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The Most Powerful Women
The Most Powerful Woman In The World
Angela Merkel, 52, won last fall's elections for the chancellorship of Europe's largest economy, surprising the incumbent, Gerhard Schroder, and even members of her own Christian Democratic Union.
Since then Merkel, a scientist turned politician, has been impressing world leaders from Tony Blair to George W. Bush. But Merkel has a tough fight ahead of her. Her approval ratings have declined to 56% from 80% earlier this year, making it more difficult for Merkel to win big with key legislative initiatives, including health care reform and corporate tax restructuring. An underwhelming showing in national elections has Merkel overseeing a fragile coalition government with her main rivals, the Social Democrats.
And behind the scenes, Merkel has been making a big push to ramp up U.S. investment in Germany. In May and June, Merkel traveled to the U.S. without fanfare (declining media interviews), to meet in closed-door sessions with U.S. industry leaders, including Coca-Cola chief Neville Isdell, General Electric's Jeffrey Immelt and Goldman Sachs' then-chair Henry Paulson.
According to Merkel's right-hand man, Ulrich Wilhelm, Merkel used the meetings to promote the research and high-tech skills in Bavaria as on par with Silicon Valley, in addition to showcasing other potential markets in Germany.
On other business fronts, Merkel was the driving force behind opening Deutsche Telecom, still 15% owned by the state, to investment from the Blackstone Group, an American private equity firm. She has also been encouraging the development of the German real estate market, which suffered from a construction overhang post-reunification but is now seeing interest from hedge funds.
What Merkel is keyed into here is an understanding of how vital America is to Germany's economy--and vice versa. According to government statistics, total trade between the U.S. and Germany exceeds $100 billion per year. America is Germany's second-largest trading partner, and Germany is America's fifth-largest. At nearly $200 billion, German investment in the U.S. alone comprises about a quarter of all German investment overseas. America has about $100 billion invested in Germany, equal to 15% of the total U.S. foreign direct investment globally.
And as of 2002, some 3,400 German companies accounted for nearly 800,000 jobs in the U.S. At the same time, nearly 1,400 U.S. companies generated 475,000 jobs in Germany, a quarter of all jobs provided by foreign companies in the country.
Merkel's key strength: unassuming and tireless networking. Merkel "sees her role to be a broker," says Jones of Medley Global Advisors.
Merkel's subtle arm-twisting is working. Germany's stagnant economy is now showing signs of revival. Merkel was the driving force behind the compromise between the U.K. and France on the European Union budget fight last December.
In addition, Merkel allied Germany with the U.S. to oppose Iran's nuclear activities, and she was vocal on energy security at the G8 summit meeting this summer, where she was the only female leader at the table.
Merkel's scientific training (she was a physicist) also comes in handy. "She is focused on technology, innovation and competition," interests that by their very nature often necessitate collaboration, says Dr. Norbert Walter, chief economist of Deutsche Bank Group. Walter adds Merkel "is not interested in defending typical vested interest groups."
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