Merkel's Legacy Hangs in the Balance as EU Summit Nears

Strategic Insights -

Angela Merkel, nine months before she exits the political stage, faces a critical EU summit that will define her legacy. Germany's six-month EU presidency is ending amidst unprecedented challenges, including the pandemic-induced economic crisis, contentious Brexit talks, and a rule-of-law dispute between Hungary and Poland. This row threatens the €1.8tn EU budget and recovery fund, a key achievement of Merkel's time as chancellor.

Key Takeaways:

  • The EU summit this week could end up defining Merkel's legacy, with her presidency's main achievement, the €1.8tn EU budget and recovery fund, hanging by a thread due to Hungary and Poland's objections over the rule-of-law provision.
  • Merkel's mantra of finding compromise has been compromised by Hungary and Poland's threats of veto, with some arguing she should have stood up to them earlier.
  • The potential veto would have far-reaching consequences, including derailing climate discussions and jeopardizing a Brexit trade deal.
  • Germany and Europe are entering a post-Merkel era, and the outcome of this summit will set the tone for her legacy.
  • Merkel had high hopes for her presidency, but despite efforts, the pandemic has put an enormous strain on the agenda.
  • Diplomats fear the presidency could end in failure, harming Merkel's reputation just months before the Bundestag elections.

Statistics:

  • €1.8tn: The amount of the proposed EU budget and recovery fund.
  • 55%: The EU's emissions target by 2030.
  • 27: The number of member states in the EU.
  • 25: The number of EU member states supporting the rule-of-law mechanism.
  • 16 years: Merkel's tenure as German Chancellor.
  • 6 months: Germany's EU presidency duration.

Sources:

  • "This was to be the main legacy of the German presidency and, perhaps, the pinnacle of Merkel's time as chancellor," said Jana Puglierin, head of the Berlin office of the European Council on Foreign Relations. [Source: European Council on Foreign Relations]
  • "Merkel is all about patiently, doggedly searching for compromises," said Josef Janning of the German Council on Foreign Relations. [Source: German Council on Foreign Relations]
  • "Not agreeing on the MFF ... endangers reaching the very urgent and necessary conclusions on climate," warned one diplomat. [Source: Anonymous EU official]
  • "It would be the proof that her time is over," said Mr. Janning. [Source: Josef Janning, German Council on Foreign Relations]
  • "Everyone said, 'Here comes Merkel, she'll solve all Europe's problems'. But it was clear from the start that would be hard to achieve," said Manfred Weber, head of the centre-right European People's party group in the European Parliament. [Source: European People's Party]
  • "The services sector is likely to contract in the fourth quarter, but it now looks as if the economy will expand slightly, whereas we expect GDP to fall in the other large eurozone countries," said Andrew Kenningham at Capital Economics. [Source: Capital Economics]