Mary Dejevsky: A turning point for Old Europe

The prospects for Germany's new leader are as not as dim as her detractors say
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At last, after much sulking and haggling, Germany has resolved its election and Angela Merkel comes to London today as her country's eighth post-war Chancellor. For much of the past two months I have kept on my desk a German cartoon that neatly summed up the stalemate. Ms Merkel, thinly disguised in drab hunting gear, is perched on a tree branch. She looks fed up, but reconciled to a long wait. Below, sits a large bear (Gerhard Schröder) with a puzzled expression on his face; he is trying to figure out the workings of the rifle the hunter dropped as she fled.

Intentionally or not, the drawing says more about Ms Merkel than it did does either about the ungracious Schröder, or about Germany's post-election deadlock. What it says is that Ms Merkel can cope with setbacks. She knows the value of patience; she bides her time. Remember this as her "grand coalition" starts work.

A consensus has grown up according to which Ms Merkel is doomed to fail. For the German right, she has given away too much of her reform programme for the sake of making history as Germany's first woman Chancellor. For the left, even her diluted programme is a challenge they intend to fight. And for almost everyone, the very idea of a "grand coalition" between Germany's two biggest, opposing, parties is seen as heralding stalemate. They forecast bickering, inaction and an early election.

Now, it is entirely possible that this coalition will founder on any one of these weaknesses - or indeed all of them together. And it is equally possible that, were this to happen, Ms Merkel would go down as a transitional leader who should have been left with a minor portfolio. So far, though, I am not persuaded that the prospects for Germany's new Chancellor are as dim as her detractors would have us believe.

The country's last "grand coalition" was nothing like the disaster that it is sometimes portrayed, and the government that Germany now has - led by Ms Merkel, but restrained by the Social Democrats - is a fair reflection of how Germany voted. So long as the electorate has an interest in it working, so do the parties and the ministers involved. Nor is this co-operation a novelty: when Mr Schröder secured the first wave of reforms at the start of this year, he could do it only with the support of the opposition. There was a de facto "grand coalition" - and it worked.

The most criticised feature of this government's programme are the tax provisions. How, ask critics from the right, will Germany's stagnant economy grow, when VAT is to rise by 3 percentage points, and income tax on the highest earners is to be raised? What they forget is that it was Ms Merkel herself who campaigned for a VAT rise - to reduce employers' contributions and thus encourage job creation. Cutting unemployment is a priority all Germany's parties agree on. The higher income tax was a concession Ms Merkel made to the SPD.

And coupling the two tax changes does more than spread the pain. It makes the parties jointly responsible. If the German economy fails to improve, the SPD may threaten to leave the coalition, but they will find it harder to wriggle out of complicity. If the reforms succeed, on the other hand, the glory will belong to Ms Merkel.

As the tax agreement shows, Ms Merkel is not the dogmatic, free-market radical demonised by Mr Schröder during the campaign. She is as much of a pragmatist as he was, but she is a pragmatist with patience. She understands that concern for continuity is reassuring in a new national leader. This is why, like Mr Schröder before her, she paid her first foreign visits as Chancellor to Paris and Brussels, before meeting Tony Blair today. She may have signalled a friendlier stance towards the US than the second-term Mr Schröder, but she is not offering President Bush any troops for Iraq, nor has Washington been promoted up the order of foreign visits.

Ms Merkel is not rushing. Her upbringing and career in East Germany taught her caution. When, after the Berlin Wall fell, she went into politics and later joined the CDU, she did so deliberately and after researching the options. As she ascended through the party ranks, she chose her moments to move with care. When she cast off her patron, Helmut Kohl, she flourished by building ad hoc alliances. These same skills will help her mould this coalition.

The most dangerous times for Ms Merkel 's prospects were the election itself - because campaigning is not her forte - and her first months in power. If she survives, as she surely will, we may look back on this week as the point at which Old Europe's fortunes turned and Germans started to take pride in a latter-day iron Chancellor.