Ms. Merkel’s supporters say that she has helped the German economy dodge some bullets. Her sharp political instincts proved valuable during a eurozone debt crisis that began in 2010 and nearly destroyed the currency that Germany shares with 18 other countries. Ms. Merkel arguably kept hard-liners in her own Christian Democratic Union in check as the European Central Bank printed money to help stricken countries like Greece, Italy and Spain.
But her longtime finance minister, Wolfgang Schäuble, was also a leading enforcer of policies that protected German banks while imposing harsh austerity on southern Europe. At the time, Germany refused to back the idea of collective European debt — a position that Ms. Merkel abandoned last year, when faced with the fallout from a pandemic that threatened European unity.
Ms. Merkel had some luck on her side, too. The former communist states of East Germany largely caught up during her tenure. And Ms. Merkel profited from reforms made by her predecessor, Gerhard Schröder, which made it easier for firms to hire and fire and put pressure on unemployed people to take low-wage jobs.
Mr. Schröder’s economic overhaul led to a sharp decline in unemployment, from more than 11 percent when Ms. Merkel took office to less than 4 percent. But the changes were unpopular because they weakened regulations that shielded Germans from layoffs. They paved the way for Mr. Schröder’s defeat by Ms. Merkel in 2005.
The lesson for German politicians was that it was better not to tamper with Germans’ privileges, and for the most part Ms. Merkel did not. Many of the jobs created were low wage and offered limited chances for upward mobility. The result has also been a rise in social disparity, with a rapidly aging population increasingly threatened by poverty.
“Over the past 15 to 16 years we have seen a clear increase in the number of people who live below the poverty line and are threatened,” said Marcel Fratzscher, an economist at the D.I.W. research institute in Berlin. “Although the 2010 years were very economically successful, not everyone has benefited.”
Ms. Merkel’s failure to invest more in infrastructure, research and education, despite her background as a doctor of physics, also reflects the German aversion to public debt. Mr. Schäuble, as finance minister, enforced fiscal discipline that prioritized budget surpluses over investment. The German Parliament, controlled by Ms. Merkel’s party, even enshrined balanced budgets in law, a so-called debt brake.