Merkel’s biggest test

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The election of Angela Merkel for a third term highlights lingering and new issues that she will face and how her legacy is defined by her agenda.

Angela_Merkel_-_World_Economic_Forum_Annual_Meeting
Angela Merkel wins historic third term in German elections.  Photo: Wikimedia Commons

That Angela Merkel has been elected for a third term shows she has enough traction and momentum within her country to lead it through the social, and more importantly, economic turn that is expected from her party. Some quarters expressed reservations about her resounding support for bailout packages in the Eurozone countries could prove to be a mistake that jeopardized Germany’s domestic economy for the sake of the European one. But it seems it has worked in her favour.

It means that even though many of the people have shown trust in her to guide them through these tough economic times, her term also hangs in the balance to look out for German interest going forward. Germany is the strongest economy in the European Union, and it is thought that continued support for the European countries has led to deadweight on the entire German economy. The lack of economic stimulus caused by the bailout packages has been taxing, and it was thought this could prove to be the deciding point leading to a new leader at the helm.

That did not come to pass, however, and it seems that Germans are giving another chance to Merkel to continue on with her plan — rather than pass the reins to a new leader, now halfway through the crisis. Challenges are mounting for the German leader though, as she has to balance the concern of the aging population, the pension costs, neglect of public infrastructure and education, which seems to be suffering. Rising discontent in the country is attributable to the fact that citizens see that Germany is ‘paying off other countries’ debts’ before looking to solve its own ills.

The rise in energy, welfare, and social benefit costs, is going to be the biggest challenge going forward — as the economy looks to grow its exports, its major source of growth and it is expected that the German economy will be robust enough to grow in the next quarter. The persistent growth in the economy will again surpass the growth of the euro economy and is a saving grace,  as it looks to claw its way out of the longest recession since the Second World War.

At this point of time, Merkel needs to address not only the economic woes, but also the social fabric of the country, which could prove to cause major problems in the years ahead. The first is the aging society, which will be mean a need for imported skilled workers in the near future, while pension programs will have to fund the social welfare of the aging population, which could prove to be a double whammy for the economy. In addition, the infrastructure programs of the country have been neglected in recent years and now the problem seems to have reached a critical mass where something has to give. The extra expenditure will be a strain on the German coffers as they will look to fund these programs in the near future.

The problems on the domestic front, compound the challenges for Merkel as she vows to counter the situation in the Eurozone and with the UK already pulling out of any solution for the crisis; the German and French economies are the only ones strong and robust enough to drive any solution home.

It seems that the third term has been granted to Merkel based on her plans which, even now, haven’t reached their forgone conclusion and some of her legacy will rest on events yet to take place. Angela Merkel must now justify the people’s choice and see her agenda fulfilled, both at the international and domestic level.

© Zain Naeem

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