Page 54 - Bloomberg Businessweek July 2018

◼ REMARKS Bloomberg Businessweek July 2, 2018

As Merkel’s Power Ebbs,

Europe’s Peril Grows

● The nativism that’s swept much of “the public mood might well support a politician who popped
Europe is threatening her in Germany, up and articulated this kind of position.”
The trigger for such a shift would be Merkel’s ouster.
with huge consequences for the EU She’s in the throes of the most serious threat to her chancel-
lorship in more than 12 years in office over her liberal stance
● By Alan Crawford on migration. If the forces arrayed against her manage to
bring her down—and they may try soon—they will demand
an about-face in policy. That would mean putting the inter-
ests of German voters first and those of European allies a
From her seventh-floor office in Berlin, Angela Merkel is sur- distant second. Euro area bailouts? No thanks. Solidarity on
rounded by uncomfortable relics of Germany’s 20th century immigration? No longer. Greater EU integration? Forget it.
history. To the east lies the Reichstag building, hollowed out Help for Greece? Don’t even go there.
by fire in 1933 in an act of arson the Nazis used as a pretext to Some in Merkel’s Christian Democratic Union never really 13
cement Adolf Hitler’s hold on power. Next door stands the reconciled themselves with a party leader who broke the
Swiss Embassy, one of the few buildings in the city center mold as both the first woman chancellor and the first from
to survive World War II almost intact. The line of the Berlin the former communist East. She lacked Helmut Kohl’s stat-
Wall marking the Cold War boundary with communist East ure and the party connections of Wolfgang Schäuble, Kohl’s
Germany is just to the north. heir apparent, who eventually served two terms as Merkel’s
The barbarity represented by those daily reminders has finance minister. Her management of the euro area debt
underpinned Germany’s you-first approach to neighbors and crisis did her no favors with her base, which grew increas-
allies since the federal republic was created in 1949. Germany ingly frustrated with each successive bailout package. Those
even gave up its fabled deutschmark, a totem of hard-earned same sentiments arose at the beginning of June with criti-
postwar affluence, to forge a monetary union and satisfy cism from her Bavarian sister party, the Christian Social
French and British fears over its post-reunification muscle. Union, of Merkel’s agreement with France to pursue a euro
Now all that risks being cast aside. Like many of its neigh- area budget, which would cede more control of Germans’
PHOTO ILLUSTRATION BY NEJC PRAH; PHOTOS: AP PHOTO; GETTY IMAGES, REUTERS, SHUTTERSTOCK
bors, Germany is threatening to turn inward. The new Italian tax dollars to Brussels.
government’s questionable commitment to the euro may be But it was her open-door policy during the refugee cri-
the current cause of consternation among European Union sis of 2015-16 that provided the accelerant to the sparks of
officials and investors—from Christine Lagarde, head of the dissent. Bavaria was on the front lines of the influx of more
International Monetary Fund, to Lloyd Blankfein, chief exec- than 1 million arrivals, prompting state leaders to push back
utive officer of Goldman Sachs Group Inc. But the real black against federal policy. Conservative voices grew emboldened
swan is Germany and the prospect of a yawning vacuum in after Merkel’s flabby showing in last year’s election. That vote
the 28-nation bloc. Don’t forget: Germany, which started the installed the anti-immigration Alternative for Germany (AfD)—
deadliest war in history, sits at the center of a continent that— one of whose leaders suggested shooting refugees at the bor-
barring the past three decades—has known little but conflict der as a last resort—as the largest opposition party.
and tumult for centuries. Merkel’s most vociferous antagonists look abroad with
“The rest of Europe would find, I fear, that this Germany envy. Over the border in Austria, Sebastian Kurz, who was 19
would engage in something much more like American when Merkel came to power in 2005, gained the chancel-
retrenchment. In other words, it would say, ‘What’s in it for lery last year in an alliance with the far-right Freedom Party.
us to be the guarantor of European unity and stability?’ ” says In Hungary, Viktor Orban’s brand of anti-immigrant popu-
Constanze Stelzenmueller, Robert Bosch senior fellow at the lism won him a resounding electoral victory this year. Italy’s
Brookings Institute in Washington. What’s more, she adds, populist Lega party entered government after extending