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One-Eyed Man Needs Merkel to Earn Global Love: Miriam Meckel

Sept. 10 (Bloomberg) -- If German Chancellor Angela Merkel hoped for some international recognition for her country’s role as the economic powerhouse of the European Union, she didn’t get it. And she only has herself to blame.

Germany posted an economic-growth rate of 2.2 percent in the second quarter. As many countries struggle with high unemployment rates that prevent any economic optimism, EU figures provided undeniable evidence: Without Germany, Europe would have fallen short of the 1 percent rate considered the Maginot Line against a double-dip recession.

Yet we only read about the negative aspects of Germany’s unexpected economic growth. It speaks volumes about the reputation Germany suffers from in the international media.

In the Financial Times last month, Michael Pettis warned of a global trade war and said “responsible leaders must make every effort to rebalance trade.” Germany wasn’t explicitly mentioned, but it was clear for whom the bell tolled.

Harvard University professor Niall Ferguson and hedge-fund investor George Soros have also weighed into the same argument with similar views about Germany’s large trade surplus. Deutsche Bank AG Chief Economist Thomas Mayer has defended the nation’s exporters, describing them as the “crown jewels.”

Beast, Not Beauty

The country is stuck in a vicious cycle of either deliberate or involuntary negative judgment. Whatever the economic figures may prove, Germany is the beast, not the beauty, even when it comes to exceeding expectations in a manner most favorable to other European countries’ interests in escaping the “Bermuda triangle” of sovereign debt, demographic decline and lower growth.

Why so? There are arguments to support the skepticism.

First, Germany has become part of the global market economy while going through stringent times. But the German people are still afraid of globalization: They would rather save their money than spend it. That’s why the current growth isn’t based on a balanced set of increased production, consumption and exports. It’s mostly the latter that accounts for the 2.2 percent. And as an economically timid people all too eagerly strives to be on the safe side, the government all too supportively exerts itself to this end.

Second, Germany has to deal with its unique situation. The country has struggled with its reunification for 20 years and has spent hundreds of billions of euros to support economic recovery in the eastern states. And still Germany has to face vast disparities on the two sides of the former border.

National Focus

Since this is a major political challenge for state elections, German politicians have focused on national more than international issues in their campaigns. Germany’s media image abroad has suffered accordingly.

During the bumpy times of the 2008 financial crisis, Merkel’s government tried to force stronger regulations on banks and hedge funds globally while being confronted with obvious examples of bad banking at home. Germany’s banks were among the world’s biggest gamblers in toxic assets, with the state-controlled “Landesbanken” probably being the largest financial toxic-waste dumps on Earth. It was a bad omen for a leadership strategy of saving the world through German virtues, which the media in the U.K. and the U.S. pointed out.

The real blame game started earlier this year when the sovereign-debt crisis hit Europe and forced the EU and the International Monetary Fund to release 110 billion euros ($140 billion) in unprecedented rescue loans to Greece to prevent incalculable damage across the euro area.

Merkel’s Foibles

That would have been the right time for Merkel to provide evidence of Germany’s leadership. But she didn’t. Merkel tried to buy time, hesitant to make the right and necessary decisions. Instead, she played the crisis down at home, afraid that it might interfere with state elections.

Merkel has never really managed to explain to German citizens that helping Greece was in their own interests. That a collapse in Greece wouldn’t just be a major threat to the European currency, economy and political integration, but that it would affect the German economy badly in many ways. Instead she allowed public opinion to result in political hesitation.

It’s not just the economy, it’s also perception. For perception is reality as every politician involved with global media coverage should be aware. If Merkel wants to regain her leadership role in international diplomacy and crisis management, she has to do more than tepidly deal with the most pressing problems at home while stoically waiting for salvation from somewhere else.

Stony Path

She also has to stop anxiously peering at any sign of discontent within her electorate or among European neighbors. Instead she needs to clearly tell her people what’s going on and why some decisions have to be made, even if they won’t please everybody. That’s the only way to change how Germany is perceived and portrayed by the international media.

If Merkel decides not to walk this stony path, Germany will be criticized even more harshly. A newspaper in Switzerland commented on the unexpected growth figures by describing Germany as a one-eyed man among the blind. As such it is still ahead of the pack. But if the one eye is occupied with self-observation, you are rendered blind nonetheless.

(Miriam Meckel is the managing director of the Institute for Media and Communications Management at the University of St. Gallen in Switzerland, and a faculty associate at the Berkman Center for Internet and Society at Harvard University. The opinions expressed are her own.)

To contact the writer of this column: Miriam Meckel at miriam.meckel@unisg.ch

To contact the editor responsible for this column: James Greiff at jgreiff@bloomberg.net

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