Merkel digested this study, and has since preferred to say only why she is doing something, keeping quiet about the details of how she is doing it. In any case, major speeches are not in her nature. Firstly, she knows she is no great orator. Her sober, factual style does not arouse emotion. And secondly, the view of the Chancellor's office is that a speech of that kind wouldn't be consistent with the Merkel method. The Merkel method is the quiet battle involving herself and her closest and most loyal colleagues, methodically working through a problem, splitting it into its various parts and then working on a solution step by step, bit by bit. If it turns out well, Merkel is happy. If parts of it fail to work, no one will notice. If Merkel were to announce a great success, she would be judged by her words. And in any case, she doesn't believe in grandiloquence – experience has taught her that big words seldom lead to great deeds. A speech would not be the solution. “You won't get a new Merkel now, the brand isn't going to change at this point,” said one of her collaborators who helps with the groundwork.
People are often amused by the fact that throughout her career, Merkel has surrounded herself with ambitious young men. The image is not entirely inaccurate. As Leader of the Opposition, she was followed around by a team of young MPs who were passionate about foreign policy – many of them ended up as ministers or secretaries of state. As Chancellor, Merkel has gathered together a boy group of a different kind: young, loyal, highly intelligent and hard-working civil servants, none of whom have any desire to show off, who avoid publicity and, like Merkel herself, think objectively. Grand strategic designs are not their style, and in any case that is not the way Merkel works. Like the Chancellor, they prefer going in small stages, using discussion groups to find a consensus, making compromises. And they know their files inside out.
Government spokesman Ulrich Wilhelm probably played the most prominent part in this group, which is conspicuous for its strong cohesion. For her first four and a half years, Wilhelm was Merkel's public face before leaving the Chancellor's orbit and becoming Director of Bavarian Radio. Yet, aside from his public role, he was one of her most important advisers on all political matters. As Wilhelm had great input into foreign policy and hardly left Merkel's side, his influence was enormous. Equally important was his function as a sparring partner, a perfect private tutor in the social history of the western half of the Republic and post-war West German history. In fact, for history in general, no one else in the Chancellor's office had such a grasp of the lessons of the past. Wilhelm is a quiet but forceful character, a workaholic with a tactical mind, who learnt his trade from Edmund Stoiber. It has also done him no harm to be compared with Robert Redford – for the journalists of Berlin he was an honest communicator who won sympathy for his boss.
Wilhelm's successor, Steffen Seibert, spends as much time as he did with the Chancellor, but his is the fate of the second child: Merkel is more independent now: she works at a higher speed, her circle of advisers is less important, access to her is more difficult, and it is now taken for granted that the spokesman will spend most of his time with her. Merkel's loyalty to Seibert showed after Monti's early-morning coup at the fateful Brussels summit. Seibert was not held responsible for the breakdown in communication, although Berlin was furious and wanted a scapegoat. The only lesson drawn from the incident was: always hold a press conference immediately, even at 5.20 in the morning.
It is with gestures such as this that Merkel reinforces the round-table ethos among those who work with her most closely. All heads of department in the Chancellor's office have the boss's mobile number – she herself will phone or send a text at the weekend if something comes up. Merkel is uncomplicated but demanding in her requirements, and will sometimes ask managers or experts from more junior levels to say what they think when she needs a well-informed opinion. She doesn't send emails; that would create problems in terms of security. Nor does the Chancellor use a computer – the only exception is her iPad, on which she follows the news and results on the financial markets, and watches news documentaries. She doesn't keep a diary – any reconstruction of her life in government could be obtained from the extremely detailed diary of her engagements, the most important tool for steering the ship of state.
Merkel would not have got through the most difficult task in her entire Chancellorship without her civil servants. In the end it was only a very small circle, no more than a handful of people, who masterminded her second period in office and gave a direction to her Chancellorship. As if under siege, Merkel could withdraw with these people to the innermost part of her citadel, not listening to external advisers but trusting entirely her instinct, her acumen and the advice of her faithful confidants. The Chancellor's office functions like the Kasner parsonage of her youth: impenetrable from outside, while on the inside demanding and ambitious.
A key figure in this select group, besides her private secretary and personal private secretary Beate Baumann, is the second woman in Merkel's “girls’ camp”, Eva Christiansen. The stability and efficiency of this trio of women, Christiansen, Baumann and Merkel is no longer questioned: in a sense the trio is integral to the Chancellor's modus operandi. Born in 1970, Christiansen has been with Merkel since 1998, first as a spokeswoman and now, in a broader sense, as someone to whisper information to the media. She surprised the small world of Berlin when she went on maternity leave at the beginning of Merkel's Chancellorship but came back in 2007 and carried on with her job as if it were the most natural thing in the world – for in the Chancellor's office even that is possible. And there is more: besides the post of media adviser specially created for her, Christiansen now runs the department of political planning, including the nitty-gritty – speech-writing and, unofficially, looking after the image of the Chancellery. Christiansen is one of Merkel's most trusted colleagues, part of the inner circle that knows everything and says little. If she didn't have sound political judgement and above all an infallible instinct for the public mood, allowing her to exert the right amount of restraint at the right moment, she would be unable to do her job. But very few people know that, because Christiansen, like all its really powerful members, belongs to Merkel's silent order.
In the first phase of the euro crisis and before he moved on to become head of the Bundesbank, economic adviser Jens Weidmann was the man for analysis and ideas. If he or any of the Europe advisers were summoned to the Chancellor's office on the seventh floor, it was about the most crucial points of the crisis: the ESM in the late summer of 2010, then the pact to encourage competitiveness, and later the fiscal compact. The secretary of state in the Finance Ministry, Jörg Asmussen, was also called upon to provide economic advice. Asmussen and Weidmann have known each other since university, and both studied under the former head of the Bundesbank, Axel Weber. Merkel showed her high opinion of Asmussen when she took him to the state dinner at the White House as a guest of the German government, which was not strictly necessary, since Finance Minister Wolfgang Schäuble was also there. At the beginning of 2012, Asmussen left Berlin for the European Central Bank, where he joined the board of directors. Like Weidmann, he still advises Merkel informally.
Her closest circle during the crisis naturally also includes Christoph Heusgen from the Department of Foreign Policy, and the head of the Europe Department, Uwe Corsepius, who was in charge of the Europe team until the summer of 2011, and his successor, Nikolaus Meyer-Landrut. Corsepius was responsible for the German presidency of the Council of Europe in Merkel's first term. He played a prominent role in negotiations over the Lisbon Treaty and was responsible for the Berlin Declaration, which was unveiled at the end of the EU's Golden Jubilee celebrations. In the summer of 2011 his long-term deputy took over from him: Nikolaus Meyer-Landrut, a career diplomat from the Foreign Ministry, who has spent most of his professional life dealing with the EU and its treaty projects, particularly as a member of Valéry Giscard d'Estaing’s entourage. Meyer-Landrut is not only a first cousin of the singer Lena, which brought him a certain amount of public a
ttention, he is above all an expert on the structure and organizations of the EU, knows its treaties and loopholes better than anyone else and – like all of Merkel's advisers – is decidedly Francophile.
So it might have been a lucky coincidence that Meyer-Landrut took over as head of the Europe Department at the moment when the crisis was reaching its climax, causing the Chancellor to realize that she urgently needed to become a driver and not a passenger. Until the summer of 2011, the main players had been mostly preoccupied with coming to an agreement about the cause of the crisis. Only at that point did the voices that were claiming that the real problem was Germany's diktat about budget cuts begin to die down – the same voices that had suggested Eurobonds, or a common fund as a means of erasing debt. Europe had a deficit problem, a competitiveness problem and a structural problem – and also, according to some experts, a governance problem. Slowly, then, some sort of unanimity began to prevail.
At that point Merkel asked her colleagues to find ways in which the crisis could be tackled at its root. She wanted a political answer, because the problem was a political one. If policy simply chased the markets by using the markets’ own methods, it would never catch up with them. Yet there was one decision that seemed to lead in the right direction: the fiscal compact, a treaty that would enforce improvements in budget discipline. But this wasn't enough. Merkel wanted to tackle the actual source of the infection. The various analyses strengthened her opinion that something fundamental had to be done. Something new was called for, because the largest crisis since the founding of the European Union could only be resolved with correspondingly large reforms.
In 2011, Meyer-Landrut used his summer holiday in France to put some distance between himself and the frenzied atmosphere of the crisis and make a few notes. The most important thing was to get inside the problem. In the end he reduced Europe's political deficit to a simple diagram, a few circles and lines on an A4 sheet of paper. It showed a system of coordinates: a vertical axis and a horizontal axis. The left-hand side of the diagram represented the individual member states, the right-hand side the European Union. All the political areas that were working smoothly were in the space above the horizontal axis. Below the line were the trouble spots.
It showed that there were no problems in the upper right-hand area, the European Union side. Justice, the single market, competition and the environment were all above the X-shaped axis and hence in the green. No constituent parts of the EU figured in the panopticon of the crisis. On the left-hand side of the diagram, however, in the half that contained the member states, the outlook was bleak. All the sources of trouble were here, all the problems that had triggered the currency crisis and caused disparities in competitiveness: labour laws, tax laws, budgets, social-security systems – they were all below the horizontal line. The message in the diagram was this: if the root causes of the crisis in the member states cannot be controlled, then neither will be the currency crisis. Europe needs a means of governing its economy, a common financial policy, a harmonized tax system and comparable levels of social security. The main political issues must be dealt with at a European level.
To anyone who studied the drawing there seemed to be only two options. This was where the real message lay for Merkel: the critical issues could be moved out of the bottom left-hand side and put in the top right-hand area – in other words, into the jurisdiction of the European Union and its institutions. Member states would thus give up sovereignty over taxes, the economy, budgets and social-security systems. That would mean a European superstate, a United States of Europe. Alternatively, these issues could be left on the side of the member states – but ensuring that they were moved to the upper area on that side of the axis. Merkel had a choice: she could opt firmly for European integration, shifting all power to Brussels. Or she could come up with something new, a union that worked in parallel with the EU, a new conglomerate of nations. International law describes such cases as intergovernmental solutions: states conclude treaties with each other and find ways of solving problems together.
In coming to a decision, Merkel asked herself a simple question: which of these will bring better results? The answer was: it will be better if the individual states are simply coordinated and allowed to retain their sovereignty. There were several strong arguments in favour of this. Above all else, she was concerned about national sensitivities. The social models in the various European countries are too different to allow any quick consensus to be reached on social-security systems, pensions and taxation. Trying to integrate these into the community may cause social unrest. Not only that, Merkel foresaw huge legal obstacles and problems in domestic markets – and not just in Germany. Treaties would have to be reopened, altered and ratified. So she made a firm decision: member states should make their own arrangements: this would not require too much alteration to European treaties. Those who had read her Bruges speech already knew that the Chancellor would come to this conclusion.
So is this Merkel's great plan? Is that the Chancellor's idea of European finality? It would be out of character if she carried that diagram about with her like a Bible. She would never openly admit that she has a master plan to rescue the European Union. If she says anything at all, she takes things slowly, step by step, because it is a matter of the greatest importance, involving a change of paradigms, a form of revolution. In her own mind, Merkel has abandoned the community method: Europe's most urgent problems can no longer be dealt with by a Commissioner. The Chancellor wants a parallel organization, one that will coordinate individual nations’ requests, with a supervisor who might work in the President of the Council's office and supervise the implementation of treaties concluded between individual states. The plan also specifies that, in the future, different countries would move at different speeds. Many countries would agree to coordination, others would not. The United Kingdom already took the first step in the second direction when it decided not to join the fiscal compact.
Merkel gathered her strength for the decisive attack. She wanted her idea of the new order to be adopted by the European Council in December. The basic principles for fighting the crisis had already been accepted: aid in exchange for reforms, competition rather than levelling-down. Now it was a matter of fitting the building blocks of reform into the European decision process as gently as possible. In that respect at least, the summit in June 2012 was a success. The heads of the various EU institutions were asked to come up with proposals for reform, so the ball was already rolling. It is true that the first working group on reform met with little enthusiasm at the autumn summit in October, but that made no difference. The crucial thing was that reform was now firmly on the agenda for all heads of government – because it would ultimately be up to them to decide what needed to be done.
Merkel launched her idea just before the October summit. Once again she chose to make a statement in the Bundestag to outline her vision of the future structure of the EU. Once again her speech was mostly drowned out by everyday business. But she had another string to her bow. Three weeks later she spoke to the European Parliament, where, for the sake of simplicity, she repeated her plan.
She began by giving this new Europe a name: a stability union, which would rest on four pillars. The first of these was that the new Europe would need a common policy for the financial markets, the second a common fiscal policy, the third a common economic policy and the fourth more democratic authority and control.
What Merkel was not quite so clear about was that behind this four-pillared structure lay her idea for a new division of powers in the EU – on one hand the community centred on Brussels, on the other the Europe of individual states.
In principle, heads of government had already agreed on pillar number one, although there was heated debate about the form that the supervision of the banks would take. A regulated financial market and joint supervision of the banks were part of a common financial policy, and with this came commonly agreed rules in the event that banks got into difficulty and needed
to be protected by the rescue plan. Merkel's second pillar, a common fiscal policy, had also taken hold: the fiscal compact had been concluded, and the Eurozone countries had signed up to more budget discipline. Yet what it still lacked was the right to take drastic measures. What would happen if a member state broke the stability pact and incurred all the possible sanctions? Merkel wanted to give the currency supervisor full powers – but she had yet to find sufficient support for that.
The genuinely revolutionary development came with the third pillar, the common economic policy. Her adviser, Meyer-Landrut, produced a key witness in the shape of the former President of the Commission, Jacques Delors, who is highly respected, especially among French Socialists. In 1989 he wrote a report on the dangers of currency union, in which he noted drily and succinctly: “A common currency calls for a high degree of consensus on economic policy as well as in a number of other political areas, especially fiscal policy.” Merkel hoped that the Socialist French President, François Hollande, would be unable to contradict that opinion. In her view, coordination of economic policy was necessary, particularly where it touches on questions of national sovereignty – in policies on the labour market and taxation. Because these, as the diagram drawn in September 2011 had illustrated, were the headaches.
Merkel immediately made it clear to her audience in the Bundestag that she was not keen to give more power to the European Commission. What had first to be taken into consideration was “the right of member states and their parliaments to self-determination and the scope to create their own structures”. Nonetheless, there had to be guidelines: more unity, more control, the right of a “European power” to intervene. Merkel didn't specify which European power she meant – that would become clear later. It could only be the new system of supervision that member states would create for themselves, far away from the Commission and the European treaties. And as something was needed to provide a stimulus, Merkel promised money. A new “solidarity element” would be created, perhaps funded by a tax on financial transactions, which countries in difficulty could use to finance projects to improve their competitiveness.
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