Germany – the Merkel Era and its repercussions

Angela Merkel has witnessed and accomplished a lot in her political career as chancellor for Germany – from four US and French presidents to nine Japanese and Italian Prime Ministers, she has been in power since 2005, during which she turned her nation into an economic powerhouse. 

As it stands, Merkel sees an incredible 80% popularity rating, and for good reason. She has vastly expanded opportunities for both women and the elderly, all the while hosting a million refugees. Yet still, she faces criticism – the most common of which is that she lacks vision and has left Germany unprepared for the digital era.

In the past 16 years – the era since Merkel has been in power – Germany has witnessed incredible economic growth. Its gross domestic product (GDP) per capita has increased twice as fast as UK, Canada, Japan, and France. Unemployment rate is at a 2-decade low – the first of Germany’s economic miracles – and 70% of Germans have expressed satisfaction with the current economic situation.

It has to be born in mind, however, that while Merkel’s tenure has seen much growth, she cannot be accredited for the entire success. In fact, a lot of the fruits we’re seeing are the result of her predecessor’s, Gerhard Schröder, labor. The second economic labor occurred without Merkel moving a muscle, and as it stands, Germany accounts for 40% of the European Union’s exports. However, much of it is absorbed by China alone, instating the country’s dependence on the Asian giant.

That said – one must shed some light on Merkel’s accomplishments. In 2009, during the financial crisis, her response helped overcome the disaster. An example is her cash-for-clunkers scheme which boosted car sales. Due to this, Germany sees an incredible job rate as well as the highest rate of female labor force participation among the G7 countries. The boost in female labor force participation was also greatly aided by improved childcare. Not only that, but the creation of more jobs was also dramatically helpful to the 1 million refugees from Iraq, Afghanistan, and Syria the country hosts.

The downside, however, is the quality of jobs. A large number of women only work part-time and only one company in the country’s blue-chip Dax index has a female CEO.

As it stands, the pandemic has little affected Germany’s riches. Unfortunately, the downside is that the country is facing is a low level of technological penetration due to little public investment – which has left it ill-prepared for the future.

One problem is the internet speeds. Lack of high-speed broadband, due to lack of investment, has caused a rift in urban-rural internet speeds and a below-average mobile broadband data consumption.

Even before the pandemic, Germany needed about €450bn of public investment to, among other things, improve communications, boost education and strengthen the infrastructure — which failed to contain this summer’s floods.

With the pandemic, Merkel’s shortcomings were made more prominent – thus, with the upcoming elections, one of the rallying cries of Merkel’s opponents has been the need for greater public investment.

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