According to the world famous ranking published by Forbes magazine last week, Putin, Merkel and Obama (in that order) are currently the most powerful people in the world. This ranking says a great deal about, as well as going a long way towards explaining, why the world has been rocked by serious crisis after serious crisis over the last few years without any real prospect of lasting solutions on the horizon.
Obama is without a doubt one of the weakest presidents in US history. He may be an excellent public speaker and political campaigner, but the fact that he is so resistant to outside advice makes him a poor president indeed. There is an excellent book that I cannot recommend highly enough, aptly titled “The Amateur,” which paints an unsparingly honest picture of Obama: http://www.zitelmanns-book-reviews.com/2012/09/barack-obama-the-amateur/.
Following his election in 2008, many hailed Barack Obama as a political messiah. He was awarded the Nobel Peace Prize even before he had actually achieved anything. In Germany he has largely been able to retain his positive image. The exact opposite is true back home in the United States, where he not only attracts extreme criticism from Republican sympathisers, but also from a large number of his former supporters. Hillary Clinton is one of his severest critics. She has been very clear on why she couldn’t serve longer as Obama’s Secretary of State. His administration’s policy towards Syria, which she sharply criticised last year, is just one example of Obama’s total failure to deliver on his earlier promises.
Putin’s strengths simply serve to reflect Obama’s weaknesses. Putin is a ruthless, power-hungry politician who has coldly exploited Obama’s failings in his pursuit of an aggressive and expansionist foreign policy. As far as Russia’s economy is concerned, Putin has delivered very little. Russia is still a country in which corruption thrives, dependent almost exclusively on oil and gas.
And Merkel? Although she talks more about “sustainability” than any German Chancellor before her, the policies she has enacted have delivered exactly the opposite. The long-term problems created by Merkel’s misguided policies, such as her approach to rescuing the Euro and her mismanagement of the energy transition and mass migration of refugees, are going to place tremendous burdens on Germany and its future generations.
I actually cannot think of another German Chancellor with a worse record. Adenauer fought hard for to establish West German post-war sovereignty and – along with his successor Ludwig Erhard – to establish market economics. Willy Brandt initiated a process of reconciliation with our eastern neighbours. Helmut Schmidt pushed Nato’s double-track decision of 1979 through against the wishes of his own party, one of the key factors in the later collapse of the Soviet Union. Helmut Kohl made the most of the opportunities presented by German reunification and Gerhard Schröder, with his Agenda 2010 – also in the face of considerable opposition from within his own party’s ranks – made Germany competitive once more and established the foundations of Germany’s current economic strength. Schröder actually contributed more to today’s positive economic climate than Merkel has since she took over the reigns.
What has Angela Merkel achieved? Together with her SPD coalition partners, She has rolled back some of Schröder’s key reforms, extended the reach of the state (minimum wage, Mietpreisbremse rent cap, etc.) and failed to introduce a single forward-looking reform of her own. Instead, with a series of legally questionable decisions, she has created a series of massive problems for Germany’s future.
Above all, Merkel’s chancellorship has become synonymous with three (supposedly “inevitable”) decisions, each of which will cost tens to hundreds of billions:
- Greek bailout: Greece has been bankrupt for ages, even if the fact is not acknowledged by officials. The renowned Ifo Institute and the Institute of German Economics (IW) have both calculated the costs of saving the Euro. The Ifo Institute estimates the cost of a Greek default at €89 billion. The IW places the costs at €80 billion.
- Refugee policy: Also based on calculations from the Ifo Institute, the refugee crisis will cost Germany €10 billion in this year alone. The figure is based on the arrival of 800,000 refugees; in reality the final figure is likely to be considerably higher.
- Energy transition: A whole range of estimates have been published on the costs of the energy transition. The current Chancellery Minister Altmaier mentioned a figure of €1 trillion in February 2013. The figure on the government’s website is much lower, “Investment of up to €550 billion will be required for the energy transition by the middle of the century.” An IW study reveals that electricity consumers alone are forking out €28 billion a year for the energy transition.
The three decisions that have led to these costs are all linked with serious legal breaches:
- Greek bailout: Numerous contractual provisions have been violated, in particular the Maastricht Treaty’s prohibition on economic bailouts and the contracts that established the ESM rescue package.
- Refugee policy: For months now there have been almost daily violations of established law, in particular against the provisions of the Dublin Agreement, which are still legally valid.
- Energy transition: Decommissioning Germany nuclear power stations in the wake of the Fukushima catastrophe was unlawful. This fact has since been confirmed by Germany’s highest court.
Forbes latest list of the world’s most powerful people is a depressing affair. My mind is drawn back to the days when Ronald Reagan and Margaret Thatcher were the most influential politicians on the international stage. Politicians like these, with strong principles and policies that shaped the future, are sadly nowhere to be found today.
Read also Rainer Zitelmanns Finance Blog.