(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.
“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.
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