Matthias Matthijs makes the case in Foreign Policy:
Since the global financial crisis of 2008, Merkel’s leadership has been tested on four different fronts: the eurozone debt crisis, the military conflict between Russia and Ukraine, the Schengen crisis over refugees and intra-EU migration, and the creeping authoritarian tendencies of governments in Hungary and Poland. In all four crises, Merkel’s governments have dithered and German leadership has fallen short.
First, during the euro crisis, German insistence on fiscal austerity and structural reform pushed the burden of adjustment of the crisis squarely onto debtor countries, with disastrous consequences for the monetary union’s cohesion as a whole. Unlike the United States after the global financial crisis, Germany refused to provide the regional public goods the eurozone needed for a swift recovery. While the United States responded to the global panic in 2008 with a fiscal stimulus package and allowed the Federal Reserve to be the global lender of last resort, Germany’s role during the euro crisis was austerity for all and a refusal — during the first three years of the crisis — to let the Frankfurt-based European Central Bank use its balance sheet to calm financial markets.
Merkel and Finance Minister Wolfgang Schäuble’s tough stance vis-à-vis Athens was motivated by the exposure of German banks to the euro periphery, a strict adherence to ordoliberal economic ideas touting balanced budgets and fiscal restraint, and a populist refrain that touted the Continent’s northern saints and southern sinners. A Greek fiscal crisis quickly turned into a full-blown sovereign debt crisis as a result of German insistence on following dysfunctional fiscal and monetary rules. While Germany’s economy has fared well since 2010, this has come at the cost of declining living standards, record unemployment, and increased Euroskepticism across the EU’s southern periphery. With no hope of economic recovery, the future of the common currency remains fragile at best.