Neither of those are good outcomes, and Merkel knows it. She is understandably concerned about protecting her own citizens—especially with an election on the horizon—while remaining aware of her responsibility to both the euro zone and the world. Germany is the lone country on the continent in a position to salvage Europe’s economy. As Peter Coy wrote in Bloomberg BusinessWeek’s recent cover story on Merkel, “it’s only a slight exaggeration to say that the fate of the world is in one woman’s hands.”
But while any leader might worry that it’s bad leadership to make decisions that put his or her own citizens in a worse financial position, it’s just as big of a leadership problem to have power and not use it. That’s the logic behind a statement by Radoslaw Sikorski that made waves last week for its historical significance. “I will probably be the first Polish Foreign Minister in history to say so, but here it is: I fear German power less than I am beginning to fear German inactivity,” he wrote in an op-ed. “You may not fail to lead: not dominate, but to lead in reform.”
Why is Merkel so critically important? With a green light from her and others, as Coy explains it, the European Central Bank could print money to buy the bonds of European nations. Or it could issue euro bonds that all members would be liable for, which would help regain value for sovereign debt and, therefore, the banks that own it. While that could end up being inflationary, it’s also possible printing money might not need to happen; the simple fact that doing so has Merkel’s blessings could help to restore confidence in the system.
When it comes to power, we usually find fault in leaders for abusing it, rather than failing to use it. But when only one leader is in a position to wield certain might, it becomes that leader’s responsibility to do so. Power is bestowed on leaders to be used, albeit with great caution. Over-using it may be a more common problem, but inactivity can be just as big of one.
More from On Leadership:
Like On Leadership? Follow us on Facebook and Twitter: