Germany's Recovery Hasn't Helped Merkel

Germany's steady stream of good economic news—last week, it announced that unemployment dropped below the 3 million mark for the first time since 1992—has been of oddly little help to Chancellor Angela Merkel. Since last year's decisive reelection victory, Merkel has been beset by a number of political setbacks—infighting with junior coalition partners, taking the wrong side in a regional railway dispute that sparked nationwide protests, and backing EU bailout efforts despite resistance from German voters. Over the past year Merkel's coalition has dropped more than 10 percentage points in polls, and now sits neck and neck with the opposition. "There's fatigue, there's exhaustion … People don't seem to see the vision and direction," says Thomas Kleine-Brockhoff, a senior director at the German Marshall Fund. "That's amazing, because this is the country with the best outcome from the crisis in the Western world."

With the next national vote still three years off, any immediate challenge to Merkel's leadership would come from within her party, where there are already uncharacteristic rumblings about potential successors. Merkel has proven herself a masterful political survivor. But next year's elections in six of Germany's 16 states—in which a quarter of the population will vote—will be a test of whether the uncertain economic times can make casualties even of leaders who do things right.