What The Hell America!

Much of Merz’s public reputation, particularly on the broad liberal and left-wing space, stems from this time out of the political spotlight. In particular, his role as chairman of the German division of BlackRock, the American asset management behemoth, is seen with a critical eye by most Germans. His close personal ties to BlackRock CEO Larry Fink, as reported in a recent biography by Volker Resing, only add to the perception that Merz represents the financial elite more than the electorate.

Still, his advocates seek to reframe this association not as a liability but as a strength. His corporate entanglements are portrayed as proof of worldly competence, a business-minded sensibility absent from the typical career politician. “Through his many board positions,” write Jutta Falke-Ischinger and Daniel Goffart in their biography of Merz, “he gained a deep and novel insight into the economy.” Between 2007 and 2018, Merz served on at least nineteen corporate boards, from Commerzbank to BASF and the recycling giant Interseroh. Just as he was plotting his political comeback, his connections earned him millions and embedded him within Europe’s financial elite.

This fusion of economic power and political ambition has drawn intense scrutiny. Merz continued to serve in Germany’s parliament until 2009 despite having effectively exited politics two years earlier. He collected his full salary while delivering no parliamentary speeches in his final term. More controversial still were the board seats and advisory roles he received from industrial leaders with whom he shared personal histories.

One case involved Werner Müller, the former minister of economic affairs under Chancellor Gerhard Schröder, who awarded Merz a lucrative consulting role at Ruhrkohle AG. Müller later also helped secure him a board seat at Stadler Rail, a Swiss company that went public in 2019. This reportedly made Merz a multimillionaire. Resing, another Merz biographer, quotes one of Merz’s confidants describing this as “his real entry into the circle of the financial and business elite.” This entry came just a year after Merz announced his return to frontline politics.

His proponents have tried to downplay the potential for conflicts of interest. Resing cites a corporate attorney familiar with Merz’s legal work who insists that “the substantive work was always done by others.” Merz, the implication goes, was more of a figurehead than an operative.

When BlackRock executive Merz returned to the political spotlight in 2018, his image as Merkel’s adversary and a neoliberal hard-liner was already firmly established. But what has largely disappeared from the public eye is that Merkel herself was not always perceived as a non-ideological chancellor devoid of political dogmas. On the contrary: when she competed with Merz early in her career for the most important posts within the CDU power apparatus, she too was seen as a neoliberal “radical reformer.” The weekly Der Spiegel wrote at the time about Merkel: “She doesn’t just want to discard cornerstones of 16 years of CDU policy under Helmut Kohl. Merkel wants to overhaul the welfare systems so thoroughly that all concepts dating back to Chancellor Bismarck gradually disappear from the party’s program.”

This stance was especially evident at the CDU party congress in Leipzig in December 2003. At the time, the CDU was, according to Merkel and Merz biographer Resing, “almost radically hungry for renewal.” The policy resolution called for a flat tax, a comprehensive pension system reform, and a massive reduction in social spending. Merz was also present at the congress: “Today marks the beginning of the end of the Social Democratization of the Union,” he thrilled back then.

Yet when Merkel entered the 2005 election campaign, it became clear that this course did not convince a majority. Her economically neoliberal agenda did not resonate — and in fact the CDU lost voters. With 35.2 percent of the vote, she achieved exactly the same result as seven years earlier — the very result that had enabled Gerhard Schröder and the SPD to take power. This outcome would become pivotal for Merkel’s subsequent political strategy. As Resing, who published his first Merkel biography in 2009, writes, the lesson was clear for Merkel: “You can’t win elections with a hardline, economically liberal reform agenda.” Thus, Merkel became the pragmatist the world remembers her for today.

Could the same thing happen to Merz? In 2005, he understood that the Christian Democrats’ electoral victory actually exposed the weakness of Merkel and her program. In a newspaper column at the time, he pointed out that 2.6 million voters had given their first, local vote to the CDU but not their second, more decisive one. The piece bore the title: “Voters apparently don’t want Merkel.”

Back then, sixteen years of Helmut Kohl were followed by a brief SPD-led interlude, to which Merkel responded in 2005 with a radical reform agenda that fared modestly with voters but still brought her to the chancellorship — thanks to a coalition with the SPD.

Now, sixteen years of Merkel have been followed by an even shorter SPD-led interlude, and Merz has responded with a radical reform program that has fared even worse with voters — but will still make him chancellor, again thanks to a SPD willing to cooperate for a little bit of power within ministries.

In their coalition agreement, the two parties prioritize stricter immigration controls and corporate tax relief, while officially preserving key social democratic achievements such as the independent Minimum Wage Commission. Notably, the SPD has managed to prevent major rollbacks of welfare policies, even as the CDU secures business-friendly reforms like accelerated depreciation and a lower corporate tax rate. It’s a playbook known from Merkel’s time. In a more surprising shift, both parties also committed to easing the so-called “debt brake,” a constitutional constraint that has long hampered public investment since its enactment by Merkel’s government in 2009.

So, the parallels have limits. Today’s SPD is weaker than ever, and the CDU is also diminished — the resulting coalition is hardly comparable to Merkel’s power-saturated grand coalitions. These altered dynamics will also have their effect on Merz.

There is no doubt that Merz has presented himself as a radical candidate for the chancellorship. In previous years, he primarily attracted media attention when he overstepped rhetorical boundaries, for example, when he accused Ukrainian refugees of “welfare tourism,” referred to migrant children as “little pashas,” or falsely claimed that asylum seekers were getting free dental work in German clinics.

In 2020, when asked whether he could imagine a gay chancellor for Germany, he replied: “Let me put it this way: the question of sexual orientation is none of the public’s business. As long as it remains within the bounds of the law and doesn’t involve children — and at that point I draw an absolute line — it’s not a matter for public debate.” That this statement placed him “on the borderline of homophobia,” as Sievert writes in her book, is perhaps the most charitable interpretation.

But despite his reliance on provocative topics, Merz may no longer be genuinely interested in escalating them. In the biography by Falke-Ischinger and Goffart, Merz is quoted as saying: “I’m not the conservative fossil my opponents like to make me out to be.” The authors describe how he has become more cautious. He had come to realize that his brash demeanor and outdated rhetoric from pre-1989 West Germany had repeatedly tripped him up. He has since accepted, they write, “that the world can’t simply be rolled back to where it was 16 years before Merkel.”

Even though he is celebrated in the more conservative factions of his party for his aggressive stance, it has become evident that this approach cannot replicate past electoral successes. Public sensitivity has increased, as clearly demonstrated by the wave of outrage over the taboo-breaking joint vote with the AfD on a Bundestag motion this January.

Merz long saw himself as the antithesis of Merkel, but he may end up becoming her political reincarnation. The fact that — just like Merkel before him — he is now entering a grand coalition is further evidence that he intends to govern not as a radical reformer, but as a pragmatic administrator of what he would like to be a hyper-stable Republic.

But it is questionable whether even this opportunistic governing style will work under present conditions. The political and economic prerequisites have fundamentally changed since Merkel’s era. Her chancellorship benefited from a phase of global economic growth that especially favored Germany as an export nation. That model no longer functions. Merz, on the other hand, is unlikely to be compelled — given the absence of pressure from the Left — to sustainably boost domestic demand. There will likely be investments in bridges sturdy enough for tanks. But wage increases that might allow a young generation to afford a new car again? Hardly. Merkel’s stability-focused course had an expiry date — and that date has long since passed.

To be Merkel’s true successor, Merz would have to tackle the many unresolved issues she left behind, notably crippling infrastructure deficits and the failing model of an export-led economy that relied on cheap energy and low labor costs and now faces immense challenges in the context of global supply chain disruptions. But he lacks not only the political finesse, but also the power base to do so.

When Merkel first governed with the SPD, she had a comfortable majority of seats in the Bundestag. The grand coalition Merz now leads is the weakest in history with merely 52 percent of seats. Moreover, the political pressures on the CDU have shifted fundamentally. While Merkel governed during a global upsurge of left-liberalism, with majorities in Germany in favor of legalizing gay marriages, the transition to clean energy and, initially, even the opening of borders, Merz faces a reversed dynamic. Today, the pressure is coming from the Right, articulated by the AfD with a vehemence that no party had the basis to match during Merkel’s time.

Under these conditions, it will be difficult for Merz to stabilize and capitalize on the “center” that Merkel cultivated. He has already distanced himself from his economic radicalism in the hope of reassembling Merkel’s broad voter base. But it is likely that the consensus model she cultivated will not survive his chancellorship.