Deutschland’s Iron Lady

Is Angela Merkel the next Maggie Thatcher?

Merkel: Tough as nails?

Gerhard Schröder came to Washington last week for what’s likely to be his final visit as German chancellor. This May, after his Social Democratic Party (known in Germany by the initials SPD) was trounced in state elections, Schröder decided to call voters to the national polls in September, a year earlier than necessary, a move some commentators derided as political suicide. Since the SPD’s conservative rival, the Christian Democratic Union, regularly pulls in nearly twice the SPD’s approval ratings (the SPD is stuck in the 20s), it’s hard to find anyone who expects Schröder to be in office come October.

As if being a self-made lame duck weren’t bad enough, Schröder has quickly been eclipsed in the press by the CDU’s chair and candidate for chancellor, Angela Merkel. The first woman to run for Germany’s top job, Merkel is drawing rave comparisons with Margaret Thatcher. According to newspapers and magazines and across the conservative blogosphere, she’s Germany’s own “eiserne Mädchen” (“Iron Lady”) who will slice through the country’s sclerotic welfare state, bringing the fresh air of free-market reforms to the once-powerful economy. “On paper, Merkel is the ideal candidate,” wrote the Weekly Standard. Britain’s Daily Mail wrote that “Germany’s so-called Iron Lady and the original model have much in common,” including backgrounds in science and a zeal for reform. And then there’s this, from historian Götz Aly in the Wall Street Journal: “If Angela Merkel succeeds … the Federal Republic should see changes more radical than any since 1949.”

Not so fast. Biographies aside, Merkel is no Thatcher. Not only does Germany’s political structure prevent the chancellor from taking on a strong leadership role, but voters are favoring her party largely because they are fed up with Schröder—not because they are sick of the welfare state. What’s more, Merkel lacks both unified CDU support and the charisma to rally the public behind her reforms, both of which were key elements to Thatcher’s success. And in any case, there’s little evidence that her party’s reform package will be much harsher than Schröder’s current agenda. “Merkel will not be an eiserne Kanzlerin, nor a Margaret Thatcher, nor a radical reformer,” says Peter Lösche, a political scientist at the University of Göttingen. So, what to take away from the current Merkelmania? Simply that it’s one more example of how quick conservatives are to portray foreign leaders as capitalist revolutionaries—whether or not they are.

As Schröder and his predecessors can attest, it’s tough to be chancellor. Compared with Britain or France, Germany’s political structure gives much more power to the states and quasi-public institutions—such as unions—at the expense of the chancellor, who, as in Britain, is chosen not by direct election but by the winning party. But whereas in Britain and elsewhere the party with a plurality of votes can still form the government (known as “first-past-the-post”), Germany requires an absolute majority before a party can take power, meaning that the power of the leading party is usually diluted by its need to form a coalition with smaller parties. * Thus, the chancellor is at the mercy of myriad factions and local power centers, any of whom can upset a risky reform package. “She is no Thatcher, because Thatcherism requires first-past-the-post voting, which magnifies the edge of the ruling party,” says Josef Joffe, editor and publisher of the weekly paper Die Zeit. “Germany is a corporatist construction, with power finely balanced among society’s forces. It is consensus-bound and thus veto-driven.”

This might not matter if the CDU had a true mandate for reform. But that won’t be the case. Germans generally recognize the need for some reform, and Schröder’s unpopularity stems less from his agenda (which includes things like cutting jobless benefits) than it does from his failure to convince voters that the pain is worth it—unemployment, for example, is higher now than when he took office seven years ago. But while voters want new leadership, they don’t necessarily want more reform. While the CDU nets 44 percent (to the SPD’s 26 percent) in recent polls, a growing number are also throwing their lot with the newly founded Left Party, a combination of SPD defectors and former Communists promising to maintain the status quo. In other words, Merkel will win, but she can’t assume a carte blanche for change.

Voter schizophrenia is exacerbating tensions within the CDU, which is actually an alliance between the more free-market-oriented Christian Democrats, from which Merkel hails, and the more economically liberal Bavarian Christian Social Union. On the surface, the debate is over the extent of CDU reforms, but it is also a proxy for a personal war over Merkel herself. She rose to power by aggressively knocking off established party members, and after a series of political blunders (most notably her vigorous opposition to Turkish membership in the European Union, which drew loud protest from minority voters), Merkel has come under attack from opponents bent on payback. Until Schröder’s election call, in fact, her star was on the wane; in December she won her third election as party chair by the slimmest margin of her career. (Many political observers in Germany speculate that Schröder engineered an early election in part to force the CDU to go with Merkel rather than give the party time to replace her with a stronger candidate.) As recently as February, the Times of London declared that “Angela Merkel’s chances of becoming chancellor are fading.” A weak administration is hardly the best vehicle for pushing through painful reforms.

Of course, politicians—including Thatcher—have upended conventional wisdom before. Surely Merkel can, too? But that presumes Merkel wants to be a Thatcher in the first place. She doesn’t. Though the CDU’s official reform package won’t be announced for a few weeks, details leaked to the Financial Times challenge her free-market-radical image: An increase in the value-added tax to cover health care, a continuation of Schröder’s labor reforms (including making it easier for companies to fire employees), and tax-code simplification are the key points. “Merkel’s reforms will be a little bit more aggressive than Schröder’s, but the bottom line will be continuity,” says Lösche.

While it would be unfair to dismiss Merkel’s free-market bona fides completely at this point, it’s clear that her near-canonization by European and American conservatives shows how readily they gloss over the details in their search for like-minded pols the world over. Such myopia is the result of forgetting that terms like “conservative” and “market reforms” mean different things in different contexts. Washington Times columnists, for example, embraced Jacques Chirac when he became president in 1995, not realizing that although he may be a conservative in France, he’s still well to the left of the GOP. And so it goes for Merkel. As they say in Germany, “Es ist immer die alte Leier“—it’s always the same old story.

* Correction, July 6, 2005: An earlier version of this piece mistakenly stated that “the party with the most seats forms the government.” It’s the party with a plurality of votes, not the most seats. Click here to return to the corrected sentence.