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Like a tragic hero, Angela Merkel brought about the ruin of everything she sought to build. Her decision to throw open the borders of Europe to more than one million migrants without vetting has emboldened the forces of populism and Euroskepticism.

The word “inspiring” is overused when it comes to politicians’ life trajectories, but the upward arch of Merkel’s career certainly qualifies. From humble East German scholar, to key aide to Helmut Kohl, the formidable statesman who was instrumental in Germany’s reunification, to Germany’s paramount leader, seemingly invincible until she was recently forced to give up her post as head of Germany's ruling CDU party.

[Source: Washington Examiner Article 12/4/2018]
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Merkel’s intentions seem so holy and pure that the global commentariat has credited her with them fully, without paying attention to how much her actions have worked against those intentions. She is lauded for steering Europe through the Euro crisis, when in fact it was she who precipitated and deepened it.

Her decision to throw open the borders of Europe to more than one million migrants without vetting has emboldened the forces of populism and Euroskepticism. Without that fateful decision, it is hard to imagine that the people of the United Kingdom would have voted to leave the European Union.

Though the mystifying gyrations of the Brexit negotiation process are liable to inspire mirth or pity, it is hard to overstate the existential threat posed by Brexit to the European project over the longer term: for if the U.K. leaves the EU and ends up (more or less) fine, what is there to prevent some other country deciding it would do better outside?

Another paradox of Angela Merkel’s handling of the euro crisis: She is credited for defending European ideals, when her actual position throughout the crisis was a hard-nosed defense of narrowly-defined German interests at the expense of its neighbors.

Germans have a simple story for what happened. Germany undertook tough reforms, holding wages down and keeping government spending down, thereby becoming globally competitive. By enduring this pain, they built a resilient economy. Meanwhile, spendthrift Mediterraneans refused to take similarly tough steps, and when the 2008 Financial crisis hit, reaped what they had sown.

The problem is that no serious economist (or no serious economist living outside Germany, but I repeat myself) believes this. Germany’s 2000s “economic miracle” has a lot more to do with monetary policy. Berlin agreed to European monetary integration only if the new currency were artificially held down at a level that would bring no more inflation to Germany than the Deutschemark did.

This had a number of effects, good for Germany and a handful of small countries like Austria and the Netherlands, and bad for nearly everyone else. It made Germany’s exports competitive (making, say, France’s and Italy’s relatively less so) in markets like China and the United States (yes, President Trump has a point that Germany is not playing fair in global trade). It also enabled Germany to outsource much of the lower-value parts of its manufacturing to even-lower-currency East European countries, thereby keeping the highest-value parts of its industry at home — a nice trick if you can pull it off, and bully for them, but one that questions how, say, France or Spain could imitate the German “miracle” as they are urged to.

And finally, the euro caused a precipitous drop in interest rates all across the south of Europe. This was a nice trick too: all of a sudden, Southern Europeans could buy lots and lots of German-made cars and dishwashers. And if that also created a massive credit and housing bubble there, well, they found someone to blame for that, didn’t they? And if making those countries uncompetitive meant they would rack up deficits and debt, that would be their problem, wouldn’t it?

The point is that the euro acted as a massive subsidy to the German economy, funded by credit bubbles elsewhere in Europe. Little wonder, then, that Greece ended up poor and Germany rich. But who is to blame?

When it came out that the Greek government had cooked up its numbers and that its debts were much larger than anticipated, there was no need for this genuine crisis — and one in which feckless Greek governments and corrupt Greek bureaucrats and crony capitalists certainly have their share of blame — to provoke any contagion. Then came Merkel’s insistence that other European countries would not come to Greece’s aid, despite their sharing a currency.

Financial markets had always interpreted euro membership implicitly as a form of solidarity: Countries that shared a currency would of course help each other out in the case of a debt crisis, because to do otherwise would be economic suicide, right? Right.

A fairly standard debt crisis, of the type that typically causes a year or two of economic pain in just one country when well-handled, in one of Europe’s smallest economies, suddenly metastasized into a continent-wide financial meltdown. If Greece’s debts weren’t backed, whose was? Portugal? Spain? Italy?

France? And if France goes bankrupt, isn’t that the end of the euro? With no clear answer to any of these questions from Brussels or Berlin, skittish financial markets everywhere hit the panic button. With the EU economy roughly the size of the United States,’ the crisis further dragged down the world economy, already reeling from the 2008 financial crisis.

At every step, it was Angela Merkel, supposedly the brave stateswoman but in reality blindly following the dictates of German opinion polls and Bild, the country’s major tabloid, who made the crisis worse by adamantly stymieing efforts to bring clarity to the situation or to consent to anything that could be interpreted as asking German taxpayers to pay for something (even as Germany had profited off Southern Europe’s credit boom for a decade, you’ll recall).

As Queen Europe lectured Greeks on fiscal probity, youth unemployment reached unprecedented levels in the South of Europe, the continent was mired in crisis, the global economy weakened and populism arose everywhere. Alongside François Hollande, who ceded leadership of Europe to her by default, Angela Merkel bears more responsibility than anyone for the political economic devastation that has been shaking Europe since 2011.

It is easy to accuse Germans of hypocrisy when it comes to the euro crisis, but my experience with senior-level officials of the German government, including behind closed doors, suggests that they very sincerely believe their own self-serving story, which in a way is even more concerning.

There is a very famous scene in the French comedy “Le Grand Restaurant,” where Louis de Funes, the most talented French comic actor of the 20th century, plays a restaurant owner. While describing, in German, the recipe to his potato soufflé to a German patron, he moves into the shadow of an overhead lampshade, darkening his brow and his upper lip, getting more excited about his recipe as he does, making him look like Hitler delivering a speech. I have sat at international roundtables where perfectly-dressed, mildly-accented blond-haired German officials with doctorates ranted about the need for Greeks and Spaniards to learn discipline, with the non-Germans in attendance awkwardly shooting glances at each other, and each time it’s been hard not to think of that scene.

Whatever the case, it is certainly much harder to accuse Merkel of hypocrisy when it comes to the European migrant crisis. She walked into that mistake with full sincerity. Her infamous motto for her decision, “Wir Schaffen das!,” literally “We can do this,” but more accurately something like, “We can manage this” had no duplicity in it, merely hubris, the vice that causes the fall of all Greek tragic heroes.

Whatever the moral merits, in the abstract, for granting access to refugees from war-torn areas, this view in no way necessitates simply throwing open the German borders, and thereby Europe’s, since the Schengen Treaty mandates that all countries must honor each other’s decisions about who can come in. Most of the people who came in were not Syrian war refugees, but rather economic migrants from all over. The disregard for national security still baffles, several years later — a key perpetrator of the November 2015 Paris attacks came in via Greece on a forged Syrian passport.

No one still has a good idea how low-growth, stratified, aging Europe can absorb these migrants without deepening social strife.

Meanwhile, the political consequences are clear. Trying to save her political career, Merkel did a U-turn, merely staving off the inevitable by a year or two while relinquishing her claims to nobility. But populist movements all over Europe have gotten a major boost: the UK voted for Brexit; France’s Marine Le Pen came into the second round in France’s 2017 presidential election, getting the highest-ever score for her party.

Populists everywhere are on the rise — particularly in Germany, where the AfD, a once-niche far-right party, has successfully reinvented itself as a populist, immigration-restrictionist (but scrupulously color-blind) party.

The German political establishment, which Angela Merkel has dedicated her career to solidifying, whose politics she sought to apply to Europe as a whole, is more discredited than ever. Her party, the center-right CDU, and its traditional opponent, the center-right SPD, are more unpopular than they have ever been in Germany’s post-War history.

Angela Merkel is someone who it’s impossible not to be impressed by personally, and baffled by historically. She overcame incredible odds to rise to the top of German politics, and then endured for an astonishingly long time at the top of one of the world’s major democracies, making fools out of generations of pundits prognosticating her fall. And she did it all as a woman.

[Source: Washington Examiner Article 12/4/2018]
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Yet it cannot be escaped that she has worked very zealously and cleverly to destroy everything she sought to build up. In the end, the best that can be said for Angela Merkel is that she meant well.

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