Bloomberg News

Merkel Seeks Mandate to Top Thatcher as Third-Term Risks Loom

September 19, 2013

Germany's Chancellor Angela Merkel

Angela Merkel, Germany's chancellor, has already made history as Germany’s first woman chancellor and the first who grew up in the ex-Communist East. Photographer: Chris Ratcliffe/Bloomberg

German Chancellor Angela Merkel is headed toward risky territory as she completes her second term.

Neither Margaret Thatcher nor Tony Blair made it through their third term. Even Helmut Kohl, the chancellor who presided over German reunification, overcame a party revolt before winning a third and fourth term.

Following elections in two days, Merkel, who polls show is Germany’s most popular politician, faces the perils of a third Greek bailout and the potential breakdown in her 550 billion-euro ($745 billion) energy overhaul. There’s also the inevitable succession fight and sniping over her legacy.

“A third term will be the hardest for Merkel,” Ulrich Sarcinelli, a political scientist at the University of Koblenz-Landau, said by phone. “Questions will arise about who becomes her heir-apparent and what her Christian Democratic Union stands for as a party. As soon as her approval ratings decline, she will also come under pressure within her party.”

Polls suggest the Sept. 22 election is Merkel’s to lose, with Germans trusting her leadership, backing her austerity-first response to Europe’s debt crisis and crediting her for economic gains. At campaign stops across the nation of 80.5 million, Merkel touts unemployment that fell to a two-decade low on her watch, progress toward a balanced budget and the euro’s advantages for Germany’s export-driven economy.

Merkel, 59, has already made history as Germany’s first woman chancellor and the first who grew up in the ex-Communist East. Re-election would give her the chance to beat Thatcher’s 11 years in power and Blair’s 10. Kohl made it through 16 years.

Accidential Politician

Merkel, a Lutheran pastor’s daughter who excelled in school, was working as a researcher in a state physics lab when East Germany opened its border to the West on Nov. 9, 1989. Soon after, she walked into the office of a pro-democracy group to help set up personal computers. Within months, she was deputy spokeswoman for East Germany’s first and last freely elected government, where she came to the attention of CDU envoys. When East and West Germany merged and Kohl won the first post-unity election, he gave her a cabinet post.

A political outsider, Merkel honed her ambition to succeed as an eastern woman in a party dominated by West German men. In one of her boldest moments, she broke with Kohl over a party financing scandal in 2000. When Thatcher died in April, Merkel eulogized her as an advocate of freedom for the former Soviet bloc and an example for women striving for elected office.

Merkel, whose second husband is a fellow scientist, allowed other personal glimpses during the campaign. At an event in May sponsored by “Brigitte,” a women’s magazine, she talked about unwinding “when I stir the pot on the stove” and how “nice eyes” make men attractive.

Mission Vision

Still missing is a Kohl-like vision for Germany and Europe. It’s a point criticized by Peer Steinbrueck, her Social Democratic challenger and first-term finance minister, who is running on a platform of higher taxes and social justice.

Lagging in the polls, he says Merkel simply refuses to spend political capital.

“All her predecessors in this office went for broke at some point and risked something,” he said at a rally in the western city of Wuppertal on Sept. 17. He cited Gerhard Schroeder, whose labor-market overhaul she freely credits with fixing the economy, and Kohl, who seized the opportunity of reunification.

“Was there ever a time when Merkel said she won’t just wait and observe and instead says: ‘I’m putting my chancellorship on the line,’” Steinbrueck said.

Energy Costs

Those moments may come during a third Merkel term. The energy overhaul, driven by subsidies for wind and solar power, has jacked up electricity prices for homes and industry, signaling a political and economic risk for Merkel.

The energy blueprint came after the Fukushima nuclear disaster in 2011 prompted her to reverse course and back a nuclear-free Germany. That aligned her with most voters.

Merkel says changing Germany’s renewable-energy law will be her first priority if she wins re-election. That still leaves the task of modernizing the power grid, a project she calls a matter of national pride, ingenuity and profit.

Also unfinished is the debt crisis and plans for a European banking union, where Germany has balked at calls by the European Commission and European Central Bank to set up a centralized system for winding down banks.

Both Merkel and Finance Minister Wolfgang Schaeuble acknowledged during the campaign that Greece may need a third bailout as early as next year.

Longevity Questioned

Bild, Germany’s most-read newspaper, reported in April that Merkel had told confidants that 10 years is the most a chancellor can stand, signaling she wouldn’t serve out her term if re-elected. She denied the report.

Numerous heirs-apparent, such as former Environment Minister Norbert Roettgen and Roland Koch, the former state premier of Hesse state who left politics to become chief executive officer of builder Bilfinger SE (GBF), have dropped out during Merkel’s 13 years as CDU head, felled by lost power struggles or scandal.

One possible successor is Labor Minister Ursula von der Leyen, a mother of seven who lived in the U.S. during the 1990s and irked Merkel by saying euro countries should put up gold as collateral for bailouts. Her father, Ernst Albrecht, was premier of Lower Saxony state. Others include Defense Minister Thomas de Maiziere, Merkel’s former chief of staff.

Merkel’s Legacy

After eight years in power, Merkel’s legacy includes her decision, hatched over months and announced almost off-hand in a radio interview, to stamp out talk of a Greek exit from the euro and avoid a breakup of the 17-nation currency. She abolished the draft, expanded day care and, taking up a classic Social Democratic theme, pushed through minimum-wage rules for temporary and construction workers.

While the Die Welt newspaper calls her the “Iron Chancellor,” Merkel is no Thatcher, differing from the “Iron Lady” in her mistrust of financial markets, her pick-and-choose approach to ties with the U.S. and preference for pragmatism over ideology. Kohl’s longevity suggests that Germans may prefer stability over change this year, too.

“Merkel’s weak point is the energy overhaul,” Sarcinelli said. “That could become the toughest test of a third term.”

To contact the reporters on this story: Tony Czuczka in Berlin at aczuczka@bloomberg.net; Arne Delfs in Berlin at adelfs@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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