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Opinion The new European revolt against Angela Merkel

German Chancellor Angela Merkel at a European Union summit in Brussels on Feb. 21. (Olivier Matthys/AP)

Max Bergmann is a senior fellow at the Center for American Progress. He served in the State Department from 2011 to 2017.

Angela Merkel is facing a European revolt.

In the past 10 days, the normally staid, diplomatic politics of the European Union have more closely resembled the bitter partisanship of Washington. A meeting of European leaders descended into a contentious five-hour showdown, ending in acrimony and explosive leaks. Heated rhetoric, negative political ads, impassioned public appeals and bitter references to World War II now fill European papers.

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The spark that kindled this fire was a proposal from nine E.U. states, led by France, Spain and Italy, to proceed with so-called coronavirus bonds, which would empower the E.U. to respond economically to the crisis. The initiative was instantly opposed above all by northern European states, led by Chancellor Merkel’s Germany and the Netherlands’ Prime Minister Mark Rutte.

At first glance, this dispute over a bond seems obscure. Yet this is in fact a fight over the future of Europe. The common European bond proposal hits at the core of what Europe’s union is for. It is an act of unity that says that, in this time of crisis, Europe stands not as 27 separate nations but as one — in a union. A common E.U. bond would take the debt that individual European states accrue to fight this crisis and make it a collective European responsibility.

The bond issue has broad implications: Moving ahead with it would entail a sweeping increase in the power of the federal union. Jacob Funk Kirkegaard of the Peterson Institute calls it Europe’s “Hamilton Moment,” referring to the young U.S. federal government’s decision in 1790 to assume all the debt incurred by the individual colonies during the War of Independence. This was a crucial step toward the creation of a strong central government in Washington.

The move by those nine countries for a common E.U. bond was in fact a revolt against Europe’s status quo. It was at its core therefore a revolt against Merkel and the past decade of austerity in Europe.

Merkel has been widely lionized, both overseas and at home. A recent profile of her in the Financial Times lauded her approach to the novel coronavirus domestically and explained internationally she has become a “symbol of western liberal values scorned by nationalists such as U.S. president Donald Trump.”

But many Europeans see her differently. Merkel is also the architect of a decade of devastating austerity that has caused economic devastation and deprivation throughout much of the continent. This has helped to fuel the rise of right-wing populist movements.

After the 2008 economic crisis, Merkel, as the head of Europe’s leading economy, was calling the shots. The crisis revealed that Europe’s new currency (the euro) had a design flaw. While the E.U. had a common monetary policy with its own central bank, it lacked a common fiscal policy. The E.U. thus couldn’t enact the sort of bold fiscal stimulus measures seen in the United States and China. Merkel could have pushed for that. Instead she demanded austerity.

When the Greek economy collapsed, teetering on the brink of default in 2009, Merkel lectured southern European countries about profligacy. She turned what was a manageable crisis into a systemic shock to Europe’s economies. Unable to enact domestic stimulus measures since the euro mandated deficits stay below 3 percent of GDP, the only path forward was crushing austerity. Greece experienced an economic depression. Spain saw unemployment rise to 25 percent, and Italy saw its debt burden grow to unsustainable levels. This is why economist after economist have railed against the adoption of the euro.

Over the past few years, as the calamity of austerity became clear and as populist parties and movements plagued the E.U., European political leaders sought reform, pushing to strengthen the E.U.’s ability to stimulate growth. Emmanuel Macron’s election in France in 2017 looked like a turning point. He had offered proposal after proposal. Merkel, however, refused them all.

As the coronavirus crisis hit, it looked like the E.U. had learned some lessons. The E.U. suspended its rigid deficits rules. The European Central Bank, despite a brief initial misstep, quickly announced a massive relief package (in sharp contrast to its hesitation in 2008).

Yet on the larger question of whether Europe should assume common responsibility for debts incurred in the crisis, Merkel has stuck to her guns — it’s a nein.

To be fair, Germany is not the only obstacle. Other conservative governments like the Netherlands are standing behind her. But Merkel carries their weight. If she moved, Europe would move. Merkel has the power to unite Europe, set it on the path for an economic revival. Yet she refuses.

Few European leaders in history have had the power to move Europe and done so little. The question now is whether Europe’s union can survive such obstinacy.

The Opinions section is looking for stories of how the coronavirus has affected people of all walks of life. Write to us.

Read more:

Wess Mitchell: Covid-19 is a chance for the U.S. and Europe to unite on China

Heather A. Conley and John Kornblum: The coronavirus crisis is stripping bare Europe’s deep fractures

Carl Bildt: The coronavirus is another test for Europe. Working together will be key.

Henry Olsen: Coronavirus could damage the euro zone

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