Germany’s Model for European Capitalism Is Exhausted
Through Angela Merkel’s reign, neoliberal European integration provided the scaffolding for Germany’s export-led growth. But war on the continent and a series of crises have tested this model’s limits, producing splits within Olaf Scholz’s government.
Germany’s chancellor Olaf Scholz talks to the press as he arrives for the first day of a summit at the European Council Building in Brussels on July 17, 2023. (Emmanuel Dunand / AFP via Getty Images)
When liberal big hitters like the Economist, Der Spiegel, Politico, or the Financial Times scramble to bury your political legacy by bewailing your “missed opportunities,” you might be forgiven for taking it a bit personally. That’s especially the case if your name is Angela Merkel and you still cling to that old issue of Time hailing you as “Chancellor of the Free World.”
Merkel’s sixteen-year tenure at the helm of Germany showcased a European brand of impassible neoliberal resilience. Her long reign perfected the art of papering over a seemingly endless doom loop spanning the global financial meltdown, the European debt crisis, Syriza’s referendum, the 2015 refugee crisis, Brexit, Donald Trump, and COVID-19.
As if on cue, political drama erupted as soon as she left the stage in late 2021: Vladimir Putin invaded Ukraine, Germany’s export-led capitalism hit a wall, and its political system now seems ungovernable. More broadly, the European political consensus that once stood behind the continent’s neoliberal integration is today in a shambles.
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