Germany : The Economic Leader Of The 17 Nation Eurozone

Forcing Merkel to make some controversial decisions to please liberal Germans; however, citizens affectionately call her “Mutti” or mommy because she has steered Europe through social and economic turmoil for over a decade. Merkel fought for a strong European Union, establishing Christianity as a core value along the way, believing that a strong Europe creates a stronger Germany. An anomaly in German politics, Angela Merkel is not only the first East German-born Chancellor and the first woman Chancellor, but she also pushed to enact an unheard-of progressive tax system in 2005. Internationally, Merkel strives for a strong independant Europe, and rejects parasitic trade agreements, such as the Transatlantic Trade and Investment Partnership with United States. Merkel’s international policy puts Europe first, and other countries second, similar to a fascist

The result of this exchange can be seen in how the German economy hegemonically supports many other states within the union. Ironically, Europe has always been the center of hegemonic power since the colonial era, which in turn led to national uprisings across their spheres of influence (Spiegel, Matthews, Taw, & Williams, 2015). Since the end of the economic downturn, Germany has been unwilling to support the idea of simply bailing out nations such as Greece, opting instead for a form of structural adjustment programme (SAP) to be imposed on the nation (Irwin, 2015). Placing such a policy on a nation only results in the nation never being able to fully achieve sovereignty; supranational bodies such as the IMF imposed such programmes on nations in Africa in the past, and these programmes have merely created more issues to resolve (Mkandawire, 2014). SAPs polarization of economics is a major contributor to the prolonging of the European debt crisis, and has been a contributor to the skewing of global politics in favour of the powerful.

This dissertation will discuss Angela Merkel’s Leadership style and ethics during the Euro crisis.   It will also compare Angela Merkel’s leadership style to servant leadership style.   It will also describe how servant leadership may or may not change the outcomes of the Euro crisis. In the closure of the dissertation, I will discuss my own leadership philosophy.

The weekend of May 5-6 opened a new chapter in the Eurozone debt crisis as voters in France and Greece voiced their disproval over current leadership. With news of France's Sarkozy losing the presidency, and "a dismal election result for Greece's pro-bailout parties" (Reuters.com. May 7, 2012. PP. 1); the future of the Eurozone continues to be shrouded in uncertainty. Debt yields for Greece, Ireland, and Portugal spiked as bond investors ruminated over fiscal and monetary policies. Likewise in Spain, the ten year bond pushed closer to the "psychologically important 6 percent" (Reuters.com. May 7, 2012. PP. 1) threshold. These events highlight the troubling issues of austerity, growth, and debt service which are weighing down the European economy, and as a result imperil the global economic growth story.

Initially Merkel was against giving bailouts. Thus with the Greco-European crisis being the forefront, Merkel pushed for greater private-sector investors to absorb some of the rescue burden. She saw to it that European Union bureaucrats went to Athens where they quietly insisted on simple but important things like shortened vacations for the civil servants, higher taxes on swimming pools and lower expenditures on public housing (Applebaum, 2013). In consideration of these reforms, Angela Merkel stated at political rally in Germany “It's not just about getting any further into debt in countries such as Greece, Spain and Portugal, people should not be allowed to receive pension before their German counterparts. We all have to put in some effort. This is important, we cannot have the same currency, yet some have an abundance of holiday leave and others have very little.”The German Chancellor continues “We cannot stand by these countries and allow them to act the way they have up until now. Germany will help, but only if these countries demonstrate they are putting in the necessary effort"(Asymptotix, 2011). Merkel made multiple attempts with banks and governments to reform policies to prevent taxpayers from absorbing the burden of paying bailouts to the indebted countries. Unfortunately, her efforts failed, and European taxpayers suffered the burden of rescuing the Euro (Engelen, 2011). Merkel stated “the reforms that

These countries are now facing great recessions and austerity as a result of these debts. Because Italy, Belgium and Greece are experiencing fiscal correction, the battle is far from over. Many other members of the EU will need to build up their fiscal surplus to counterbalance the vast debt that has been accumulated. The EU is really no different that the U.S. in that it needs to place full attention on its crisis and correct the situation immediately. Europe has crumbled more than the U.S. has as a result of the crisis. Europe is more segregated than the U.S. and doesn’t offer the same stability for foreign investment than the U.S.

Germany, or the Federal Republic of Germany, was officially founded 1871 by Otto von Bismarck. Since then, Germany has had a rich history. As a young nation looking to get more territory, Germany fought in World War I. However, its loss in the war led to severe punishments in the Treaty of Versailles, leading to bitterness and resentment among the German people, as well as an economic depression. These harsh conditions helped to set the stage for Fascism in Germany. Toppling the Weimar Republic, the Nazi party (the National Social Workers’ Party) made a quick ascent to power. Adolf Hitler, the leader of the Nazi party, envisioned a new era of glory for Germany: a Third Reich. His eventual invasion of Poland in sparked the beginning of World War II. During the war, Germany, along with the other Axis Powers, Japan and Italy, expanded into parts of Europe and Asia. Hitler invaded Poland, Denmark, Norway, France, Luxembourg, Belgium, and The Netherlands within the first two years of the war. Determined to create the “perfect Aryan race,” Hitler set up concentration camps all over Europe. Jews, Communists, and political enemies were imprisoned in these camps, and millions died while in them. However, after years of war and multiple significant losses, Hitler committed suicide. Germany surrendered in 1945, shortly following Hitler’s death.

The German economy is the largest in Europe and worldwide Germany has the fifth largest economy (“World fact book”, n.d.). It is clear that the German economy holds a key position in the world marketplace. Gross domestic product (GDP) growth is an important consideration for foreign investment as it speaks to the overall health of an economy. GDP growth can be attributed to spending and investments both on and from imports and exports (“What is GDP”, 2005). In 2014 the reported GDP growth rate in Germany was 1.4%, up .9 % from the prior year (“World fact book” n.d.). The Eurozone was deeply affected by a recession stemming from the US and made worse by poor economic conditions in Greece and Spain, among other countries in

The Federal Republic of Germany was at a crossroads in the mid-1960s, still under the shadow of World War II, but viewing the future with optimism. In the seven years between being chosen as host and staging the event itself, Germany experienced favorable economic conditions and a belief in technocratic optimism, but was equally marked by national and international debate and dispute. The symbolic potential of the Games did not escape the Munich organizers who took just one month in 1965 to secure promises of funding from the city of Munich, the Bavarian State and the Federal Government. Hosting the Games was deemed to be of immense importance. As Chancellor Willy Brandt said, “Munich 1972 was to serve as a showcase of modern Germany”, a chance to replace memories of the Third Reich with images of a thriving and a prosperous Federal Republic. It was an opportunity to present an optimistic Germany to the world through its ‘Happy Games’ – its official motto.

By the end of 2008, the European Union began experiencing rippling effects of the United States financial crisis. Several member countries, most notably on the southern end of the continent, faced high levels of debt and unemployment. Portugal, Iceland, Ireland, Greece, and Spain, derogatively referred to as “PIIGS,” required extensive economic support from the EU in order to repay government debts and bail-out private banks. Disbursal of aid in 2010 proved successful in promoting economic recovery in some countries; however, the vast majority observed only slight economic improvement which led to doubts regarding the effectiveness of the harsh austerity measures implemented. Ireland has most clearly benefited from the financial support of the European Union as the country’s unemployment rate has dropped below ten percent and is expected to witness 4.5% GDP growth in 2016. Portugal, on the other hand, shows little fiscal improvement as evident in an unemployment rate of 13% and an expected GDP growth of only 1.6% in 2016. Although both countries faced tough financial crises in 2010, Ireland has notably outperformed Portugal in resolving the situation. The weak economy in Portugal, as well as continued fiscal hardship in the remaining “PIGS” countries, threaten the preservation of the European Union as financial inequality between the members persists.

As it began, our century drew to a close, with Germany once again the economic powerhouse and political hub of Europe. What is remarkable is how quickly this happened, how unbidden and unanticipated: the toppling of the Berlin Wall in November 1989; the reunification a year later; the collapse of the Soviet Union and the end of the Cold War in late December 1991; a resurgent impetus to West European integration in 1992; and NATO enlargement, which was consecrated in April 1999. Unquestionably, this chain of events has profoundly affected Germany’s situation over the past decades. For the first time since the establishment of the Federal Republic of Germany (FRG) in 1949 and the painstaking process of

In 1999, ten European nations joined together to create an economic and monetary union known as the Eurozone. Countries, such as Germany, have thrived with the euro but nations, like Greece, have deteriorated since its adoption of the euro in 2001. The Eurozone was created in 1999 and currently consists of eighteen European nations united under the European Central Bank and all use the euro. The Eurozone has a one point six percent inflation rate and an eleven point six percent unemployment rate in 2014. Greece joined the Eurozone in 2001 and was the poorest European Union member at the time with a two point six percent inflation rate3 (James, 2000). Greece had a long economic history before joining the Eurozone. The economy flourished from 1960 to 1970 with low inflation and modernization and industrialization occurring. The market crash in the late 1970’s led Greece into a state of recession that the nation is still struggling with. Military failures, the PASOK party and the introduction of the euro have further tarnished Greece’s economic stability. The nation struggles with lack of competitiveness, high deficit, and inflation. Greece has many options like bailouts, rescue packages, and PPP to help dig it out of this recession. The best option is to abandon the Eurozone and go back to the drachma. Greece’s inflation and deficit are increasing more and more and loans and bailouts have not worked in the past. Leaving the Eurozone will allow Greece to restructure and rebuild

The economic crisis of 2008 in New York had ripple effects around the world, causing deep structural problems within the European Union to crumble the economies of several countries. These countries, known as the PIGS, are made up of Portugal, Ireland, Greece, and Spain, and collectively hold most of the sovereign debt problems of the European Union. After fast growth early in the decade, these countries were spending too much money and not securing their own banking sectors with enough capital. Soon, the debt the PIGS owed caused massive problems throughout the EU, and Germany and France had to come to the rescue of these poorly managed countries. (Greek Crisis Timeline, 1) Now, in 2012, the issue has yet to be fully resolved. Greece is still sinking, and a massive bailout for Greece's banks is required. The debate is whether Germany should continue bailing out Greece and collecting interest on its loans, or whether Greece should try to separate itself from the broader European Union, in an attempt to manage its own finances and declare bankruptcy in order to save itself from crippling interest payments. Each path offers an escape from the present situation that Greece finds itself in, but only the path of bailout results in a harmonious European Union. If Greece fragments off from the EU, then the entire union is weakened as a result. I believe that Greece should accept the terms of the bailout that Germany has provided, and should undergo several years

“I don’t think it make sense to go round and round in circles arguing about this crisis. We have to manage it instead. But that’s something we can only do together with our neighbors, our partners, the big ones and the small ones. I think Germany is destined, partly as a result of its geographic position, to be a mediator and balancing factor.”

"Europe must prevent Greece from becoming an out-and-out catastrophe and make sure that the same fiscal 'remedy' is not applied to other weak economies" -- Franziska Brantner