The ultimate test for Merkel’s ‘muddle through’ model

The ultimate test for Merkel’s ‘muddle through’ model

Note from Berlin


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Merkel has shown little appetite for the “vision-thing”, but the Greek crisis threatens to push the Chancellor out of her comfort zone

After a decade in office, German Chancellor Angela Merkel will find little time to enjoy her anniversary. She is challenged by crises, which not only test her ability to secure the German and European interest, but which also challenge her preference and practice of leadership.

Only two of her predecessors have served longer at the helm of German politics, Konrad Adenauer and Helmut Kohl, and both have been towering figures. Merkel has risen to that league as a character very different from both, the first woman and the first East German leading the German government.

What is more, her leadership style is the opposite of those of Adenauer and Kohl. Both held strong long-term views about Germany’s place and role in Europe, which they were determined to advance even against the tide of their times. Adenauer pushed through integration into the West and the build-up of German armed forces under the auspices of NATO. Kohl re-energised European integration, secured consensus on the single market programme and overcame German reluctance on European Economic and Monetary Union.

Merkel has shown little appetite for the “vision-thing”, she seems to be thoroughly pragmatic, focusing always on the next step

Merkel has shown little appetite for the “vision-thing”, she seems to be thoroughly pragmatic, focusing always on the next step. Watching her operate is to see ‘muddling through’ elevated to a political virtue, albeit one based on principles. She appears to strongly believe in rules and process norms, and within this framework Merkel seeks to arrive at outcomes through interaction among states, moderated by such rules and norms and herself. Her European credo, laid out in a speech to students at the European College of Bruges in November 2010, is built on two pillars. First, the recognition of the EU as a common political, legal and procedural space, and second, the readiness of all EU members to take on their responsibilities at home under the jointly defined goals.

This approach has shaped the EU-side of Merkel’s chancellorship from the beginning. Negotiating the EU’s midterm financial framework was her introduction to Brussels bargaining, and has educated her partners in the European Council about her leadership style. Given the requirement of unanimity, German consent was no more essential to finding agreement than that of others. Merkel’s mix of withholding consent and tirelessly pressing for agreement while keeping the process going, however, contrasted with the pervasive power of Kohl’s willingness to bring in additional funding to get a deal or the veto impact of Schröder’s insistence on the German interest. In their own way, all of them used the relative fiscal and economic weight of Germany – a clear indication of the root of Germany’s lead role, especially when combined with prior Franco-German agreement on the issue at hand.

Her one step at a time approach means that Merkel has no long-term agenda to be judged on. She does not entertain high-flying plans, which could be shot down by vetoes or referenda. But her risk is delivery on particular steps. Faced with rejection or failure, Helmut Kohl could take a different approach or try another attempt to move on towards his longer term goal. Merkel’s muddling, on the other hand, has to generate more immediate results – not the spectacular moves, but tangible outcomes. And in pursuing this, Merkel is cautious not to irritate or scare her own electorate, which she has defined as the German public at large, reaching beyond the voters of her own party. This approach to EU policy has raised her reputation in Germany well beyond the popularity ratings of her government. The public seems to trust her enough to accept that the Eurozone has significantly deepened its instruments and its governance in the response to the sovereign debt crisis.

Tsipras has not just tried to negotiate the best outcome for Greece, something Merkel could handle. Rather, he has launched an attack on the foundations of the Chancellor’s policy

By the same standards, Angela Merkel now faces a serious challenge to her policy. In contrast to his predecessors in office, Prime Minister Alexis Tsipras has not just tried to negotiate the best outcome for Greece, something Merkel could handle. Rather, he has launched an attack on the foundations of the Chancellor’s policy: the rules of the game and the responsibility of national governments for implementing commitments. Tsipras put a different vision for Europe against her vision-less logic of problem-solving; he rejected the linkage between domestic performance and financial support, and he polarised where she was seeking to integrate.

After the referendum in Greece, the Chancellor’s dilemma is this: the current crisis prompts her to choose between two unwelcome alternatives. Either she succeeds in getting a deeper commitment for reform from Greece in return for more financial assistance, which will take a “Kohl-moment” of leading the German people into a deal they don’t want. Or, she will have to watch the disruption of the Eurozone if no agreement is reached, creating a political demand for reinforced integration to counter further erosion.

Domestically, the support for further financial commitments to Greece is very low, not least because of the obvious mismatch of the “German” and the “Greek” approach. Around the 17 other Eurozone countries, the feelings are similar, if not stronger than in Germany. Merkel’s determination to do whatever it takes to maintain the integrity of the Eurozone and of the EU – the one belief that she has that comes closest to a “vision” for Europe – is not shared by several other Eurozone governments.

Because Greece evidently needs new financial support to avoid a collapse of its financial system and state, Merkel could only justify commitments on a “more for more” basis. She needs a stronger, more credible multi-year programme of reform presented and owned by the Greek government, best underpinned by a radically new approach of Athens to welcome technical support from EU member states, which would be coupled to a focused debt rescheduling agreement, dealing with the outstanding repayments of the next months. And even were it achieved, arguing for such a package in front of the German parliament will use up all of the credibility Merkel and her Minister of Finance, Wolfgang Schäuble, can offer. While it’s likely that the grand coalition government could muster up the required votes, she will be forced to damage the foundation of her previous success by setting her own party against her policy and she would be forced to push ahead with a policy that runs clearly against the preferences of the German public.

In these circumstances, Merkel could not approve anything short of such a radical turn-around by Tsipras. She probably wouldn’t have to as Eurogroup finance ministers would shoot it down before it could reach the level of heads of state and government. But should no agreement come about, however, Merkel would suffer a serious defeat. Her approach of pragmatic consensus building through exhaustive negotiations over the next steps would not have been able to achieve it goals. What is more, Greece could not sustain its participation in the common currency, with severe consequences for its people, requiring EU humanitarian rescue efforts while still deepening the political cleavages in Europe.

In this nightmare scenario, Angela Merkel would have to consider further steps that would go clearly against her preferences in order to protect her idea of European integration. The centrifugal forces triggered by the Greek drama will need an initiative to strengthen the inner circle of integration and may prompt the Chancellor to take a closer look at the ideas Schäuble has been pondering for quite some time, such as a common decision on member states budget ceilings, a Eurozone budget and/or Eurobonds, the introduction of state insolvency rules and procedures, a permanent governance structure, parliamentary scrutiny. Angela Merkel will embrace none of these voluntarily. Her entire political career has been devoted to avoiding such a potentially divisive debate about Europe’s purpose.

When the war in Ukraine escalated in January 2015, Merkel made a bold move to protect her preferences and rescue the option of a negotiated outcome. She could have failed badly, but she prevailed even though the agreement is fragile. Will she be able to do the same now? The constraints are high as will be the cost of failure. The task has become more difficult because of the previous major Greek crises. The Eurozone may be better prepared, but Angela Merkel is more exposed than ever.

The European Council on Foreign Relations does not take collective positions. This commentary, like all publications of the European Council on Foreign Relations, represents only the views of its authors.

Read more on: Note from Berlin, European Power, European Strategy, Economic Crisis, German foreign policy leadership

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