Econ_April_14

The Economist

April 14th 2018

INCE the fall of the Berlin

Wall the

Ampelmännchen

the jaunty, behatted “little traf-

fic-light man” of communist

East Germany, has escaped his

dictatorial roots to become a

kooky icon ofGermany’s trendy

capital. Tourists pose with life-

size models and snap up memorabilia in souvenir shops. The

Ampelmännchen

’s quirky coolness is an increasingly apt sym-

bol of the country aswell as its capital. As our special report in

this issue describes, Germany is entering a new era. It is be-

comingmore diverse, open, informal and hip.

At first blush that seems a preposterous suggestion. The

Germany of international newspaper headlines is a country

with anxious citizens and stagnant politics. Angela Merkel is

Europe’s longest-standing political leader, a woman who epi-

tomises traditional German caution. Last September’s election

saw a surge in support for the far-right Alternative for Ger-

many (

); it tookMrsMerkel sixmonths to cobble together a

lacklustre new coalition. To conservative foreign observers

Germany is a byword for a reckless refugee policy; to others it

is the country that bullied indebted southern Europeans.

But take the long view, and the

Ampelmännchen

captures

how Germany is changing. Post-war German history has

moved in cycles of about 25 years. First came the era of recon-

struction. Then, from the late 1960s, the federal republic began

to reckon franklywith its war guilt. In its latest phase, from the

1990s, Germany has reunified, become a normal country

again and shed some of the fetters of its past. Now the wheels

of history are turning once more. The Merkel era is drawing to

a close. Many of the country’s defining traits—its ethnic and

cultural homogeneity, conformist and conservative society,

and unwillingness to punch its weight in international diplo-

macy—are suddenly in flux.

Promising signals

The biggest change comes fromMrsMerkel’s “opendoor” poli-

cy towards refugees, which brought in 1.2m new migrants in

2015-16. This has confirmed once-homogeneous Germany’s

transformation into amelting-pot. Amore inclusive identity is

emerging—a country that waited until 2000 to extend citizen-

ship to many of those without native ancestors increasingly

defines nationality in civic rather than ethnic terms. A patriar-

chal culture has become more gender-balanced: the share of

working-age women with jobs has risen from 58% to 70% in

the past 15 years. Germans are divorcing more and marrying

less. Even the Mittelstand’s firms are adopting disruptive tech-

nologies such as artificial intelligence. And having undertaken

no foreign military operations in the half-century to 1999, Ger-

many has sent troops toMali, Afghanistan and Lithuania.

This is shaking up a society that has long prized stability,

opening cultural divides between those who embrace the

new Germany and those who hanker for the familiar; be-

tween urban and rural voters; between young and old. The

emergence of a new generation of more combative lawmak-

ers, the

’s arrival in the Bundestag and the battle over the

future direction of Mrs Merkel’s Christian Democrats are all

stoking debates about the country’s identity.

The outcome will determine the future of Europe’s biggest

economy. It will also matter beyond Germany’s borders. The

country is grappling with the rise of a more plural society at

the same time as many others are doing so. Germans are tem-

peramentallymoderate and, thanks to theirhistory, particular-

ly sensitive to the dangers ofdemagoguery. Howtheynavigate

their country’s transition could set an example for others.

At home, the newGermany has shed its post-reunification

economic woes and is booming, but it is also ageing fast; the

largest age group is the 50-to-54s. Preserving its prosperity re-

quires forward-looking reform. Internet access is patchy and

slow; roads and classrooms can be surprisingly shabby; a tan-

gle of red tape restricts service industries; and under Mrs Mer-

kel the retirement age has fallen for some andwill soonbe low-

er than inFrance. The flowofnewcomers toGermanycanhelp

cushion the demographic crunch, especially if immigration

procedures are streamlined, education is improved to break

the tight link between background and results, and the strictly

regulatedGerman professions aremademore accessible.

Abroad, the new Germany could also become a different

sort ofpower. It remains frustratinglyprone to a small-country

outlook: reluctant to spend enough on defence, to confront the

imbalances caused by its trade surplus and to acceptmore bur-

den-sharing in the euro zone. Yet there are signs ofmovement.

Under pressure fromFrance’s president, Emmanuel Macron, it

will reluctantlyaccept somemoves towards euro-zone integra-

tion, albeit tentative and insufficient ones. Germany’s vulner-

ability to trade disruptionmakes it a natural broker in an age of

tariff wars. Last month its new economy minister helped to

persuade the White House to suspend planned steel and alu-

miniumduties on the

and other allies.

Meanwhile, the refugee crisis is expanding German hori-

zons. At its peak Mrs Merkel requested a map shaded to high-

light Germany’s true borders: North Africa, Ukraine and Tur-

key. Then at last year’s

20 summit inHamburg the chancellor

advanced a “Compact with Africa” to accelerate development

and improve governance on the continent. Thoughoverhyped

and underfunded, it gives a hint of the convening and stabilis-

ing role a normalisedGermany could yet play.

Green for go

All of which makes the character of Mrs Merkel’s successor

pivotal. Her uncontentious, reactive style has suited her times.

But a new Germany requires a different type of chancellor:

proactive at home, ambitious abroad andwith the skills toper-

suade German voters of the case for this ambition.

With the right leadership, there is little doubt about the

country’s capability. In its latest historical phase alone it has

absorbed the sclerotic, ex-communist east, overcome eco-

nomic crisis in the early 2000s, taken in over 1m poor, often

desperate immigrants—and coped. Now, as in the past, it

would be a mistake to underestimate Germany. Like the

Ampelmännchen

, it has a knack for reinvention.

Cool Germany

Germany is becomingmore open and diverse.With the right leadership, it could be amodel for theWest

Leaders