Stephan Werhahn remembers playing at the feet of his grandfather as a child. The man was a towering figure in more ways than one. Lionized as Der Alte, or the Old One, Konrad Adenauer was West Germany’s first postwar chancellor, a founder of the Christian Democratic Union (CDU) political party and an early proponent of European unification.
At 59, Werhahn is adding politics to a 30-year career in finance by running against Chancellor Angela Merkel in an election scheduled for Sept. 22, Bloomberg Markets will report in its April issue. Werhahn says he’s doing his bit to protect his grandfather’s greatest legacy, the European Union.
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Although polls give Werhahn no chance of winning, his presence in the race is another indication of the extent to which Merkel’s stance on Europe has shaped Germany’s domestic politics.
Werhahn says Merkel’s imposition of austerity measures on debtor nations such as Greece threatens to wreck the single currency and the EU.
“The good idea of Europe is being ridden to death,” he says.
Werhahn’s proposed resolution to the crisis is harsh in its own way: He would forgive most of the money owed by Greece and other debt-choked countries and then banish them from the euro area in order to save the single currency.
Werhahn -- who quit the CDU last year after four decades as a member and joined a small, anti-bailout party, the Freie Wahler, or Free Voters -- is taking on Merkel and her European policies at a time when economic data suggest she should be politically vulnerable.
The Bundesbank, the German central bank, lowered its outlook on Dec. 7, forecasting that the German economy will expand 0.4 percent this year and 1.9 percent in 2014. Growth in the fourth quarter of 2012 fell by 0.6 percent.
Still, Germany remains the strongest of Europe’s major economies. In January, the jobless rate hit 6.8 percent, its lowest point in two decades.
Germany has paid a steep price to keep the euro zone intact.
As Europe’s largest economy, Germany is by far the biggest donor, in the form of loans and guarantees, to the 486 billion euros ($636 billion) in European and International Monetary Fund bailout funds for Greece, Ireland, Portugal and Spain as of Feb. 11.
As of June 26, 2012, the total German contribution amounted to 310.3 billion euros, according to Deputy Finance Minister Steffen Kampeter.
And yet Merkel appears to be on safe political ground. The first bailout for Greece, in the spring of 2010, sent the approval rating of her Christian Democratic bloc plummeting to a low of 29 percent in a poll published on July 28, 2010, by the Forsa Institute for Social Research and Statistical Analysis.
Since then, her political fortunes have experienced a revival even as she persisted in her austerity-led response to the euro mess. With the crisis ebbing, her bloc’s backing rose to a near-all-time high since she came to power in 2005 of 41 percent in a Feb. 6 Forsa survey before falling to 40 percent in a Feb. 27 poll.
Merkel’s stolid, steady response to the debt emergency along Europe’s southern flank has proven popular, according to Manfred Guellner, head of Berlin-based Forsa.
“The euro crisis is the most important reason for her high approval ratings,” he says. “She conveys to people that she shares their worries. She has put up a little umbrella that makes people feel the crisis won’t smack them on the head.”
Before the crisis, her cautious leadership and modest personal style might have made her look stuffy and out of touch, he says.
“Now,” Guellner says, “these are seen as virtues.”
Political threats to the chancellor come less from euro-related matters than from other quarters: the weakness of her coalition partner, the somewhat rudderless Free Democrats; the charge, pressed by the opposition Social Democrats, that Merkel has presided over a widening rich-poor gap; and her U-turn on nuclear power after the Fukushima reactor meltdown in Japan in March 2011.
Merkel’s decision to phase out nuclear power generation -- reversing her pro-nuclear re-election platform of 18 months earlier -- was her biggest misstep, Guellner says. The move did more than send consumer power bills climbing to subsidize sources of renewable energy such as wind and solar.
“It dented her credibility because people viewed the shift as unnecessary and opportunistic and wondered whether it would all work,” Guellner says.
Nonetheless, Merkel and the CDU now seem headed for victory, Guellner says, adding that he can’t imagine an event that would derail her electoral chances at this point.
Merkel has come through a lot.
She resisted political pressure from her Free Democratic partners and Germans generally to be even tougher on Greece.
After some hesitation -- there were times when Merkel seemed prepared to see the euro zone split up -- she came out with rhetoric in synch with that of European Central Bank President Mario Draghi, who declared last summer that the bank was ready to do “whatever it takes” to preserve the single currency.
Her commitment reassured her European partners, who fretted that the chancellor might bow to German public opinion and sacrifice the euro to save her political skin.
Even once-skeptical Germans give her points for resoluteness. After three years of crisis and massive bailouts, the German public remains solidly pro-EU. Asked in January after U.K. Prime Minister David Cameron gave a speech demanding “a better deal for Britain” in “a leaner, less bureaucratic” EU, 65 percent of Germans polled by Infratest Dimap said they backed more European integration, not less.
Up against the Merkel juggernaut, Werhahn’s Free Voters crusade seems a quixotic one.
The FW is so small that it barely registers on the national level in German politics. It’s at best a work in progress; its clout is limited largely to Bavaria, where party members hold about a third of all mayoralties and have 20 out of 187 seats in the state parliament.
“The party resembles a big construction site at the national level,” says David Bebnowski, a political scientist at the University of Goettingen’s Institute for Democracy.
Furthermore, the euro crisis has cooled a bit since Merkel and Draghi made their stands in favor of protecting the common currency. Werhahn and the FW could appear to be sounding an alarm with little cause to do so, says Jan Techau, director of the Brussels center of the Carnegie Endowment for International Peace.
“This means it won’t mobilize as many voters for them,” he says.
Werhahn counters that the FW is not a single-issue party and can still make political waves ahead of the elections. The FW has a long history of opposition to nuclear energy and of increasing government spending to provide free child-care facilities nationwide.
State elections will be held in Bavaria shortly before the national ballot, and the FW may emerge as a kingmaker in the state by joining forces with the ruling Christian Social Union, a sister party to Merkel’s CDU.
If the FW formed part of a Bavarian coalition, it would have a voice in the Bundesrat, or upper house, that represents Germany’s 16 federal states at the national level in Berlin.
Were that to happen, or if the FW improbably won seats in the law-making lower house in Berlin, Werhahn says his party would at least have a shot of publicizing its message.
“We’ve got a chance of getting into the Bundestag and spotlighting the defects in dealing with the euro crisis,” he says.
In electoral terms, it helps that the FW’s messenger-in-chief has an impressive pedigree. As a descendant of the postwar Federal Republic of Germany’s founding father -- Adenauer was chancellor from 1949 to 1963 -- Werhahn has drawn intense media interest.
Growing up in Neuss, a town founded by Romans on the Rhine near what is now Dusseldorf, gave Werhahn a strong sense of European history, which he complemented by studying Latin and Greek and playing the cello, he says.
He studied law at the University of Goettingen and received a master’s degree in foreign service at Georgetown University in Washington.
During his time in the U.S., he obtained a commercial pilot’s license and flew 800 hours in both twin- and single-engine planes.
Werhahn is a partner at General Capital Group, a Munich-based investment fund adviser. He calls himself “a working man,” one who isn’t wealthy enough to leave his job to run for public office.
Earlier in his career, he worked at Robert Bosch GmbH, Siemens AG and Stuttgart-based Landesbank Baden-Wuerttemberg. Werhahn was 14 years old when Adenauer died in 1967 at the age of 91. He didn’t consider going into politics until early 2012.
“I was fed up,” he says. “My gut feeling was that things were going totally wrong and that the vision of my grandfather for Europe was going down the drain.”
There was a time during the 23 years since the fall of the Berlin Wall and the collapse of communism that Germany grappled with economic malaise and unemployment -- so much so that the country became known as “the sick man of Europe.”
Today, the patient is in relatively robust health. In defending his grandfather’s legacy, Werhahn says the EU’s weakest states shouldn’t be allowed to take Germany down with them.
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