I have been making the trip to the not so quaint town of Davos, Switzerland for over 10 years to attend the annual World Economic Forum, and 2012 was no exception. Once again, Mid-East peace was not achieved; global warming was not halted and the haves and have-nots were not reconciled. What was exceptional was the snow, which lay round about so deep and crisp and even that even good King Wenceslas would have quit the stuffy Conference Center and put on skis. What also stood out for me was the (re-)emergence of Germany as a key political and not just economic power.
To recognize the importance of Germany is hardly original. Last century the nation emerged from two world wars and one long divisive cold war as a modern industrial power. However, politically, in recognition and self-conscious of this painful past, Germany had tended to punch under its weight – in fact, pulling its punches. While the country still balks at military engagement given its past, Germany has been thrust on center stage by the Euro crisis. It is, at least economically, the last man standing. How fitting then that it is a woman who grew up in the former East Germany who is now leading the return to prominence of the united Germany. While she has attended past sessions of the WEF, she and her country always seemed to prefer to leave the spotlight to flashier players, including Sarkozy, Putin and Blair. In 2012 Chancellor Merkel and Germany could no longer duck their leading role.
Having not met her in person before, I was not sure what to expect of the Chancellor, having heard contrasting views expressed about her from "boring haus frau" to "the most impressive leader in Europe." I came away from a small group meeting with her more in the latter camp. She speaks simply and directly and with a conviction which appears genuine. Merkel made two key points concerning the role of Germany in Europe and its financial crisis. First, that the German nation had already contributed more than its fair share to preserve the Union and support its weakest members. Second, that it was not stinginess on the part of the German Volk which held the government back from just writing one large check to bail out Greece, but rather a well-reasoned economic policy aimed at securing the long-term fiscal health of Europe.
Chancellor Merkel's core point, more a pragmatic than a philosophical one, was that Germany would be doing Europe no longer-term favor if it simply trashed its strong credit rating to bail out its profligate neighbors. So, like the tough love that a parent shows in not bailing-out her irresponsible offspring after a late night, drunken joyride, so too must Germany preserve its firepower for the trial to come — not so much to teach a lesson as to retain the ability to support the family. She delivered these remarks in a matter-of-fact, non-lecturing manner, which already set her oratory apart from many of the politicians who flock to Davos.
Indeed, the German model deserves a greater following, not only for its economic soundness of preserving higher paying manufacturing jobs, but also for its related political focus on preserving a large, well-educated middle class. While the current Chancellor is now enjoying the political clout that accompanies a strong economy (viz., the Roman, British and American empires), it is her predecessor, Gerhard Schröder, who also deserves credit for having courageously pushed through his Agenda 2010 economic plan, including the unpopular Hartz I-IV labor reforms. I remember thinking at the time (2003) that such an elongated timetable lacked any great sense of urgency; however, Schröder's thanks from the German electorate for the policies which would eventually immunize it from the EU crisis was to be voted out of office in 2005. So while German politics may, as elsewhere, punish those who administer harsh medicine before the fever rises, it is difficult not to admire what the country has achieved over the last half century.
Upon my return from Davos to New York, I decided to put off the Mandarin lessons and learn German instead.