What’s Merkel doing with her lonely war on speculators?
Ordinarily, Angela Merkel is anything but a loose cannon. The German chancellor has endeared herself to a consensus-loving public at home over the last five years as the epitome of a safe pair of hands. There’s never been any of the fist-banging on tables or regular threats to resign like Germans grew accustomed to from her predecessor Gerhard Schroeder.
Merkel has managed to defuse and outfox a long line of powerful male Type A personalities with an uncanny combination of caution and a great sense of timing. Avoiding controversy and defusing problems are her modus operandi. But whenever there is a dispute that manages to surfaces in the public, one of Merkel’s favourite lines is: “It doesn’t make any sense to bang your head through a wall — because the wall will usually win.”
With her decision to fight speculators with a ban on some financial trades, it feels a bit like Merkel is now trying to bang her head through a wall. It is baffling on many counts — but especially because with a quick swoop of her pen she violated two key tenants of post-war German policy — do not act unilaterally and try not to annoy Germany’s allies. Germany, afterall, did enough on its own on those counts before 1945.
By acting unilaterally Germany has, in the words of some headline writers, made a fool of itself. “Germany embarasses itself with ban on market gamblers,” (Berlin blamiert sich mit Zockverbot) wrote The Financial Times Deutschland on Thursday. Yet others, such as the Handelsblatt, praised Merkel for finally showing some leadership. “Return of a chancellor,” (Rueckkehr einer Kanzlerin) Handelsblatt wrote. “The Greek debt crisis, the election and looming budget cuts leave Merkel no other choice — she’s showing leadership again, as the ban on naked short selling shows.”
So what’s going on with Merkel? Why has she suddenly unilaterally declared war on market speculators?
It’s worth keeping in mind her increasingly precarious position politically at home, as noted here in an analysis by Reuters’ Stephen Brown. German chancellors do not have as much power as often assumed — they are very much serving at the disposal of their parties, where the real power lies. Merkel has led the conservative Christian Democrats for 10 years now, in large part as a default candidate when a trio of powerful men neutralised and thus blocked each other. One of those three, Hesse state premier Roland Koch, has been openly challenging some of Merkel’s policies this week — an ominous signal of the trouble brewing for Merkel beneath the surface.
The grumbling about Merkel’s cautious leadership has long been audible among the rank and file of the CDU — though at a low volume as long as she kept the party in the chancellery. But the volume is rising now that the CDU lost control of Germany’s most populous state, North Rhine-Westphalia, earlier this month. An opinion poll this week showing support for Merkel’s centre-right coalition falling to a 10-year low has only added to the nervousness in the CDU, where thousands of jobs for elected officials at the local, state and federal level are at risk if the party isn’t able to arrest the slide. The poll showed her centre-right coalition at 38 percent, more than 10 percentage points below the 48.4 percent they won in the September election.
Merkel has evidently found a target that might help distract attention from the CDU’s tailspin — Spekulanten (market speculators). It sounds like an awful four-letter word — rather than just another four-syllable word — when German leaders utter the term Spekulanten. Over the last six decades Germans have developed a near-hysterical fear of inflation, instability and political turmoil — and that’s understandable considering those were among the ingredients that led to Hitler’s rise. In other words, Germans can be easily spooked.
And the Greek debt crisis has triggered fears that their currency and their lives could be hit by inflation, instability and political turmoil. Merkel, who until the Greek debt-crisis had not faced any major international crises in her five years in power, has in the eyes of many not done enough to meet the challenge.
As Nico Fried, a leading German columnist for the Sueddeutsche ZeitunSueddeutsche Zeitung, wrote: “The chancellor spoke in parliament about the dramatic fall in exchange rates and she meant the euro. But in Berlin it’s not only the weakness of the currency that’s causing problems — instead its the coalition. The value of the chancellor is falling as well.”