OPINION:The chancellor is bad for Europe and bad for Germany, where voters would be doing us all a favour if they kicked her out

‘A cluster of insignificant states under insignificant princelings”. That was one near-contemporaneous description of Germany of the 1850s. A little more than a decade later, after the power politics of the continent had been transformed by the unification of those states, it had become commonplace to speak of all diplomatic roads in Europe leading to Berlin.

The rapid rise of Germany at that juncture is reflected in our own times. A decade ago, Germany was derided as being part of “old Europe” and its economy written off as sclerotic – along with Italy and Portugal, it had been the slowest growing in Europe over the previous 10-year period.

But since the euro crisis erupted three years ago a sea change has taken place and derision has again turned to awe. Germany’s strong (if often exaggerated) rebound from the 2008-09 Great Recession, its low unemployment, high export levels and unindebted private sector have given the inhabitants of Europe’s largest economy a sense of prosperity, security and progress that few others in the rich world have enjoyed in recent years.

Compared to all the other (smaller) major economies in Europe – Britain, France, Italy and Spain – Germany has fewer weaknesses and faces fewer challenges.

This relative strength – and its long-term anchor role in European monetary affairs – has put Germany centre stage in redesigning the euro edifice, which is fundamentally flawed and will collapse without major change. As the crisis of the euro has dominated the continent’s politics for three years, all roads in European diplomacy have, once again, converged on Berlin.

But among the greatest differences between the 1870s and the 2010s has been leadership. Otto von Bismarck, newly unified Germany’s first chancellor, managed the challenges of his fast-changing country and continent with great creativity and constructive diplomacy.

‘Iron Chancellor’

He was the main architect of unification, was pragmatic when it came to putting in place the world’s first welfare state, granted universal male suffrage (despite being an unconvinced democrat) and his diplomacy remains the stuff of legend. The “Iron Chancellor” is rightly regarded as one of the finest statesmen Europe has produced.

His distant successor, Angela Merkel, has been very different. Her role in by far the greatest crisis in European Union history has been almost unrelentingly negative, in her rejection of proposals from others and in reluctantly agreeing to suggestions after much credibility-destroying delay. When Merkel has appeared to lead – as she did when calling for political union to ensure enhanced democratic accountability in the euro zone – little detail and no strategic vision emerge to suggest she is serious about taking bold action. And, in the starkest contrast of all with Bismarck, Merkel has built few if any durable alliances with other European leaders, thus presiding over her country’s dangerous isolation.

Among Merkel’s few innovations has been the fiscal treaty, aimed at embedding German budgetary procedures in the domestic policy frameworks of all EU member states. Though not at all a bad thing in its own right, it was never going to contribute much to solving this crisis and was more about providing Merkel with domestic political cover. Despite being accorded that cover by all other euro zone members, she did not use it.

Merkel’s minimalism and backsliding in dealing with the euro crisis cannot be explained by the domestic political environment. Unlike her counterparts in other creditor countries – Austria, Finland and the Netherlands – she faces no threat from opposition parties hostile to Europe generally and/or willing to exploit public disquiet about bailing out the periphery. On the contrary. The main opposition party, the Social Democrats, has advocated going further and faster in addressing the crisis.

Speaking at last December’s EU summit Merkel said: “You know me, I do things thoroughly and in a considered fashion.” This image, of a thoughtful and rigorous leader, has been carefully cultivated by the chancellor. But it is without substance. Quite apart from her handling of the euro crisis, some of the biggest decisions of her administration in crucial policy areas – energy, security and industry – show that Merkel is as willing as the most capricious politicians to make it up as she goes along.

Germans have long been divided over nuclear energy. This administration and its predecessor expended much time and effort in formulating a nuclear power strategy. But shortly after the Fukushima disaster in Japan in 2011 the chancellor binned her own plan to wind down the country’s nuclear industry. Some reactors were shut down there and then despite no threat of earthquakes or tsunamis in Germany. This reaction was knee jerk.

On Libya in 2011, Germany’s unexpected refusal to join her main allies in support of anti-Gadafy forces shocked the country’s allies. Again, the decision gave no appearance of having been thought through and merely added to the evidence provided by the euro crisis that Germany is still not ready to take on the responsibilities that come with great power.

Considered position

Yet another example came last year when Germany vetoed the merger of two leading European high-tech companies at the very last minute. For years the merging of EADS, the parent company of Airbus in which the German government holds a significant stake, and BAE systems, a British defence contractor, had been in the making. It was designed, among other things, to facilitate a reduction in wasteful defence expenditure across the continent. Even the British government, which wants less Europe in almost every other area, supported the tie-up.

If Berlin had had a considered position on the matter it would never have allowed the (German) boss of EADS formally to announce the merger. The manner in which Berlin shot it down after that announcement had been made not only undermines Merkel’s claims to rigorous decision making, but also raises yet more questions about whether she really believes in European solutions to the continent’s problems.

German voters have the opportunity to change their government in 2013. If Europe is to emerge from crisis, it is to be hoped that they choose a new chancellor. Angela Merkel is not working for Germany or for Europe.

* Dan O’Brien is Irish Times Economics Editor