When Olaf Scholz was sworn in as German Chancellor yesterday in the Reichstag building, the second-longest chancellorship since that of Otto von Bismarck came to an end. Angela Merkel’s former finance minister of the Social Democratic Party has succeeded in forming a government with the Green Party and the Liberals. The new coalition’s treaty suggests that there’s a chance that Scholz could distance himself from the economic policy framework that held sway under his predecessor — one that supposedly heightened Germany’s economic clout and stability. To understand why, one must look more closely at how that framework actually shaped Germany’s — and Europe’s — fortunes during the Merkel era.

A good place to start might not be Berlin, but London. It was here, in early April 2009, that the leaders of the G20 held their second summit, in a drab convention center not far from many of the banks that had brought about the global crisis that the assembled heads of state were now frantically trying to address.

The then British prime minister Gordon Brown and Barack Obama sought to apply pressure on Merkel and French president Nicolas Sarkozy to secure a further round of fiscal stimulus in Europe. It had to be large and be comprised of mostly new discretional spending, rather than just automatic stabilizers (such as unemployment insurance) and tax cuts. Also on the table were a raft of reforms aimed at stabilizing the global financial system and addressing global trade imbalances.