The United States of Sanctions
The Use and Abuse of Economic Coercion
Years ago, at the Munich Security Conference, I found myself squeezed in on the steps of the grand staircase of a hotel ballroom, trying, dutifully but vainly, to follow a more than usually humdrum speech by Germany’s first female chancellor. Tuning out, I recognized the one-star general hunkered down beside me, a senior staffer in the chancellery. I tapped his sleeve and said, “So what’s it like to work for her?” He turned to me and grinned appreciatively. “It’s like working next to a nuclear power plant. It just runs, and runs, and runs.”
And how it ran. Angela Merkel is now in the final months of her fourth term in office, her last, which is set to end with national elections on September 26. Only Helmut Kohl, the chancellor who oversaw the joining of East and West Germany in 1990, held office for longer. A Pew poll last year showed Merkel to be the world’s most trusted leader. Forbes magazine has ranked her the world’s most powerful woman for ten years in a row. In 2009, the toy company Mattel even created an Angela Merkel Barbie doll. For a while, some U.S. and British commentators, dismayed by their own leaders, even took to calling her “the leader of the free world” (a title the chancellor is said to detest).
Yet at the same time, Merkel’s opacity and technocratic prudence have frustrated and often infuriated those who wanted Germany to articulate a clearer vision of its role in a liberal world order, to take on greater responsibility for defending and shaping that order—or just to acknowledge and mitigate the impact of the country’s decisions on its neighbors and allies. And although the 66-year-old conservative remains her country’s best-liked politician, public approval of her government has dipped sharply as frustration with its haphazard pandemic management has grown.
The looming end of the Merkel era thus raises questions that should hold important lessons—not least for those who are currently seeking to succeed her. Just what was her recipe for power, and is it replicable? Has her tenure made Germany, its neighbors, and its allies better off? And has she prepared her country for the future?
At the beginning of her career, nothing would have seemed less plausible than that Merkel would become Germany’s eighth chancellor, the successor to a line of hard-drinking, smoking, womanizing, and generally scenery-chewing Big Men of West German politics. When the Berlin Wall came down, in 1989, Merkel was a divorced 35-year-old quantum chemist working at an academic research institute in East Berlin. She had just joined the Christian Democratic Union (CDU), when she was picked by Kohl for the most patronizing job in the chancellor’s first post-reunification cabinet: minister for women and youth. She was as unmemorable there as she was in her next job, minister for the environment. Kohl, busy burnishing his legacy and weeding out rivals, referred to her as “das Mädchen” (“that girl”).
But when Kohl found himself embroiled in a party financing scandal in 1999, it was Merkel, and not one of the half-dozen young conservatives circling the old man, who felled him with a piece on the front page of Frankfurter Allgemeine Zeitung, Germany’s conservative daily, that called for his resignation as honorary chair of the party. This audacious patricide led to her election as head of the party. Six years later, in 2005, she became the first East German, and the first woman, to be elected chancellor.
Since then, Merkel has weathered a punishing series of domestic and external upheavals, including the 2008 financial crisis and the ensuing eurozone meltdown, Russia’s 2014 annexation of Crimea and invasion of Ukraine, the 2015 refugee crisis, the subsequent meteoric rise of the far-right party Alternative for Germany, and now the COVID-19 pandemic. She has been in power longer than any of her peers in the major industrialized countries, with the sole exception of Vladimir Putin. This has enabled her to broker countless compromises at EU, G-7, and G-20 summits, as well as to hold together four coalition governments at home (three with the center-left Social Democrats and one with the pro-business Free Democrats). She has outmaneuvered authoritarian leaders, allies, coalition partners, and party frenemies. When necessary, she has plowed through illness, exhaustion, and even a pelvic fracture, suffered while cross-country skiing in Switzerland.
Yet outwardly, the most striking thing about the chancellor remains her determined normalcy. Merkel’s clear, light voice carries the unhurried intonation of the pine-forested, sandy-soiled Brandenburg countryside northwest of Berlin, where her father was a Lutheran parson. Her working uniform consists of sensible flats, black pants, and an endless supply of hip-length jackets in every color. The chancellor and her husband, a retired chemistry professor, live in their old Berlin apartment rather than the official residence; the only visible security is a police officer in front of the building. To the approval of Berliners, Merkel is sometimes seen walking in the city center or shopping in a supermarket, trailed by her bodyguards.
What really makes Merkel stand out from her peers is her ability to hold on to power against all odds.
Arguably, Merkel’s unpretentiousness is itself a calculated expression of power. One German described her to me as a walking force field: “In conversation, you know you’re being subjected to a quiet, all-encompassing scrutiny, all the time.” Another person remembers a meeting Merkel had with then U.S. Vice President Joe Biden in Berlin in 2013. The chancellor waved away his attempts to charm her and pursued her agenda points until she was satisfied that she had nailed down what she needed to know. Then she canceled her next appointment to continue the conversation. “He ended up telling her about looking into the Russian president’s eyes and saying, ‘I can look into your soul, and I don’t like it,’ which she countered with an absolutely spot-on impression of Putin.”
Merkel’s work ethic is as legendary as her wicked sense of humor, her command of her briefs, and her appetite for information and arguments. An American who witnessed some of her phone conversations with U.S. President Barack Obama told me that “they sounded like a graduate seminar.” Her ministers fear her ferociously retentive memory for the details of their portfolios—including the particulars of complex technical and scientific issues, such as trade, digital technology, and, lately, the pandemic. But what really makes Merkel stand out from her peers is her ability to hold on to power against all odds.
One of the most distinctive features of her method is her anti-oratorical speaking style, which anesthetizes commentators and diplomats alike. She can deliver devastating zingers in a parliamentary debate or an interview when she wants to. When a talk-show host once portentously asked her what qualities she associated with Germany, Merkel dryly answered, “Well-sealed windows.” But her default delivery mode is what Germans now call merkeln: so deadpan and convoluted that it’s impossible to pin her down. Behind the style, however, is what German strategists have called “asymmetric demobilization”: dull the issues, depoliticize conflicts, and thus keep the opponent’s voters from going to the polls. This approach has enabled Merkel to modernize her conservative party, dragging it into the political center, pushing her Social Democratic and Free Democratic coalition partners to the sidelines, and co-opting elements of their platforms, such as tax benefits for parents or a statutory minimum wage.
A second key aspect of the way Merkel manages power is that she devolves responsibility but tightly limits trust. The chancellor’s innermost circle consists of a very small team of loyalists with whom she has worked for years (in some cases decades) and in whose discretion and discipline she can place absolute confidence. Everyone else, from cabinet members to party functionaries, is kept on a long leash. Success is rewarded with approval and credit. But those who trip or entangle themselves either come to heel with a newly sober understanding of their options or suddenly discover life outside politics.
Merkel’s decision not to close Germany’s borders to a huge wave of refugees was an act of humanism.
The third element of the Merkel method is assiduously gauging and responding to her base’s mood. She first nailed her national leadership ambitions to the mast with a flaming liberal economic reformist speech at a party convention in 2003. When it became clear that this was too much change for the delegates and might cost her the chancellorship, she backtracked swiftly, dropping old party allies. A few years ago, Der Spiegel disclosed that her chancellery was commissioning, on average, three surveys a week. Her two most daring choices—deciding to decommission Germany’s nuclear power plants within a decade after the 2011 Fukushima nuclear disaster and refusing in 2015 to close Germany’s borders to one million mainly Middle Eastern refugees—were fully supported by polling.
Merkel has twice sailed against the political winds. During the 2008 financial crisis, surveys showed that Germans were strictly against bailouts for EU member states. But she steadfastly opposed her party and public opinion by pushing through the rescue packages and insisting that Greece stay in the eurozone. The refugee decision, for its part, became controversial, and led to the rise of the far right. In 2015, Fiona Hill, a colleague of mine at the Brookings Institution, asked about the decision in a conversation with former Dutch Prime Minister Ruud Lubbers, who had known the chancellor through European Christian democratic circles since her earliest days in politics. Lubbers predicted that Merkel would stand her ground despite the backlash; for the steadfast Lutheran, he said, this was “a matter of deep moral conviction.”
Merkel’s interpreters have labored heroically to reconcile these paradoxes. The simple truth is that Merkel the level-headed empiricist has little patience for visions when there are problems to be solved. She has whipsawed on her principles for the sake of power, but she has also been willing to pay a price for standing up for her deepest convictions. Few of her peers have been able to accumulate so much political capital. Yet even her admirers concede that although she has been exquisitely adroit at riding out the currents of politics, she has been far too reluctant to shape them.
With Germany’s election drawing closer, what has become of all that political capital? What will Merkel’s legacy be—and will she deserve to be called a great chancellor?
Three of Germany’s eight postwar chancellors deserve that title. Konrad Adenauer’s claim to greatness was Westbindung—anchoring the young West German republic in the transatlantic alliance by joining NATO and reconciling with France and Israel. Willy Brandt’s enduring legacy was Ostpolitik: asking forgiveness from Eastern Europe, falling to his knees in the Warsaw ghetto, and seeking détente with the Soviet Union. Helmut Kohl steered the two Germanies to reunification and gave up the deutsche mark for the sake of a common currency, the euro, rooting the reunified country in an enlarging EU.
Merkel unquestionably transformed Germany’s post–Cold War politics, liberalized her party, presided over an extraordinary expansion of German economic and political power in Europe, and did much to defend the European political project. And yet her claims to greatness are inconclusive, perhaps because so many of the significant achievements of her tenure have come with a darker underside.
Prior to the COVID-19 pandemic, the Merkel era saw Germany’s economy roar back from a deep malaise to become the world’s fourth largest, with sharply rising living standards, near-full employment, and historic government budget surpluses. Her economic policies were notably business-friendly, but they failed to push for urgently required technological adaptation in key industries or the modernization of physical and digital infrastructure. A series of scandals—from the car industry’s manipulation of emission data (“Dieselgate”) to the fraudulent insolvency of the payment processor Wirecard—have revealed a deeply flawed corporate culture and a resistance to accountability and oversight. This makes the German economy highly vulnerable to illicit financial flows, a favorite tool of organized crime, extremists, and authoritarian adversaries.
Merkel made an early bid for the title of “climate chancellor” with her strong advocacy of progressive global climate policies. But her domestic climate policies have become embroiled in the many contradictions of her energy policy: her swerve away from nuclear power in 2011 only intensified Germany’s dependence on coal, and despite spending a fortune on subsidies for renewables, the country has had trouble meeting its international emission targets.
Merkel’s record on Europe is even more complicated. Southern European countries resented the austerity policies imposed from Berlin during the eurozone crisis and blamed them for the rise of populists in Athens and Rome; in contrast, some frugal northern European and Baltic countries were demanding that Greece be thrown out of the eurozone in the wake of its debt crisis. Eastern Europeans were angry at her for welcoming refugees and refused to participate in an EU-wide resettlement system. Liberals across the continent have accused her of turning a blind eye to democratic backsliding in Poland and full-blown authoritarianism in Hungary. A succession of British prime ministers, from David Cameron to Boris Johnson, have been dismayed by Merkel’s polite refusal to pay any price to stop them from divorcing the EU. French President Emmanuel Macron was keenly disappointed to find her unimpressed by his grand ideas for deeper European integration.
Yet on many occasions, Merkel has quietly and patiently bridged deep European divides. She fought against a no-deal Brexit. Her move to support the EU’s $826 billion pandemic recovery fund in May 2020 by allowing the bloc to raise common debt in capital markets for the first time—an option fiercely resisted by her party for decades—very likely prevented a disintegration of the union.
Merkel’s decision not to close Germany’s borders to a huge wave of refugees in 2015—“We can do it,” she famously explained—was an act of humanism. But it was not that alone. At the time, it was the only responsible thing to do, because it took huge pressure off smaller European neighbors and the Balkan countries, where the refugees had first arrived. Most of those who stayed in Germany have by now integrated successfully into society, replenishing a workforce that has been clamoring for new labor.
Nevertheless, the domestic and external costs were immense. German cities and states struggled to cope with the influx for months, and citizens felt that the government was asking them to take on too much responsibility for helping the newcomers. Germany’s neighbors objected that Merkel’s decision had created an enormous incentive for additional migration. It took a tawdry multibillion-euro deal with Turkish President Recep Tayyip Erdogan to stop the flow by keeping migrants in Turkey; and indeed, Germany ended up de facto closing its borders to refugees.
Nothing has been quite as excruciating for Merkel as having to deal with a hostile United States under Trump.
Worst of all, the crisis fueled ethnonationalist movements across Europe. In Germany, it turned the Alternative for Germany from a small Euroskeptical party into a raging far-right, xenophobic force that entered the national legislature and became leader of the opposition in a mere four years. Rebellion was rife in the CDU, and Merkel was never closer to losing her job. She won reelection in 2017 with her party’s worst postwar result (33 percent of the popular vote), and she had to negotiate for an unprecedented five months to form a government.
Charting Germany’s shifting relations with the great powers has been Merkel’s most vexatious challenge of all. As a European middle power that shares a continent with and imports energy from Russia, depends for exports on China (Germany’s biggest trading partner outside the EU), and relies on the United States for its security umbrella, Germany has limited strategic options. Historically, this has been reflected in a deeply ingrained instinct to balance allies and adversaries alike, and Merkel has been no exception to this tradition.
Indeed, a decade ago, Berlin saw Moscow and Beijing as strategic partners in what it hoped would become a two-way bargain: Germany would help them transform not just their economies but also their political systems. This made for roaring business. The Ost-Ausschuss, Germany’s chief lobbying association for companies doing business in Russia, was a powerful player in trade policy. So many German CEOs wanted to join the chancellor’s annual trips to China that sometimes three planes were required for the entire delegation. (Merkel would also make sure to meet with Chinese and Russian dissidents at the German embassy, and she received the Dalai Lama in Berlin in 2007.) Today, however, a revisionist Russia and a rising China are playing offense as strategic competitors to the West, not just in their own “near abroads,” and in the Middle East and Africa, but also within Europe’s—and Germany’s—physical and digital borders.
Russia’s annexation of Crimea, its ongoing proxy war in Ukraine, its disinformation and propaganda operations in German social media, the 2015 hack of the Bundestag servers, the 2019 murder of a Chechen political refugee in Berlin, the 2020 attempted murder of the Russian opposition politician Alexei Navalny, and Moscow’s support for the brutal crackdowns on mass demonstrations in Belarus—all these developments have led the German political class to make a bleak reassessment of the relationship with Moscow. Merkel has sharply condemned the Kremlin for the assassination attempt against Navalny and had him brought to Berlin for treatment, and she has backed new EU sanctions against senior Russians in response. Yet she has refused—despite massive pressure from the Trump and Biden administrations—to wield the biggest stick in her arsenal and suspend the Gazprom pipeline project Nord Stream 2, which is intended to bring Russian natural gas to Germany, circumventing Ukrainian and Polish transit routes.
Similarly, China’s ruthless authoritarianism under President Xi Jinping, persecution of the Uyghurs and of activists, drive for regional hegemony, crackdown on Hong Kong, threats toward Taiwan, and confrontational diplomacy in Europe have also hardened attitudes in Berlin. Owing to cybersecurity concerns, the German government is planning new restrictions on telecommunications providers that would effectively bar the Chinese company Huawei from the country’s 5G network. In September 2020, China’s foreign minister, Wang Yi, got an unusual public scolding in Berlin from his host and German counterpart, Heiko Maas, who told him, “We offer our international partners respect, and we expect the exact same from them.” Growing numbers of representatives in the Bundestag have demanded a tougher line on China. Yet when Germany held the rotating EU presidency in the second half of 2020, Merkel pushed through a Chinese-EU investment agreement despite loud concern on both sides of the Atlantic.
Nothing, however, has been quite as excruciating for Merkel as having to deal with a hostile United States under President Donald Trump. As a young woman in East Germany, she dreamed of traveling to America; in 1993, she spent four weeks touring California with the man who would become her second husband. As chancellor, she became a dedicated transatlanticist, even defending President George W. Bush’s war in Iraq. Obama appeared to her to be a lightweight at first, but she grew genuinely close to him; it was Obama who urged her to run for a fourth term because of the risk to Europe from Trump. Trump turned out to harbor a relentless animosity toward the EU, Germany, and the chancellor. In May 2017, after Trump’s first appearance at a G-7 summit, Merkel told a campaign audience in a Bavarian beer tent, “The era in which we could fully rely on others is over to some extent.”
Merkel welcomed Biden’s election with warmth (and palpable relief). Her defense minister, Annegret Kramp-Karrenbauer, who shares her views on the importance of the alliance with the United States, keeps pushing for greater defense spending and a more forward-leaning German military posture. But it is also true that Germany’s security capabilities have been woefully underfunded for far too long. Like Merkel’s dithering over standing up to Moscow and Beijing, German military weakness has undercut the security of Europe and NATO.
The darkening geopolitical landscape and the menace of the extreme right appear to have unleashed something in Merkel. According to a Der Spiegel story, she spoke to her party’s parliamentary group in 2018 about the bloody wars of religion that followed the Reformation. The ensuing more than six decades of peace, Merkel said, lulled Europeans into a false sense of security, making them unprepared for what came next: the Thirty Years’ War (1618–48), which killed up to a third of the population in some parts of German lands. To reinforce the message, she added, “More than 70 years have also passed since the end of World War II.”
When the pandemic began, Merkel was one of the first leaders to grasp that it could become a modern-day version of these early catastrophes. On March 18, 2020, the chancellor told a stunned nation in a televised address: “This is serious. You should take it seriously, too. Since German unification—no, since World War II—there has been no challenge like this one, where our common solidarity matters so much.” At first, it seemed as though her country had heeded her; in the spring and summer, German policymakers acted swiftly, decisively, and in unison. While the virus raged elsewhere, caseloads in Germany stayed low, and the country began to reopen. Germany—and Merkel—was being hailed as a shining example of leadership.
But now it appears that Merkel the scientist, crisis manager, and compromise broker is facing her greatest failure at home. Warnings (including hers) of a second pandemic wave were ignored. The result was a horrific winter spike; as of March 2021, the national death toll exceeded 70,000. The wealthy, well-ordered Germany that took on the task of integrating one million refugees in 2015 is now struggling to deliver tests and vaccines.
There are many causes for this chaos. Health policy is the business of Germany’s 16 states. In a parliamentary system, the chancellor does not have a veto over policies that are state prerogatives; all she can do is persuade. In a year with six regional votes besides the national vote in September, politicians deprived of most of the options of normal retail politics are busy competing with one another as the protectors of their constituents’ special interests. The country’s health administration is overregulated and underorganized—a fact made all the more ironic by the fact that one internationally successful vaccine, Pfizer-BioNTech’s, was co-developed by German scientists of Turkish origin.
Merkel seems increasingly frustrated and depleted, her endless patience eroded.
Even Germany’s friends would add that the country’s internal political debates can display a complacency that seems disconcertingly at odds with its current challenges and vulnerability. They are not reassured by the fact that only months ahead of the national vote, the question of who could be Germany’s next chancellor remains wide open.
Opinion surveys still suggest that the likeliest next German government will be led by a conservative chancellor, with the Greens as junior coalition partners. But a recent slump in the fortunes of Merkel’s CDU does not bode well for its chances in September. Her chosen political heir, Kramp-Karrenbauer, resigned as party leader after only a year. The new party leader, Armin Laschet, the premier of Germany’s most populous state, North Rhine–Westphalia, has put in a lackluster performance. In mid-March, the CDU suffered its worst-ever defeats in two bellwether regional elections. The country’s febrile and angry political mood has been exacerbated by revelations that several conservative legislators profited from corrupt deals to procure face masks.
So far, none of this seems to have given the far right, paralyzed by infighting and the threat of observation by the domestic intelligence service, the boost it yearns for. But Laschet may yet find himself elbowed aside by Markus Söder, the Bavarian premier and leader of the CDU’s local sister party, the Christian Social Union. Some are even speculating about the possibility in the fall of a center-left coalition of the Social Democrats, the Free Democrats, and the Greens—a “traffic light coalition,” so called for the parties’ colors—with the CDU in opposition.
Merkel, meanwhile, seems increasingly frustrated and depleted, her endless patience eroded, her legendary negotiating energy spent. Germans may someday come to appreciate that Merkel was singularly lacking in the character flaws of her three great predecessors, Adenauer, Brandt, and Kohl, each of whom left office under a shadow and against his will. Her integrity and dedication are beyond question—and she will be the first of Germany’s heads of government to relinquish power of her own accord. Nonetheless, and despite her considerable achievements, the ultimate responsibility for the state of the country, and its relations with its allies and adversaries, lies with the chancellor.
As Germany ponders whom to elect as her successor, it might heed a lesson from the 2011 Fukushima disaster. In the aftermath of the earthquake and tsunami that led to the world’s worst nuclear power accident since Chernobyl, it became clear that studies about the vulnerability of the plant’s architecture had been ignored. In other words, disaster might, with proper planning and action, have been averted or mitigated. Modern democracies, too, face a future of increasing crises and upheavals. Germany’s current state is an object lesson in the dangers of failing to prepare for and protect oneself, one’s neighbors, and one’s allies against the next disruption.