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In Europe, All Eyes on Merkel, Captain of Crises

Europe is full of great expectations for the next six months as its most powerful politician, German Chancellor Angela Merkel, finds herself in a position to do what she's best known for: Fixing crises.

(CN) — Europe is full of great expectations for the next six months as its most powerful politician, German Chancellor Angela Merkel, finds herself in a position to do what she's best known for: Fixing crises.

On July 1, Germany took over the six-month rotating presidency of the European Council and in this role gets to set the agenda for the European Union until the end of the year at a moment of converging crises caused by the coronavirus pandemic and a changing world order dominated by rivalry between the United States and China.

After nearly 15 years as Germany's chancellor, Merkel, who turned 66 on Friday, is in the twilight of her political career after announcing she will not seek re-election in 2021. These next six months, then, are seen as Merkel's final act — her last rodeo — to both burnish her legacy as one of Europe's great political leaders and to lead the EU through a minefield of crises.

As both the leader of Europe's largest economy and head of the European Council presidency, her dossier is full of opportunity and peril: She's got Europe's economy to save from sinking into depression; bitter disputes between member states to iron out; a trade deal with post-Brexit United Kingdom to push through if possible by the end of the year; tricky negotiations about expanding the EU into the Balkans to oversee; an increasingly adversarial United States to contend with; critical decisions over how to deal with China awaiting her; and ongoing crises in Africa and the Middle East, from civil war in Libya to refugees, prone to explode.

Bracketing this crisis dossier, Merkel is being asked to take bold steps to further the EU's long-range goals of transitioning away from fossil fuels in keeping with the Paris climate agreement, push to make Europe a cutting-edge technology center on par with the U.S. and China and, if all of this was not enough, to better synchronize the EU as a political and economic union.

Friday saw her moment of truth arrive: For the first time since the coronavirus pandemic started, Europe's heads of state met for a crucial face-to-face summit in Brussels to try to find agreement over how to handle the crippling economic and political fallout from the coronavirus crisis. The EU's economy is expected to contract by about 10%.

Reaching consensus on an EU-wide recovery plan has been anything but easy for a bloc that includes such a diverse set of nations each with its own priorities, needs and political ambitions.

Merkel is pushing to get the European Council to approve a $856 billion fund that would allow EU member states to receive grants and loans to boost their economies. The funds would be backed by the EU as a whole.

But her backing the issuance of common EU debt — a major pivot for a debt-wary German nation – has been met with resistance from four other rich northern countries, led by the Netherlands, who say they are unwilling to guarantee loans to debt-ridden southern countries. These northern countries, known as the “frugal four,” argue they should not be asked to help bail out heavily indebted nations like Italy, Spain and Greece. The problem, though, is that Italy's financial woes could worsen unless it receives EU-backed grants and loans, plunging the entire EU economy into free fall.

In her characteristically cautious and matter-of-fact way, Merkel was calm on Friday as she laid out the challenges ahead.

German Chancellor Angela Merkel, right, receives a gift from Portugal's Prime Minister Antonio Costa during a round table meeting at an EU summit in Brussels, Friday, July 17, 2020. Leaders from 27 European Union nations meet face-to-face on Friday for the first time since February, despite the dangers of the coronavirus pandemic, to assess an overall budget and recovery package spread over seven years estimated at some 1.75 trillion to 1.85 trillion euros. (Stephanie Lecocq, Pool Photo via AP)

“We are going into the consultations with a lot of vigor, but I must also say that the differences are still very, very large and I cannot, therefore, predict whether we will be able to reach an agreement this time,” she said after arriving at the Europa building, the space-age headquarters housing the European Council.


She smiled meekly and entered the building, where Europe's 27 national leaders at long last convened to discuss in person how to move the European project forward.

Video of the roundtable meeting saw European leaders greeting each other without the usual hand shaking, back slapping and cheek kissing seen at such summits. Instead, each leader wore a mask and took to greeting each other with bumped elbows and bows. French President Emmanuel Macron was seen clasping his hands in prayer as a salute.

The European Council is scheduled to continue its summit on Saturday and possibly Sunday. If a deal on the recovery fund can't be reached, the council, which is made up of EU heads of state, may meet for another summit at the end of July. Merkel has stressed the recovery fund needs to be approved before the end of summer because individuals and businesses are desperate for help.

Merkel is not just Europe's most powerful leader: She's also riding high at the moment after being praised for her steady leadership during the coronavirus crisis. Germany is seen as a success story, having limited coronavirus infections and deaths. So far, Germany has reported 9,157 deaths linked to Covid-19, far fewer than many other European countries, and about 202,000 infections.

Merkel started out as a scientist before getting involved in politics with the fall of the Berlin Wall and her science background is seen as part of the reason for her good leadership during this health crisis.

Prior to the pandemic, Merkel's star was dimming and she was in danger of watching her final months in the chancellery fizzle away without much success.

Domestically, her mainstream conservatives were losing electoral support across Germany and her party, the Christian Democratic Union, was in a heated contest to find her successor. Within European politics, her influence too was waning and she seemed out-of-step with the direction the EU was headed.

Then the coronavirus crisis hit and Merkel redeemed herself – she once again proved herself a mature steadfast leader. Merkel has been at the forefront of previous crises in Europe, winning her both praise and criticism.

After the 2008 financial meltdown, she forced austerity on EU member state budgets, a move that economists say helped the EU weather the initial storm and save the euro currency but which over time has proven damaging to countries like Italy that need more fiscal flexibility.

In 2015, Merkel also was central in the EU's refugee crisis when hundreds of thousands of asylum seekers poured into Europe from Syria and other conflict zones. Merkel took a stand and welcomed refugees into Europe. Her humanitarian approach won her admirers but also helped spark an upswing of support for far-right politicians across Europe.

Still, she's seen by many in Europe as the leader best equipped to handle a crisis and she seems to have proven that again in recent months. In Germany, her approval ratings have rebounded and are now through the roof. She's regained the confidence of many in Europe who are relieved that the rotating presidency of the European Council happens to fall to Germany at such a critical moment. For weeks, she's been lavished with commentary and news articles praising her as “the queen of Europe” and the “captain of crises.”

“It has been several years since the idea of German leadership was popular among its allies and past enemies alike,” said Sudha David-Wild and Elisabeth Winter, analysts at the German Marshall Fund think tank, in a piece in Foreign Policy. “But in recent months, Germany seems to have taken up the leadership mantle once more. Its handling of the coronavirus pandemic has thus far been exemplary.”

Courthouse News reporter Cain Burdeau is based in the European Union.

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