Angela Merkel's political fortune
Angela Merkel enters the New Year as the political colossus holding Europe together. She's even the "Chancellor of the Free World," as TIME magazine put it after making her "Person of the Year" for 2015, something the Financial Times also did.
In her 11th year in power as German chancellor, the leader of the centre-right Christian Democratic Union has kept the German economy afloat over the global financial crisis and the Eurozone debt crisis--Europe's largest economy is 15% bigger today than when she took power in 2005.
Among Merkel's feats to appease the German electorate, the doctorate in physical chemistry has preserved the euro, imposed austerity on spendthrift neighbours, sacrificed Cyprus as a lesson to others and won games of brinkmanship with Greece.
But now, close to a majority of Germans want Merkel gone. Rather than inspiring awe, Merkel is triggering growing protests in Germany, revolts within her cabinet and undermining by her finance minister.
The drop in support for Merkel and her conservative coalition is mainly due to Berlin's decision last year to accept more than 1 million refugees, about 1.5% of Germany's population, a choice that her Finance Minister Wolfgang Schaeuble likened to an avalanche started by "a careless skier".
About 48% of respondents to an Emnid poll for the Bild newspaper published on December 2, 2015, said they don't want Merkel to serve another term from 2017. That result topped the 46% who said they did. (The other 6% were undecided.)
While Merkel has erred during her time as chancellor--austerity has imposed deflation on the Eurozone, her dithering has resulted in crisis after crisis that still leaves the euro's future uncertain, and she has done little to revamp Germany's export-dependent economic model--such results should worry investors.
A centrist and pragmatist, who has such trust of investors that a recent cover of The Economist described her as the "indispensable European", is vulnerable. A leader who was unassailable in the middle of last year could easily decide not to contest the elections next year.
The populist forces swirling within Germany that would gain more traction if Merkel is weakened could be less accommodating to European interests. These hardliners would stop the European Central Bank's quantitative-easing program, expel Greece from the euro given the chance and even pull Germany out of the common currency.
Five state elections in Germany throughout 2016 will probably provide the best indication of Merkel's likely fate.
