How to become a corporate diplomat as a new CEO
One of the trickiest tasks for new CEOs can be learning how to engage with the media, government and other key stakeholders. We provide seven organizing principles to help CEOs effectively shape...
Leadership
Auf Wiedersehen Angela Merkel, what will we do without you?
Merkel made mistakes but she was a rock of stability in turbulent times, and the good news is that her legacy of German stolidity is likely to continue.
Since Otto von Bismarck, nobody has ruled Germany longer than Angela Merkel or Helmut Kohl. The prince is remembered as the first unifier of Germany, who pounded 25 states and statelets into the new Reich with “blood and iron” in 1871. Kohl entered history as the father of Unification 2.0 in 1990. Not a shot was fired.
Kohl’s achievement looms even larger when comparing his achievement with Bismarck’s. When Bismarck left the stage in 1890, the Wilhelmine Empire – too big for Europe, too small to dominate it – began to slither into the Great War by challenging Britain, France and Russia, uniting them against this fearsome upstart.
So, Kohl did better than Bismarck. His Germany did not turn into the “Fourth Reich” as so many imagined 30 years ago. Instead, it was peace über alles, with Germany submerging itself in Europe and pulling the sting of its rising power.
How does Merkel stack up after 16 years? She gets good grades for following in the footsteps of Kohl, her mentor. Though Europe’s number one economy, the Federal Republic has confounded the anxious. Great power has not bred ambition, but responsibility. Instead of polishing jackboots, the new Germans celebrate their “culture of reticence” in matters military. By 2013, an international poll by the BBC anointed Germany as the world’s “most positively viewed” nation.
The international media celebrated Merkel as “queen” or “empress” of Europe. She kept a steady hand on the tiller, changing course by just a few degrees to the left or the right while reflexively plumbing the depths for perilous shallows. Domestically, she did not always do as well. Future historians might stick her with three miscalculations and one nasty blow against her own party, the Christian Democrats, which had dominated German politics for decades.
Misstep one followed the nuclear disaster in Fukushima in 2011, caused not by a meltdown, but by the tsunami that killed 2,200 Japanese. Though radiation would claim only one life, Merkel panicked and ordered the successive closure of all German nuclear plants in favor of renewables. The price of the Energiewende thus far? Germany’s electricity rates are the highest in Europe, but it is still by far the largest CO2 emitter in Europe.
A hard act to follow: Angela Merkel has cast a huge shadow over political life in GermanyMisstep two came in 2015, when Merkel opened her country to a million refugees and migrants from the Middle East. Here the price was the rise of the ultranationalist Alternative for Germany (AfD) – an unprecedented victory of the extreme Right.
Misstep three involved the euro, when the Empress finally caved by withdrawing the knout of financial discipline, the first commandment of German monetary policy. On her watch, Euroland turned into a debt community that spared the wayward harsh internal reforms. So the Italians and Greeks now cheer their erstwhile arch-enemy Merkel. Worse, the European Central Bank kept interest rates near zero, allowing each and all to splurge. This is one, though not the only, cause of inflation unshackled.
Finally, this cold-eyed power politician, also known as “Mutti” (Mom), decimated her own party by eliminating any possible successor, toppling or sidelining all candidates. No wonder that her rudderless Christian Democratic Union crashed in the September general elections. Once good for 50% of the vote, the party was reduced to just below 25% in the September election. By November, opinion polls put the party at 21%, marking the further decline of the CDU. All told, future historians may not celebrate Mutti’s 16-year tenure.
What legacy will this leader leave? Fear not. The three-party coalition cobbled together in the final days of November will not challenge the miraculous stability of postwar Germany. Since the days of Adenauer, the country has become continuity incarnate. This is not the Germany we think we know when recalling its imperialist career in the 20th century.
Responsible citizens of Europe the Kaiser and Der Fuhrer were not; they dreamed of subjugating it. Such types don’t live here anymore. To stay in harness, the motley coalition of Social Democrats, Greens and Free Democrats will have to practice compromise and thus gravitate toward the center. Otherwise, the threesome will fall apart. That’s the curse – or blessing – of multiparty government. No wild swings as in the American two-party system lurching from Obama to Trump and back to Biden.
Continuity is a safe bet for Europe and Berlin’s allies in Washington and London. Germany ’22, thy name is “Lowest Common Denominator,” hence neither breakout nor foot-stomping. This LCD is not flimsy. All the coalition partners, whatever their hue, want to save the planet. The Greens and the Reds (the color of the Social Democrats) want to soak the rich a bit, but not too much.
Fear not. The three-party coalition cobbled together in the final days of November will not challenge the miraculous stability of postwar Germany- Author Name
The Free Democrats (Yellow) don’t want to raise taxes, but the new government knows the benefits of “Modern Monetary Policy” that stands for unlimited funds at close-to-zero interest rates. Why tax if you can borrow for free? So, there will be enough for the welfare state that has been on a roll since the crash of 2008.
Foreign policy may be trickier. Merkel often went easy on Putin’s Russia, pushing for the completion of Nord Stream 2 pipeline. The Greens, once the party of pacifism, are harsher on the Kremlin, arguing against the gas duct and condemning Moscow and China on human rights. The “Reds” harbor a strong pro-Moscow faction, that refuses to spend more on defense and wants to pull the Luftwaffe out of NATO’s nuclear sharing arrangement. They will have to yield to the new chancellor Olaf Scholz, a centrist Social Democrat, who knows that NATO is the backbone of German security policy.
So, zero in on the pillars of German diplomacy. The country in the middle naturally seeks good relations with each and all, and to balance commitments. Give unto America, but don’t take too much from Russia, though it is becoming ever more menacing. Berlin’s language will sound a bit harsher, but Nord Stream 2, though halted by the regulators on formal grounds, will surely be completed to avoid billions in damage to the consortium. Defense spending will creep up, but Berlin will not bestride the world as a strategic player and so stumble into harm’s way. It will push the European project without sacrificing the core of German sovereignty. It will try to anchor post-Brexit Britain in Europe while safeguarding the fabled “Franco-German Couple”.
Geography, to crib from Prof. Freud, is destiny, and history has taught the Germans that ambition breeds disaster. So, Europe may count its blessings. Safely embedded, Germany is not an adventurer, but an anchor. Stability-cum-continuity is the happy news in troubled times.
Authors
Related
Fake it though you’ve made it: battling leader impostorism
Successful, but feeling like a fraud? You’re not alone, it’s an emotion shared by the great and the good, from Michelle Obama to Jacinda Ardern. Here’s how to tackle it. ...
Why you must move fast to get the right team in place
Newly appointed CEOs and other senior leaders must concentrate their energy on getting the right people around them, as failure to act quickly will have serious consequences. ...
Develop the skills needed to be an agile, modern leader
Today’s world calls for agile and collaborative leadership and the good news is that the essential toolkit needed is available to all. ...
Learn Brain Circuits
Join us for daily exercises focusing on issues from team building to developing an actionable sustainability plan to personal development. Go on. They only take five minutes.
Explore Leadership
What makes a great leader? Do you need charisma? How do you inspire your team? Our experts offer actionable insights through first-person narratives, behind-the-scenes interviews and The Help Desk.
Join Membership
Log in here to join the conversation with the I by IMD community. Your subscription grants you access to the quarterly magazine plus daily articles, videos, podcasts and learning exercises.