Germany. Sedating, not leading
ABROAD and at home, a rising chorus is criticising Germany’s chancellor, Angela Merkel, for her economic policies. Her foreign detractors are frustrated by Germany’s quasi-fetishistic pursuit of “the black zero”, as Wolfgang Schäuble, her finance minister, calls the budget that he plans for next year—the first since 1969 to aim for balance. At the recent IMF/World Bank meetings in Washington, DC, he became increasingly defensive as one speaker after another blamed Germany’s austerity and huge current-account surplus for holding back the world economy. Germany should exploit record low interest rates and its peerless fiscal leeway to borrow and invest more, many argued. Other countries would do better to emulate Germany and save more, Mr Schäuble replied.
At home calls for more public investment are growing. But many German economists share Mrs Merkel’s desire to balance the budget, as do her centre-left Social Democrat (SPD) coalition partners. Domestic critics tend to be crosser about the soft-leftish policies that she, despite being leader of the centre-right Christian Democrats (CDU), is enacting with the enthusiastic support of the SPD. These include: pension increases for specific groups at the expense of future pensioners and in defiance of the country’s ageing population; a national minimum wage of €8.50 ($10.80) to take effect from January; rent controls in some cities; and a crazily expensive energy policy.
Taken together, these measures weaken Germany’s economy, said four of the country’s most respected economic think-tanks this month. They also lowered their expectations for economic growth. On October 14th the government followed suit, reducing its GDP growth forecast from 1.8% to 1.2% this year and from 2% to 1.3% in 2015. Even exports, usually the strongest part of Germany’s economy, are wobbling: in August they shrank by 5.8% from July, a bigger drop than can be explained by either the pattern of holidays or sanctions on Russia. Some economists reckon Germany may already be in recession, since GDP shrank in the second quarter and may well do so in the third. German business leaders are increasingly scathing about Mrs Merkel’s economic policies (see article).
And yet none of these criticisms seems to have trickled down to the German public. Jobs are plentiful as unemployment remains low. Mrs Merkel is still the country’s most popular politician. In a poll this month, 79% thought that she was doing a good job, a number that her American, British or French counterparts can only dream of. Even the opposition in parliament has been unable to parlay the criticism into effective rhetorical attacks. One reason is that this opposition consists of only two weak parties, the Greens and the post-communist Left, which together have a mere 20% of the seats.
But the bigger reason is Mrs Merkel’s style of governing and communicating. She lulls opponents and the public into passivity with soothing and often bureaucratic expressions that smother controversies, offend nobody and reassure everybody. Her German is “a rehearsed language, a numb and numbing language, whose function is to spread calm”, argues Dirk Kurbjuweit, author of “Alternativeless: Merkel, the Germans and the End of Politics”, one of several new books out this autumn that slam the chancellor but will not dent her popularity.
“Talking after Merkel in the Bundestag is the worst,” admits Anton Hofreiter, a parliamentary leader of the Greens. “The whole chamber is totally sedated and wondering what she has just said.” She does not attack individuals, so nobody hates her. Criticising her opinions is hard because she tends not to divulge them. In most debates “she stays silent, silent, silent, until it is clear which side will prevail. Then Merkel leaps so that it looks as though she had always been on that side,” says Mr Kurbjuweit. She constantly commissions opinion polls and usually heeds them.
Even those policies that look bold are, on closer inspection, opportunistic. Germans had been shifting against nuclear power for years when the Fukushima disaster in 2011 gave Mrs Merkel the opportunity to declare that Germany would shut its nuclear plants by 2022. That threw the entire energy market into chaos. Similarly, opinion had already moved against conscription when Mrs Merkel turned the army into a smaller and cheaper professional force in 2011. In many cases, the only serious opposition was within the CDU. This week some of its younger members, a group called CDU2017, demanded more economic reforms. But these voices are not a threat to Mrs Merkel, who has no credible internal rivals and dominates her party.
When Mrs Merkel does have to sell a policy to parliament and the public, she often presents it as “alternativeless”. She used this word to describe the rescue packages for Greece and other measures in the euro crisis. It was voted by a language jury the ugliest German neologism of 2010, and has sparked sarcastic resistance on the political fringes. The anti-euro party even took the ironic name Alternative for Germany. But Mrs Merkel’s message appeals to the German mainstream, which wants exactly her brand of centrist and non-confrontational politics, and indeed her.
Hence another paradox: Germany’s euro-zone partners see Mrs Merkel as endlessly haranguing them to reform, but Germans do not hear Mrs Merkel talking of reforms at home. She fears that Germans would not accept them even if they are needed (as in opening up services to competition or improving the tax system). Germany comes near-bottom in recent rankings of reforms by the OECD club of rich countries. That is troubling given its renewed economic weakness and its poor demographic prospects.
Most of Mrs Merkel’s predecessors stood for at least one big, controversial project. Konrad Adenauer after 1949 bound the new republic to the West at the cost of making reunification seem impossible. Willy Brandt recognised East Germany. Helmut Schmidt allowed American Pershing missiles in West Germany to deter a Soviet attack. Helmut Kohl made the Germans give up the D-mark for the euro. Gerhard Schröder liberalised the labour market.
Nobody in Germany today considers Angela Merkel capable of a similar level of leadership. Her power is immense but mainly potential. “She has not tried out how much power she has. For that she would have to dare to do something, to go against polls and the Zeitgeist,” concludes Mr Kurbjuweit. “In a certain way, Merkel is thus a powerless chancellor.” She uses her power to block, not to promote. It is power amassed but unused. If she goes on this way, that will be her main legacy.
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That’s part of the business model. It’s the same as hiring temps in industry or what they call “associates” at Wal-Mart, employees that aren’t owed benefits. It’s a part of a corporate business model designed to reduce labor costs and to increase labor servility. When universities become corporatized, as has been happening quite systematically over the last generation as part of the general neoliberal assault on the population, their business model means that what matters is the bottom line. The effective owners are the trustees (or the legislature, in the case of state universities), and they want to keep costs down and make sure that labor is docile and obedient. The way to do that is, essentially, temps. Just as the hiring of temps has gone way up in the neoliberal period, you’re getting the same phenomenon in the universities. The idea is to divide society into two groups. One group is sometimes called the “plutonomy” (a term used by Citibank when they were advising their investors on where to invest their funds), the top sector of wealth, globally but concentrated mostly in places like the United States. The other group, the rest of the population, is a “precariat,” living a precarious existence.
