It’s Merkel Legacy Moment as She Tackles Twin Crises

(Bloomberg) -- It’s a legacy moment for Angela Merkel. How the German chancellor navigates the two-front crisis emanating from Moscow and Athens could determine whether she rises to her role as Europe’s dominant leader or slips into history as a risk-averse manager who couldn’t hold the region together.

“The immediacy and urgency of taming the dual Greek and Ukraine nightmares are defining moments for Europe and for Merkel,” said Bud Collier, professor at the John F. Kennedy Institute of Berlin’s Free University. “The stakes are enormous.”

An abundance of caution is the complaint she’s faced from the moment Greece spawned the euro financial crisis -- forcing needy nations to take their medicine and suffer for budgetary sins in the name of becoming more competitive. In return, she slowly brought her reluctant electorate along and pried open her government’s checkbook.

Now the Greeks are as fed up as the Germans. They elected Alexis Tsipras as prime minister on the promise the days of pension, wage and job cuts were over. They’re also trying to get under Merkel’s skin.

Standing in Germany’s finance ministry, the stone behemoth that was Herman Goering’s headquarters in Adolf Hitler’s regime, Greek Finance Minister Yanis Varoufakis touched the most sensitive spot in Germany’s collective consciousness: “Germany must and can be proud that Nazism has been eradicated here, but it’s one of history’s most cruel ironies that Nazism is rearing its ugly head in Greece, a country which put up such a fine struggle against it.”

Her Way

Remarks like that may explain Merkel’s exasperation with the new leaders in Athens and why she’s waiting for them to come around to see things her way. If they don’t, neither she nor her allies have expressed much interest in a middle ground.

So either Tsipras turns 180 degrees or the euro area’s post-crisis, anti-contagion defenses will get their stiffest test. The next signals are likely at the EU’s Feb. 12 summit. Also on the agenda at that gathering is what to do about Putin. As with Tsipras, she’s not optimistic.

Unlike with Greece, though, Merkel has few cards to play. She’s stuck between the U.S. and Russia, herding the EU’s 28 governments and is largely the point person because of geography.

She has stopped seeing Putin as a rational actor, according to German government officials, but is the closest to an interlocutor that she has. As she arrives for talks in Moscow with French President Francois Hollande and the fighting intensifies, the united anti-Putin front is at risk amid dwindling options: tougher sanctions that many EU leaders are resisting, arming the government in Kiev or yielding to the breakup of Ukraine.

Merkel’s decision to go to the Russian capital was a spontaneous reaction to the dire turn of events and not the result of any talks where an historic agreement is expected, said a person familiar with the matter. “There are possibilities but there are also risks,” Hollande said today in Paris.

(Πηγή: www.bloomberg.com)