor Merkel received the highest confidence rating as compared to global leaders of the US, China, Russia and France. Almost 77% of the people surveyed showed confidence in her to drive the world in the right direction. Therefore, it is important to understand and analyse her tenures which made her one of the most popular leaders in Germany as well as at the international level. Although her tenure saw challenges such as the Great Recession of 2008, debt crisis in the EU, strong opposition of international as well as domestic actors against the Nord Stream 2 gas pipeline, and the Refugee crisis, this paper looks at two major policy decisions taken by Chancellor Merkel which exhibit her consensus building style of politics at European and German level. These events are the Eurozone crisis (2009), and the Refugee crisis (2015). The paper aims to present a lookback on these policies and analyses Angela Merkel’s Chancellorship.
The Eurozone Crisis (2009)
The Stability and Growth Pact (SGP) is a “set of rules designed to ensure that countries in the EU pursue sound public finances and coordinate their fiscal policies.”2 According to SGP, a state’s budget deficit cannot exceed 3% of GDP and national debt cannot surpass 60% of GDP. The Eurozone Crisis of 2009 began with Greece, Ireland, Portugal, Spain and Italy surpassing their public spending limit assigned by the SGP. This resulted in accumulation of huge sovereign debt. Debt to GDP ratio for these countries by the end of 2009 was as follows: Greece - 126.8%; Ireland - 61.5%; Portugal - 87.8%; Spain - 54.02%; Italy - 116.6%.3 The crisis impacted all the countries (19 out of 27) of the Eurozone.
How did Chancellor Merkel manage the Eurozone crisis?
As the Eurozone financial crisis became apparent, Chancellor Merkel in early 2010 rejected providing German funds to bailout packages for debt ridden economies. In an interview to ARD (Arbeitsgemeinschaft der öffentlich-rechtlichen Rundfunkanstalten der Bundesrepublik Deutschland), a German public news broadcaster, she said "there is absolutely no question of it" adding that, “We have a [European] treaty under which there is no possibility of paying to bailout states in difficulty,”. Thus, Germany, as an initial measure to deal with the crisis, along with fellow eurozone members such as the Netherlands, pushed Greece, Spain, and the Irish Republic to reduce their tax deficits.
However, as the crisis unfolded, “the EU, European Central Bank, and IMF officials agreed that an uncontrolled default could trigger a major crisis”4 This was when Chancellor Merkel agreed upon a stability package of 500billion Euros.5 The rationale presented by the Chancellor for this agreement was that “We are protecting the money in German pockets”.6Linked together by a common currency, it was seen as a German initiative to work towards the stability of the Euro.7 Chancellor Merkel in a statement justifying the agreement at the German Parliament in 2011 said, “Today, Europe is looking towards Germany. Without us, there will be no decision,”.8 With this, she proposed to assist Greece in exchange of strict austerity measures, and involved the International Monetary Fund (IMF) as co-financier due to its experience in financial stability matters.
Negotiations at the European level
Apart from the bailout package, Chancellor Merkel focused on reforming the European fiscal policy mechanism which became a point of criticism by EU members. In the same speech of 2011, she pressed upon the importance of securing the stability of the Euro in the long term. These long-term goals meant reforming the EU rules on fiscal policies and averting the risk of a future financial crisis. Chancellor Merkel suggested that the EU must monitor national budgets to avert future debt crises. However, she had to compromise on her demand of stripping the voting rights in the Council of Ministers of the countries that break deficit rules,9 which the European leaders including the European Commission President Jose Manuel Barroso had termed as “unacceptable’.10 The agreed upon reforms came to be known as the European Stability Mechanism (ESM) and the Fiscal Compact rule.11
As a reaction to deal with the crisis, Chancellor Merkel initiated Eurozone fiscal reforms, for which she had to build consensus amongst Eurozone member states. Consensus-building was a long process consisting of discussions and deliberations. The Chancellor in one of her speeches to the German Parliament said that Europe, in finding a solution to the crisis, was running a ‘marathon’ and ‘not a quick sprint’.12 She was often criticised for this slow approach towards the crisis by some of the EU leaders, such as the former Polish Foreign Minister, Radoslaw Sikorski, who said there was ‘inactivity’ on German part .13
Negotiations at domestic level
During the Eurozone Crisis, Chancellor Merkel’s consensus-building style of politics was also visible at domestic level. Her initial decision-making was influenced by the German public opinion which, along with the Federal Constitutional Court (FCC) and the Bundesbank, was reluctant to commit to money lending. The FCC, in this regard, brought up the relevance of the Basic Law which limits the absolute integration of Germany into the EU, fearing loss of democratic powers of the federal government.14 Hence, Germany’s Eurozone diplomacy depended on Bundstag’s voting and agreements. A similar stance was exhibited by the Bundesbank that opposed further monetary assistance post-first bailout packages in 2010 to Greece, Ireland and Portugal. Similarly, almost 40% of the Germans were of the opinion that Germany should not directly help the debtor countries15 and was reluctant to lend more money to the southern European nations.16 Some of the Chancellor Merkel’s efforts to address these issues included austerity measures, asking other Eurozone countries to contribute to the European Stability Mechanism (ESM), bringing in the European Central Bank (ECB) and the IMF as co-financiers, thus relieving Germany from some of the money lending burden. She was gradually successful in pursuing the policies with the argument that “If the Euro fails, Europe fails”, thereby convincing the German public and institutions.17
Angela Merkel being the leader of the biggest economy of Europe played an indispensable role during the Eurozone crisis. In order to find a solution, she had to work on two levels i.e.,at the European and at the national level. Her consensus-building style of politics at the EU level called for efforts to convince the EU Member States to come up with fiscal reforms in the Union. Likewise, at the German level, she had to keep the institutions and the general public on the same page in order to monetarily help the debtor states.
The Refugee Crisis (2015)
In the wake of the Syrian crisis in 2015, Germany opened up its borders for the migrants entering Europe. This led to an influx of around 476,649 refugees in Germany in the same year, making it one of the biggest challenges for the Merkel government.18 According to a 2015 United Nations High Commissioner for Refugees (UNHCR) report, 1 million refugees entered Europe in 2015, half of which came from Syria.19 Angela Merkel welcomed the refugees onboard with her ‘open-door migrant policy’. She urged the German public to welcome the distressed migrants and see this crisis as an “opportunity for tomorrow” signaling that “countries have always benefited from immigration, economically and socially.” 20 In her New Year’s address to the Nation on 31st December 2015, she said that it will take “time, strength and money” to integrate the migrants into the society but “Wir schaffen ‘es” - we will do it.21Thus, the open-door policy was built on humanitarian grounds, solidarity for the refugees.”22
Getting EU Member States on the same page
The influx of refugees into Europe brought along criticism from European as well as German leaders. The Hungarian Prime Minister Viktor Orban, reacting to the German stand, criticised migration in Europe with statements like, “Migration is Poison” and “You wanted migrants, we didn’t”.23 Likewise, the opposition to migrants gave rise to Germany’s right-wing party, Alternative fuer Deutschland, which opposed migration from the Arab world saying Germany was being “Islamified”.24
Due to reluctance of other EU Member States to accept more asylum seekers and with rising crime cases in Germany and Europe (attack in Cologne on New Year’s Eve 2016 and Ansbach bombing by ISIS in 2016), Chancellor Merkel was compelled to reevaluate her migration policy.25 Reaction to escalating security issues and disagreements amongst the Union members included the conclusion of, EU-Turkey Statement and Action Plan 2016, and the 2018 EU deal on migrants.26 Both the deals saw Chancellor Merkel evolve her stance from her initial open door policy to building a common consensus with the EU leaders. This consensus was visible in the 2016 deal which was to filter out irregular asylum seekers coming from West Asian countries, especially Syria, at the European border and send them back to Turkey, in return of which, the EU agreed to pay Turkey €6 billion ($6.6 billion) in financial aid to assist the refugees entering Turkey.27 Turkey was chosen for this, as it acts as a buffer zone between Europe and West Asia. Similarly, the 2018 deal was about implementation of stricter laws for asylum applicants who wished to enter the EU, some of which included, screening migrants for their eligibility to apply for asylum before they reach the EU, stronger internal checks to stop asylum seekers from freely choosing an EU country in which to apply for asylum.28 These were the efforts put towards creating a common European mechanism to deal with the refugee crisis. However, this has been achieved only partially because of diverging opinions within the Member States.
Angela Merkel’s compromise and consensus-building style of handling the issue was on display at the domestic level too. While her open-door policy was highly criticised by her opponents in the right-wing, especially the Alternative fuer Deutschland (AfD), even the allies within her own party demanded stricter border controls to stop the flow of migrants into Germany. Horst Seehofer, head of the state of Bavaria and leader of the Christian Social Union (CSU), the Bavarian sister party to conservative Christian Democratic Union (CDU) said that CSU will start turning people away on the Bavarian border if a solution at EU level was not achieved.29 The Chancellor, however, did not agree to his demand of unilateral rejection of the refugees at the border. She said “Unilateral rejections [of asylum-seekers] would in our opinion be the wrong signal for our European partners,” alluding to the 2018 EU deal on migrants which called for stricter laws rather than complete rejection of the migrants. In view of the disagreements within her coalition government, Chancellor Merkel chalked out a compromise deal for migrants coming to Germany. The deal included establishment of transit centers on the German-Austrian border for migrants whose asylum procedures were under review in other EU countries. Transit of such migrants was to be done through an administrative agreement between Germany and the concerned EU country. The deal also said that in cases where such agreements are not achieved with the concerned countries, the migrants will be sent back.30 The Chancellor said the deal was “a really good compromise after a hard struggle”.31
Germany, under Chancellor Merkel, was the first European country to open its borders for migrants. The Refugee crisis became one of the pivotal events in Chancellor Merkel’s tenure. The crisis affected not just Germany but also the other EU member states thus making a common mechanism to deal with it desirable. Owing to difference in opinion over migration, keeping the EU member states on the same page over migrant policy proved to be a difficult task. Chancellor Merkel went through many discussions in EU summits to create a consensus over the issue of migration, which partially materialised, but as a complete framework has not been achieved yet. Similarly, at the German level the Chancellor had to take into account the coalition politics and opinion of the German public, 60% of which wanted a cap on refugees.32 To address this, she altered the open door policy to implement stricter laws at the German border and assured the public that those involved in criminal activities would be deported and denied asylum in Germany.33
Weeks before she stepped down as the Chancellor, Angela Merkel, in a 2021 interview with DW, was asked about the greatest challenges she faced in her tenure. Her answer to the question was the Refugee Crisis and bringing countries together to solve any issue, which was reflected in the Eurozone Crisis34The aforementioned crises in the paper demonstrate what the Chancellor regards as two of her biggest challenges. The Eurozone crisis made her to bring the EU leaders to build a common consensus over EU fiscal reforms, which she regarded as the best possible solution for that time, to avert future financial crises in the EU. She also had to convince the reluctant Federal Constitutional Court (FCC), the Bundesbank and the German public to help the debtor states by saying that it was Germany’s responsibility to help those countries and not let the Euro fail. Likewise, the Refugee crisis, highlights the Chancellor altering her policy decisions in order to build consensus over a common migrant policy at the EU level, although not fully achieved, it provided some way forward to deal with migrants at the border. Domestically too, she had to keep the allies and the opposition on the same page by implementation of stricter laws for migrants. In conclusion, the two crises bring forward Chancellor Merkel’s style of managing the issue at hand with consultations, consensus and compromise.
*Akanksha Thakur, Research Intern, Indian Council of World Affairs, New Delhi
Disclaimer: Views Expressed are Personal.