Analysis

Sixteen Years in Power: Merkel’s Successes and Failures

She governed Germany for sixteen years. This is her legacy.

Nick OttensNick Ottens
Angela Merkel
German chancellor Angela Merkel answers questions from reporters in Berlin, November 9, 2016 (Bundesregierung)

Angela Merkel is not seeking reelection on Sunday after ruling Germany for sixteen years. (She remains chancellor until a new government is formed.)

Here is an overview of the most important policies of her four governments — and her biggest failures.

Merkel I (2005-09)

“Grand coalition” of Merkel’s center-right Christian Democrats and center-left Social Democrats:

  • Expanded parental leave.
  • Replaced childcare benefits with a parental allowance.
  • Raised sales tax and taxes on high incomes.
  • Raised the retirement age to 67.
  • Tripled places at daycare centers.
  • “Cash for clunkers” scheme with a maximum €2,500 subsidy for replacing old cars.

Merkel II (2009-13)

Center-right coalition of Christian Democrats and liberal Free Democrats:

  • Agreed to EU bailouts of Greece, Ireland and Portugal.
  • Blocked eurobonds.
  • Ended conscription.
  • Increased parental allowance.
  • Phased out nuclear power.

Merkel III (2013-18)

Grand coalition of Christian Democrats and Social Democrats:

  • Allowed a free vote on marriage equality, which passed with the support of progressive Christian Democrats and left-wing parties.
  • Allowed early retirement after 45 years of work.
  • Banned the burqa and other face-covering clothes in the public sector.
  • Banned fracking.
  • Introduced a national minimum wage of €8.50 per hour.
  • Limited rent increases to 10 percent above the local average.
  • Mandated 40 to 45 percent green energy by 2025.
  • Opened Germany’s borders to more than one million refugees from the Middle East. Backlash catapulted the far-right Alternative for Germany into parliament in 2017.
  • Restricted temporary work contracts to eighteen months.

Merkel IV (2018-21)

Grand coalition of Christian Democrats and Social Democrats:

  • Agreed to give the eurozone its own budget.
  • Agreed to a €750 billion coronavirus recovery fund, partly financed by EU-issued debts.
  • Capped immigration at 180-220,000 per year.
  • Legislated to end greenhouse gas emissions by 2045, five years ahead of the EU’s schedule.
  • Fixed state pensions at 48 percent of lifetime earnings.
  • Phased out coal power.
  • Raised health insurance contributions for employers.

Failures

  • Bureaucracy: The World Economic Forum downgraded Germany from third to seventh place in its competitiveness index during Merkel’s time in power. Capital requirements and regulatory discrepancies between Germany’s sixteen states make it more difficult to start a business than in neighboring Denmark or the Netherlands. Merkel tried to convince states to harmonize regulations, but failed.
  • China: China became Germany’s largest trading partner under Merkel. It is the top market of German automakers and a major buyer of German industrial goods. Merkel blocked EU tariffs for unfair Chinese trade practices. Now Germans recognize they have become too dependent on a country that doesn’t respect human rights nor liberal trade rules.
  • Defense: Merkel leaves the German military underfunded and barely combat-ready. Not one of Germany’s six submarines is able to leave port. Fewer than half of the Bundeswehr‘s 244 combat tanks are operational. Munitions and spare parts are lacking.
  • Digitalization: Germany’s 4G mobile network is one of the worst in Europe. Health authorities relied on fax during the pandemic. Home-schooling and -working were handicapped by a lack of computers and absence of high-speed Internet. Half of German schools don’t have Wi-Fi.
  • Energy: Phasing out nuclear power increased Germany’s reliance on dirtier coal and imported Russian gas, slowing its transition to clean energy and making it harder for Merkel to stand up to Vladimir Putin.
  • Infrastructure: German infrastructure spending, under 3 percent of GDP, is low by rich-country standards. Germany has been slow to transition to electric cars. It has just 45,000 charging points compared to 67,000 in the Netherlands, which has one-fifth the population. Just one in five travelers between Berlin and Munich take the train. Germany’s high-speed rail network ranks below France and Spain.
  • Pensions: The German population is projected to shrink from 83 to 74 million by 2060. There would be eleven million fewer Germans of working age by then, but five million more retirees. Merkel raised pension contributions from employers and workers, and raised the retirement age, but the system is still not future-proof.
  • Russia: Germany gets 40 percent of its gas from Russia. The share will increase as a result of the Netherlands shutting down production in Groningen and Merkel phasing out coal and nuclear. She resisted pressure from in- and outside Germany to pull the plug on Nord Stream 2, an expansion of the Baltic Sea pipeline that allows Russia to circumvent transit nations in Eastern Europe, including Poland and Ukraine. She denied NATO membership to Ukraine. Franco-German diplomacy failed to convince Putin to withdraw from the Crimean Peninsula, which remains under Russian occupation.