13/01/2015 06:18 GMT | Updated 14/03/2015 05:59 GMT

How Much Worse Can Merkel Let Things Get?

Not since Queen Victoria has a German woman been so powerful in European politics. In those perversely fascinating 'family photos' of the European Council, Angela Merkel stands out from the crowd...

Not since Queen Victoria has a German woman been so powerful in European politics. In those perversely fascinating 'family photos' of the European Council, Angela Merkel stands out from the crowd. And she's been there since 2005, which makes her by a mile the EU's longest serving government leader. (Only Jean-Claude Juncker, lately prime minister of Luxembourg and now President of the European Commission rivals her experience.) So, nearly ten years on, how should we assess her?

Any leader is bound to suffer comparison with more colourful predecessors: Merkel with Kohl, Hollande with Mitterrand, Cameron with You Know Who, and so on. On this score, Merkel has been at least as canny as Helmut Kohl in reading German domestic politics. In the European dimension, however, she has yet to rival him.

True, she worked successfully to revive the EU's constitutional momentum in the Lisbon treaty in 2007 when an earlier draft had been rejected by referenda in France and the Netherlands. But since then Merkel and her colleagues in the European Council seem to have had the stuffing knocked out of them by the depth and length of the financial crisis and ensuing slump. Too much reliance has been placed on dysfunctional peer review by national leaders - euphemistically called the 'open method of coordination'.

A range of crisis management measures has been taken, some more innovative than others, but none wholly successful. The overall consequences of the economic crisis in political terms are to have made the EU even more technocratic than it was before, and to have alienated large sectors of public opinion all over Europe. The European Union, being badly governed, is in real trouble. Deflation stalks; Greek sovereign debt is insupportable; and the UK is thinking of leaving altogether. Russia is on manoeuvres; Turkey abandons its European pretentions; and Islamist terrorism spreads, with the obvious counter-reaction.

Open method of cockup

Amid all this difficulty, Europe's most powerful national leader remains largely inscrutable, buying time. But as one of her close aides admits, the danger is that Merkel is now 'buying time without using it'. In terms of governance, the EU remains trapped in a constitutional limbo somewhere between an intergovernmental confederation (which is proven not to work) and a federal union (which has not yet been tried).

In some areas, notably fiscal, the Treaty of Lisbon is being stretched beyond its limits. Recourse has had to be made to extra-EU instruments, such as the European Stability Mechanism and the Fiscal Compact Treaty. The European Commission and European Central Bank struggle vainly to restore the EU's credibility for economic management (not least in Berlin) while lacking the comprehensive toolbox and sufficient assets to do so.

In other areas too, such as fundamental rights, the provisions of Lisbon are proving impossible to fulfil. The EU has no immigration policy. Its security and defence policies are incoherent. Europe's constitutional courts and parliaments are jittery. Negotiations about the modernisation of the Union's finances, led by Mario Monti, appear to have stalled. Politicians bleat about EU 'reform', but they are ignorant or neglectful (or both) on the specifics.

The emperor has no clothes

Nobody is more reckless in this regard than David Cameron, not least in resorting to the device of a Brexit referendum, at once simplistic and divisive. Cameron shields himself by pretending that Merkel somehow agrees with him about EU 'reform'. She only has to speak her mind (presumably after the British general election on 7 May) for Our Dave to be revealed as the emperor with no clothes.

Instead of more tinkering on the margins, another general revision of the EU's constitution is now a pressing need. The main focus of the reform agenda must be to deepen fiscal integration. What 'fiscal union' means, of course, is democratic federal government. Most people who matter know this, but seem not dare say it until the German Chancellor has spoken. Even media commentators are intimidated by the scope and complexity of what has to be done, and done quickly, if the Union is not to fall apart.

Once the starting gun is fired by Merkel the European Parliament must exercise its proper right to call a Convention along the lines of that headed by Valéry Giscard d'Estaing in 2002. And Commission President Juncker must at that stage be ready with a bold, well-crafted agenda for such a Convention, including good things for the courts, the citizens, the governments and the parliaments. It can be done. How much worse will Merkel let things get before they are done?


Andrew Duff's new book will be launched on 19 January. Pandora, Penelope, Polity: How to Change the European Union (John Harper).