How Germany fared under Angela Merkel

Illustration of a hand holding a stamper

Marking Merkel

After 16 years in power, Angela Merkel plans to step down after Germany’s Sept. 26 federal election. Under her leadership, the country has gone from ‘sick man of Europe’ to economic powerhouse, but it remains deeply divided and the arrival of a wave of migrants in 2015 opened up new fissures.

How has Europe’s largest economy fared under her leadership?

Reuters examined a handful of Merkel’s key policies and determined how the measures progressed – or didn’t – in the 16 years since she became chancellor.

How is the economy under Merkel?

;

CHANGE IN GDP

SINCE 2005

60%

40

GERMANY 34%

20

FRANCE 19%

SPAIN 11%

UK 7%

ITALY 2%

0

-20

2005

2010

2015

2020

CHANGE IN GDP SINCE 2005

60%

40

GERMANY 34%

20

FRANCE 19%

SPAIN 11%

UK 7%

ITALY 2%

0

-20

2005

2010

2015

2020

CHANGE IN GDP SINCE 2005

60%

40

GERMANY 34%

20

FRANCE 19%

SPAIN 11%

UK 7%

ITALY 2%

0

-20

2005

2010

2015

2020

Source: World Bank
Note: GDP in current US dollars

Germany’s economy has grown by 34% since the start of Merkel’s tenure — 15 percentage points more than its nearest EU rival, France.

In addition to sound stewardship, some of this was thanks to good fortune: Under Merkel's rule, Germany has benefitted from strong demand in fast-growing economies like China for its high-end engineering goods.

Reforms made by her predecessor, Gerhard Schroeder, to reduce taxes, merge unemployment and welfare benefits and increase the flexibility of the labor market also paid dividends.

How is the employment market?

;

Inactive population decreased 3.4 million

14.5 million

11.1 million

UNEMPLOYED

dropped 3.2 million

5 million more were EMPLOYED in Germany since Merkel became chancellor in 2005

36 million

41 million

2005

2019

2005

36 million

14.5 million

2019

41 million

11.1 million

UNEMPLOYED

dropped 3.2M

Inactive population decreased 3.4M

5M more were EMPLOYED in Germany since Merkel became chancel lor in 2005

2005

36 million

14.5 million

2019

41 million

11.1 million

Inactive population decreased 3.4 million

UNEMPLOYED

dropped 3.2 million

5 million more were EMPLOYED in Germany since Merkel became chancellor in 2005

Source: Federal Statistical Office of Germany

Under Merkel, unemployment fell by more than 3 million. Merkel's governments have made extensive use of a "Kurzarbeit" short-time work scheme designed to avoid mass layoffs during downturns, including during the COVID-19 pandemic, by offering firms subsidies to keep workers on the payroll.

The Paris-based OECD said the plan saved close to 500,000 jobs during the 2009 downturn, and the International Monetary Fund has called it the "gold standard" of such programmes.

How is the export economy?

;

EXPORTS OF GOODS

AND SERVICES

$3 trillion

CHINA

$2.73T

US

$2.13T

2

GERMANY

$1.67T

1

JAPAN

$0.75T

FRANCE

$0.74T

0

2005

2010

2015

2020

EXPORTS OF GOODS AND SERVICES

$3 trillion

CHINA

$2.73T

US

$2.13T

2

GERMANY

$1.67T

1

JAPAN

$0.75T

FRANCE

$0.74T

0

2005

2010

2015

2020

EXPORTS OF GOODS AND SERVICES

$3 trillion

CHINA

$2.73T

US

$2.13T

2

GERMANY

$1.67T

1

JAPAN

$0.75T

FRANCE

$0.74T

0

2005

2010

2015

2020

Source: World Bank Note:
Note: Exports in current US dollars

Under Merkel, Germany increased its exports even as China and the United States dominated the global market.

However, Merkel's governments have grown wary of increased investment in critical sectors by Chinese state-owned enterprises. In response, they tightened rules to protect domestic firms from unwanted takeovers by investors from non-European Union countries.

How did migrants
affect population?

;

WITHOUT A MIGRANT BACKGROUND

MIGRANT BACKGROUND

2005

2019

0 – 5

5 – 10

10 – 15

15 – 20

20 – 25

25 – 30

30 – 35

35 – 40

40 – 45

45 – 50

50 – 55

55 – 60

60 – 65

65 – 70

70 – 75

75 – 80

80 – 85

85 – 90

90 – 95

over 95

years old

5

4

3

2

1

1

2

million

MIGRANT BACKGROUND

WITHOUT A MIGRANT BACKGROUND

In 2005

2019

0 – 5

5 – 10

10 – 15

15 – 20

20 – 25

25 – 30

30 – 35

35 – 40

40 – 45

45 – 50

50 – 55

55 – 60

60 – 65

65 – 70

70 – 75

75 – 80

80 – 85

85 – 90

90 – 95

over 95

years old

5

4

3

2

1

1

2

million

MIGRANT BACKGROUND

WITHOUT A MIGRANT BACKGROUND

In 2005

2019

0 – 5

5 – 10

10 – 15

15 – 20

20 – 25

25 – 30

30 – 35

35 – 40

40 – 45

45 – 50

50 – 55

55 – 60

60 – 65

65 – 70

70 – 75

75 – 80

80 – 85

85 – 90

90 – 95

over 95

years old

1

5

4

3

2

1

2

million

Source: Source: Federal Statistical Office of Germany
Note: Persons have a migrant background if they or at least one parent did not acquire German citizenship by birth.

Unwilling to use force to stop a torrent of refugees heading for Germany, and determined to avoid a humanitarian catastrophe, Merkel decided to keep the country’s borders open.

Many view this as perplexing after her declaration back in 2010 that multiculturalism in Germany had been an abject failure. But by 2015, Germany was in a strong enough economic position to welcome the refugees and Merkel had the political capital to make it happen, telling the country: "We can do this!"

From 2005 to 2019, Germany’s non-migrant population under the age of 50 decreased. But Merkel’s tenure saw through a population boost from the migrant population across all age groups.

How do generations feel about Merkel?

;

MERKEL’S

APPROVAL

RATINGS BY

GENERATION

80%

60

Baby Boomers

1946-1964

Gen Xers

1965-1980

40

Gen Zers

1997-2012

Millennials

1981-1996

20

0

2020

2021

MERKEL’S APPROVAL RATINGS BY GENERATION

80%

60

Baby Boomers

1946-1964

Gen Xers

1965-1980

40

Gen Zers

1997-2012

Millennials

1981-1996

20

0

2020

2021

MERKEL’S APPROVAL RATINGS BY GENERATION

80%

60

Baby Boomers 1946-1964

Gen Xers 1965-1980

Gen Zers 1997-2012

Millennials 1981-1996

40

20

0

2020

2021

Source: Morning Consult

Merkel is regularly ranked Germany’s most popular politician. In August 2021, Merkel’s approval was highest among older Baby Boomers (57%), followed by Gen Xers (53%).

Since tracking began in 2019, Baby Boomers consistently have the highest approval rating for Merkel, but amid the first months of the pandemic (December 2020 to April 2021), Gen Z’s approval tied and briefly pulled ahead of the older generation, although their support later waned, data from Morning Consult shows.

How do Germany’s peers feel about Merkel?

;

SPAIN’S CONFIDENCE IN MERKEL reached a high of 86% in 2021, up 49 percentage points since 2006.

100%

GERMANY

75

50

25

0

2010

2015

2020

100%

FRANCE

75

50

25

0

2010

2015

2020

100%

75

UK

50

25

0

2010

2015

2020

100%

75

US

50

25

0

2010

2015

2020

SPAIN’S CONFIDENCE IN MERKEL reached a high of 86% in 2021, up 49 percentage points since 2006.

100%

GERMANY

75

50

25

0

2010

2015

2020

100%

FRANCE

75

50

25

0

2010

2015

2020

100%

75

UK

50

25

0

2010

2015

2020

100%

75

US

50

25

0

2010

2015

2020

SPAIN’S CONFIDENCE IN MERKEL reached a high of 86% in 2021, up 49 percentage points since 2006.

100%

GERMANY

FRANCE

75

50

25

0

2010

2015

2020

2010

2015

2020

100%

75

US

UK

50

25

0

2010

2015

2020

2010

2015

2020

SPAIN’S CONFIDENCE IN MERKEL

reached a high of 86% in 2021, up 49

percentage points since 2006.

100%

FRANCE

GERMANY

75

UK

US

50

25

0

2010

2015

2020

2010

2015

2020

2010

2015

2020

2010

2015

2020

SPAIN’S CONFIDENCE IN MERKEL

reached a high of 86% in 2021 up 49

percentage points since 2006.

100%

FRANCE

GERMANY

75

UK

US

50

25

0

2010

2015

2020

2010

2015

2020

2010

2015

2020

2010

2015

2020

Source: Pew Research Center

Merkel's standing abroad has grown during her time in office. She won respect internationally for her 2015 decision to leave Germany's borders open to 1 million migrants fleeing war and poverty in the Middle East and was widely seen as the West's last great hope for liberal democracy when Donald Trump entered the White House in 2017.

On the downside, she has failed, by any reasonable measure, to achieve the goal she set her government in 2005 of "ensuring that the modernization process in Russia succeeds", as the relationship between Russia and the West cooled after several crises, including Russia's invasion of Georgia in 2008 and the annexation of Crimea in 2014.

Where does the East-West divide stand?

;

Disposable income

per inhabitant, 2018

€15,000

€36,000

Berlin

The former East-West divide highlights the split between the average higher earnings in the West and the lower in the East.

Disposable income

per inhabitant, 2018

€15,000

€36,000

Berlin

The former East-West divide highlights the split between the average higher earnings in the West and the lower in the East.

Disposable income per inhabitant, 2018

€15,000

€36,000

Berlin

The former East-West divide highlights the split between the average higher earnings in the West and the lower in the East.

Source: Federal Statistical Office of Germany

Income inequality divides the East and the West.

After cash injections of 2 trillion euros ($2.36 trillion) over three decades, the East’s economic output per capita is still three quarters of western German levels. Merkel's government has encouraged high-tech hubs in the eastern cities of Berlin, Potsdam, Leipzig, Dresden and Jena.

The unemployment rate in the east reached a new record low in 2018, falling to 6.9%. However, this figure was still much higher than the 4.8% recorded in the west.

How has climate change been addressed?

;

ENERGY

CONSUMPTION

IN THE EU

4,000 TWh

GERMANY

3,000

FRANCE

2,000

ITALY

SPAIN

1,000

SWEDEN

FINLAND

0

10

20

30

40

50

60

70%

PERCENTAGE OF RENEWABLE ENERGY

ENERGY CONSUMPTION

IN THE EU

4,000 TWh

GERMANY was the EU’s highest energy-consuming member state in 2019 — only 23% of that energy came from renewable sources.

3,000

FRANCE

2,000

ITALY

SPAIN

1,000

SWEDEN

FINLAND

0

20

70%

10

30

40

50

60

PERCENTAGE OF RENEWABLE ENERGY

ENERGY CONSUMPTION IN THE EU

4,000 TWh

GERMANY was the EU’s highest energy-consuming member state in 2019 — only 23% of that energy came from renewable sources.

3,000

FRANCE

2,000

ITALY

SPAIN

1,000

SWEDEN

FINLAND

0

10

20

30

40

50

60

70%

PERCENTAGE OF RENEWABLE ENERGY

Source: Our World In Data.
Note: Malta data not available

Germany still gets more than three-quarters of its energy from fossil fuels.

Merkel's government has spurred a shift toward renewable energy sources such as wind and solar power with planned exits from nuclear power by 2022 and coal-fueled power sources by 2038. However, critics including the opposition Greens say it is moving too slowly to achieve greenhouse gas neutrality.

Merkel has also enabled construction of the Nord Stream 2 gas pipeline to bring Russian gas to Germany.

Where is the digital revolution?

;

PERCENTAGE OF GERMAN COMPANIES STILL USING FAX MACHINES

2016

79%

2021

43%

PERCENTAGE OF GERMAN COMPANIES STILL USING FAX MACHINES

2016

79%

2021

43%

PERCENTAGE OF GERMAN COMPANIES STILL USING FAX MACHINES

2016

79%

2021

43%

Source: Bitkom survey of over 500 companies with 20 or more employees in Germany

Germany has been slow to embrace digitalization. Four out of 10 companies still use fax machines frequently to communicate within the company and externally.

Digitalization requires high speed internet, but Germany ranks 34th out of 38 industrialised economies for fast internet connections, OECD data show.

Bureaucracy is part of the problem. In an effort to speed up the high speed internet rollout and to champion Germany's adjustment to the digital age, Merkel appointed Bavarian politician Dorothee Baer as her first Minister of State for Digital Affairs.

Where do German students rank?

;

GERMANY’S average

PISA scores

of 15-year olds

510

GERMAN SCIENCE

scores down 2.5%

500

490

OECD AVERAGE

2006

2018

500

GERMAN MATH

scores down 0.8%

490

2006

2018

500

GERMAN READING

scores up 0.6%

490

2006

2018

GERMANY’S average PISA scores of 15-year olds

GERMAN SCIENCE

scores down 2.5%

510

GERMAN MATH

scores down 0.8%

GERMAN READING

scores up 0.6%

500

490

OECD AVERAGE

2006

2018

2006

2018

2006

2018

average PISA scores of 15-year olds

GERMAN SCIENCE

scores down 2.5%

510

GERMAN MATH

scores down 0.8%

GERMAN READING

scores up 0.6%

500

490

OECD AVERAGE

2006

2018

2006

2018

2006

2018

Source: Organisation for Economic Co-operation and Development

At secondary level, German schools failed to make progress on Program for International Student Assessment (PISA) scores, an OECD study which assesses the reading, mathematics and scientific skills of 15-year-olds around the world.

German students on average remained steady or declining from 2006 to 2018. Math and science scores followed the downward trend of the OECD average, although German reading scores saw a slight uptick.

What does the political landscape look like?

;

Two parties, centre-right CDU/CSU and centre-left SPD, have dominated each German post-war election ...

50%

1949

CDU/CSU

SPD

FDP

1953

1957

1961

1965

1969

1972

1976

1980

1983

1987

1990

1994

1998

2002

2005

2009

2013

2017

GREENS

LEFT

AfD

... but polls as of Sept. 11 show a fragmented landscape with far-right AFD and parties from the other side of the political spectrum, the GREENS and the LEFT, gaining traction.

2021

Two parties, centre-right CDU/CSU and centre-left SPD,

have dominated each German post-war election ...

50%

1949

FDP

CDU/CSU

SPD

1953

1957

1961

1965

1969

1972

1976

1980

1983

1987

1990

1994

1998

2002

2005

2009

2013

2017

GREENS

LEFT

AfD

... but polls as of Sept. 11 show a fragmented landscape with far-right AFD and parties from the other side of the political spectrum, the GREENS and the LEFT, gaining traction.

2021

Two parties, centre-right CDU/CSU and centre-left SPD,

have dominated each German post-war election ...

50%

1949

FDP

CDU/CSU

SPD

1953

1957

1961

1965

1969

1972

1976

1980

1983

1987

1990

1994

1998

2002

2005

2009

2013

2017

GREENS

LEFT

AfD

... but polls as of Sept. 11 show a fragmented landscape with far-right AFD and parties from the other side of the political spectrum, the GREENS and the LEFT, gaining traction.

2021

Source: Parlgov; Reuters poll aggregate of data from wahlrect.de

Immigration, de-industrialisation, and climate change have challenged Merkel's conservative CDU/CSU alliance and the centre-left Social Democrats, who dominated post-war German politics until these trends fuelled the rise of the far-right Alternative for Germany (AfD) and the ecologist Greens.

By

Michael Ovaska and Paul Carrel

Edited by

Jon McClure, William Maclean

;