Crashed: How a Decade of Financial Crises Changed the World

by Adam Tooze

Merkel has come to be seen as the figurehead of Europe’s political center—oscillating between conservative stances on economic and financial policy and cultural modernization.16 When she first emerged on the political scene her profile was harder edged. In the 2005 election that brought her to power, Merkel ran on a strong promarket platform. It was unpopular and she subsequently softened her stance. But there is little doubt that the 2005 agenda expressed the chancellor’s basic personal vision. It can be summarized in three numbers: 7, 25 and 50. As Merkel is fond of pointing out, Europe has 7 percent of the world’s population and 25 percent of global GDP. But it is responsible for 50 percent of global social spending.17 This, as Merkel sees it, is not sustainable. Germany’s growth is steady, but slow at best. Germany’s population, along with that of much of Europe, is aging. What has to give is government spending. Fiscal consolidation is the deep continuity of Merkel’s administrations. As she announced in her first speech at Davos in January 2006: “To understand the social market economy as a NEW social market economy in the twenty-first century we must first of all reorder the priorities of politics toward an understanding of politics that is directed ahead, toward future generations. For us in Germany