The Germans who went to the polls Sunday were, by and large, a contented lot. Two-thirds of them felt that their prosperous country was “well” prepared for the future, according to a leading exit poll. Four out of five believe — accurately, according to all the economic statistics — that they are better off than their neighbors in Western Europe.
They were also pretty old. Germany’s population of nearly 82 million, and shrinking, has a median age of 45.3 years. But since that number includes 20 million or so who are 18 and younger, the median voter is actually approaching 50.
So one way to interpret Chancellor Angela Merkel’s sweeping victory is that this was what you would expect from an electorate dominated by the well-heeled and the silver-haired — people whose risk-taking years are receding into the distant past, while their years of living off a pension are fast approaching.
Two contradictory fears threaten these Germans’ contentment: what might happen if the government spends their hard-earned national savings on a bailout for Greece or Italy, and what might happen to Europe if someone doesn’t prop up those spendthrifts.
For chancellor, they wanted someone to face such worrisome alternatives and steer between, or around, them — someone like Merkel, a cautious ex-scientist whose proudest boast during the campaign was that she thinks before she acts, and whose victory speech Sunday night included a promise to exercise her new mandate “responsibly and carefully.”
But is a brand of leadership tailored to the needs of an aging German electorate really what’s best for Europe?
So far, Merkel has managed the crisis of the euro zone well. The problems are far from solved, but the bottom line is that the euro, and the European Union, are still intact, well after many experts had declared them doomed.
Merkel’s strategy was to embrace Germany’s dominant role in the continent’s finances without flaunting it and to use that leverage to extract economic reforms from the continent’s debtors. Having pushed austerity as far as she could, she acquiesced in the European Central Bank’s crucial decision to ease monetary policy, despite the misgivings of her economic advisers.
Countries forced to enact austerity at Germany’s behest may howl in protest, but Merkel was guided by a keen sense of how much, or how little, largess toward its neighbors her middle-aged nation could tolerate, especially in light of the social-welfare cutbacks, such as a higher retirement age, that Germans themselves had recently accepted.
What Merkel hasn’t yet done, however, is press on to more difficult objectives, such as the construction of an integrated system of financial regulation and, most important, rekindled growth in Europe’s southern tier — especially in stagnant France, Berlin’s erstwhile partner in European leadership.
The latter goal would require Germany at some point to relent on austerity and share export markets with producers from Southern Europe — which it has been loath to do.
No doubt Germany’s dependence on exports makes sense for an aging country with a dwindling population — and, hence, a limited domestic market. Yet its giant export surplus, now running above 6 percent of gross domestic product, is as much a part of the economic imbalance plaguing Europe as Greece’s chronic deficits. It also renders Germany vulnerable to a downturn in China, the United States or anywhere else where Mercedes-Benz and Siemens sell.
Merkel should learn from the biggest mistake of her chancellorship. This occurred after the 2011 nuclear accident at Fukushima, Japan, when she agreed to shut down all of Germany’s nuclear power plants by 2022 — even though Germany is not prone to earthquakes or tsunamis.
This reversed her previous promise to keep the country’s plants running. Yet, at the time, it was what her risk-averse electorate seemed to want and, therefore, what her political self-interest seemed to dictate.
Now Germany’s $735 billion plan to convert to renewable power by 2050 is floundering amid higher energy costs for businesses and consumers. Carbon emissions rose last year because electric utilities have to use fossil-fuel plants to compensate for intermittent wind and solar power — and Merkel is under mounting pressure to fix the mess.
Germany would probably have been better off if Merkel had not taken counsel of her people’s nuclear fears. It’s one thing to be risk-averse, quite another to think you can avoid it altogether.