In 2017, Alternative for Germany became the first party in decades to enter Parliament to the right of Ms. Merkel’s conservative bloc. The party, known by its German initials, AfD, won more than a million votes, 12.6 percent of the total, attracting Germans who believed their interests were not being represented by lawmakers in Berlin and who were angry at Ms. Merkel’s migration policies.
In the consensus-based tradition of German politics, one of the two largest groups would form a government with a smaller one. AfD’s success blocked that option, and forced Ms. Merkel into awkward coalition negotiations. Three months after the election, she’s still struggling to form a government.
“Some say Germany is a wonderful country, in which the values of our Constitution are lived actively. A country that is strong and economically successful, in which more people have work than ever before.”
The economic outlook in Germany and Europe is the best it has been for at least a decade. The German central bank released figures earlier in December projecting 2.5 percent growth in 2018. The emissions scandal at Volkswagen and other automakers has barely dented the economy.
To defend its long-term competitiveness, analysts say, Germany needs to invest in its infrastructure and its workers. With little unemployment, the country will face labor shortages unless it can integrate immigrants into the work force. That means spending more on education and training, the chancellor noted in her speech.
“The others say, ‘There are too many people who are not part of this success.’”
Germany remains one of the world’s wealthiest countries, home to four of the globe’s largest companies by revenue, according to Forbes, with one of the highest average incomes in the European Union and one of the lowest unemployment rates, 5.6 percent.
But the gap between rich and poor has widened during Ms. Merkel’s 12 years in power, leaving nearly 16 percent of the population at risk of poverty, according to government figures. A country that prides itself on its equitable social market system now feels greater insecurity.
Figures released by the Organization for Economic Cooperation and Development showed that 14 percent of children in Germany receive welfare benefits. The organization has consistently pointed to disparities in the school system, in which children from wealthier families have a better chance of reaching university than those from poorer families.
Integration of Refugees
Ms. Merkel said that there were “too many who worry that there is too much crime and violence, who wonder how we can regulate and organize immigration to our country.”
Roughly one million people, many from Syria, Iraq and Afghanistan, arrived in Germany in 2015-16. Ensuring they can successfully integrate into German society is a key challenge for any future government.
The presence of so many refugees in Germany remains a source of friction, one that has helped to feed the divisions the chancellor addressed in her speech. Unlike in past New Year’s addresses, in which Ms. Merkel had spoken directly about refugees and migration, on Sunday she made only a passing mention of the issue.
But she must still finesse differences of opinion on migration within her conservative bloc and with her prospective coalition partners, the Social Democratic Party. Heading into talks, the conservatives demand a limit on the number of people who can arrive to apply for asylum, while the Social Democrats say that would violate the Constitution.
Germany’s Role in Europe
“No matter what, Germany’s future is bound to the future of Europe. The 27 nations in Europe must be called upon more than ever to stick together as community. This will be a decisive question for the coming year.”
Ms. Merkel’s political quandary has left many in the European Union wondering whether they can still rely on Germany to pull its traditional weight as a de facto leader — a role for which Berlin has been despised.
French and German elections in 2017 pushed back serious decisions on the eurozone, migration, asylum, defense and other issues — let alone negotiating the exit of the bloc’s 28th-member country, Britain. The French emerged under the leadership of Emmanuel Macron, who has laid out an ambitious reform agenda, but he will need Germany to move ahead.
A Call for Empathy
“My wishes for the New Year are for us to become aware again of that which holds us together at heart; that we focus again on what we have in common; and for us to strive to have more consideration for others. I mean consideration in the broadest sense: paying attention, truly listening and showing understanding for others.”
The past year saw Germans focus on trying to curb an explosion of hate speech on the internet that many say has deepened divisions in society. Despite fears of foreign meddling in the election, the most alarming development online appeared to be an increasingly vocal far right.
Under a new law that takes effect on Monday, social media companies must erase comments flagged as hateful within a set period of time, or face fines that start as high as 5 million euros, or $5.7 million, and can rise to €50 million.
Observers are watching closely to see if that will help the chancellor get the internet on her side.