Wolfgang Rattay / Reuters Balloons depicting leaders of the G7 countries are inflated in Garmisch-Partenkirchen June 7, 2015. Leaders from the Group of Seven (G7) industrial nations meet on Sunday in the Bavarian Alps for a summit overshadowed by Greece's debt crisis and ongoing violence in Ukraine. Leaders are (L-R) German Chancellor Angela Merkel, U.S. President Barack Obama, French President Francoise Hollande, Japanese Prime Minister Shinzo Abe, British Prime Minister David Cameron, Italian Prime Minister Matteo Renzi and Canada's Prime Minister Stephen Harper.

Pragmatism Without Purpose

Merkel's Record in Context

As devoid of successors as she is of challengers, German Chancellor Angela Merkel will in all likelihood seek another term in next year’s federal elections. In spite of her party’s lackluster performance in regional polls this year, Merkel will win again. Her current coalition partners, the Social Democrats, have been unable to come up with a potential challenger, and the Greens are more likely to aim for sharing power with her than risk antagonizing her. By the end of that next term, Merkel will have been in office for 17 years, eclipsing even West German Chancellor Konrad Adenauer and her own mentor, Helmut Kohl, the architect of reunification. But to what end?

Merkel’s legendary pragmatism—much admired during the darkest hours of the eurozone crisis—betrays a lack of ultimate purpose. Rightly or wrongly, within Germany, she has been decisive about energy policy and refugees. At crucial European policy crossroads, however, she has consistently chosen pragmatic but ultimately mistaken paths, at best delaying the continent’s recovery from crisis and at worst deepening the existential threats to the Europe she purports to defend.

The flames of the global financial crisis reached Europe quickly in 2008, and soon enough, every sovereign announced credit lines for their financial institutions. Merkel spearheaded the bank rescues, passing the German bill at record speed in the Bundestag; yet she resisted a unified European response. She tactically favored independent national solutions, aware as she was of the claim that a European response would heighten moral hazard among bankers. She took that stance in spite of the fact that one of the first troubled banks, Dexia, was by definition a transnational bank that required coordination between Belgian, French, and Luxembourgian authorities. Yet national bailouts are only as credible as those countries’ respective sovereign balance sheets—some of which were incredible, indeed.

The headquarters of the European Central Bank (ECB) is pictured in Frankfurt, Germany, June 28, 2015.

The headquarters of the European Central Bank (ECB) is pictured in Frankfurt, Germany, June 28, 2015.

The strict nationalization of the banking problem in the midst of a global crisis tied financial systems to the mast of each individual nation. Amid the

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