The iron Frau: Angela Merkel

The comparisons between the two formidable female leaders are almost too obvious to draw. But is Angela Merkel turning into Europe's new Margaret Thatcher?

If the German and other European media are anything to go by, it would be easy to think that she is. Germany's first woman Chancellor – a leader once referred to as "Ms Europe" – is nowadays being dubbed "Frau Germania", "Iron Lady" and even " Maggie Merkel", not just by hyper-critical British newspapers but by the press in her own country.

For a conservative leader who is supposed to be steeped in the grand pro-European unity traditions of Germany's "Unification Chancellor" Helmut Kohl – her illustrious predecessor and former mentor – the "Thatcher" tag is probably the weirdest and most contradictory label that Merkel has ever been stuck with. The new nicknames were coined during last month's EU summit in Brussels, where the 56-year-old leader took an uncharacteristically tough stance over the Greek debt crisis. Despite vociferous howls of complaint from the European Central Bank and other EU member states, the German Chancellor was able to walk away from the summit having forced the eurozone to agree that Greece will only get financial help from the EU if that country is pushed to the verge of bankruptcy. Even then, part of the rescue package is to be funded by the International Monetary Fund.

With Thatcherite doggedness, Merkel made sure that she left the meeting in possession of a veto which will enable Germany to torpedo any future Greek rescue package that it does not like. And as if that were not enough, Merkel took the unprecedented step of threatening to boot wayward EU members states out of the eurozone in future should they continue to break the financial rules. Merkel's latest performance on the European stage has led many commentators to conclude that something disturbing is being unleashed in Germany.

They see the continent's most powerful nation and biggest net EU contributor aggressively flexing its muscles to shore up its own interests, rather than Europe's as a whole. "Has the Chancellor dispensed with the old raison d'état that ensured that the unity of the continent took precedence?" asked Der Spiegel magazine. In the Greek media Merkel has been depicted as a vampire, with one newspaper declaring: "The Germans are our greatest enemies in Europe."

Yet in Germany, Merkel has succeeded in selling her tough – and uncharacteristically robust – stance on the Greek debt problem as a major political victory. Dressed in a Thatcher-blue jacket she posed smiling in front of the cameras in Brussels alongside France's President Nicolas Sarkozy, and proclaimed that she was "delighted" with an outcome that was not simply about ensuring the stability of the euro but was about the "future of currency union" as a whole.

As the Greek debt crisis had worsened in the run-up to the summit, Germany's mass-circulation Bild newspaper had howled at the prospect of the Germans having to bail out bankrupt Greece. It now relished Merkel's apparent victory in Brussels: "Our Chancellor is forcing the rest of Europe to bite its teeth out!" the paper gloated.

For Merkel, it was the kind of foreign policy triumph that has helped her become one of the most popular post-war German Chancellors. It came at a time when she badly needed it. At home, her political fortunes are in decline as her coalition of conservatives and liberals remains locked in dispute over planned reforms, six months after being elected as the country's "dream team" government. For most of the world outside however, Merkel still reigns supreme as a sort of uncrowned queen of Europe. America's Forbes magazine has three times rated her as the world's most powerful woman. As leader of the most populous and economically powerful nation on the continent, she has been in power longer than most of her European counterparts. In France she is respected more than the hyperactive Sarkozy – with whom she manages to remain on good terms. On the European stage, she dwarfs figures such as Gordon Brown by dint of her own popularity, experience and her country's economic clout. With a British general election less than a month away, it is an open secret that Merkel's ruling conservative Christian Democrats view the prospect of a Tory government under the Eurosceptic David Cameron with a mixture of dismay and incredulity. It irks Angela Merkel personally that Cameron has seen fit to remove Britain's Conservatives from the European People's Party, the pro-Europe alliance of conservatives in the European parliament. "Under Cameron, Britain looks set to become an irrelevance in Europe," is how one German source put it last week.

At home, Merkel's lack of showiness and pretension contrasts sharply with the flamboyant style of Gerhard Schröder, her immediate predecessor as chancellor. Her "safe pair of hands" approach and has for the most part been welcomed with a huge collective sigh of relief. Until only very recently, it could have been said that in Merkel it seems as if the Germans have finally found the chancellor they always wanted. But oddly for a national leader, it has been Merkel's successes on the international stage which have brought her such popularity. The process started after she ousted Schröder when she was first elected on a wafer-thin majority back in the autumn of 2005. Almost immediately, she began the task of repairing an American-German relationship that had been shattered by Schröder's outright opposition to the US invasion of Iraq. Merkel also ended the cosy relationship Schröder had enjoyed with the then Russian President Vladimir Putin, by daring to criticise human rights abuses in Russia.

She did the same in China. At G8 summits, she has been able to appeal to Germany's ecologically conscious voters by setting targets for carbon emissions. In Europe, she has proved herself as an adept negotiator and power-broker, capable of resolving seemingly intractable conflicts at the last minute.

If anything, her reaction to the Greek debt crisis was a classic example of Merkel shaping events ultimately to suit her own political ends. Germany is a country in which the memory of the Weimar era, when citizens queued up at shops with wheelbarrows full of devalued reichsmarks, remains indelibly etched on the collective psyche. Fear of a repeat prompted Konrad Adenauer, the first Chancellor of West Germany, to introduce what became the mighty German mark. It was with great reluctance that after Germany's reunification in 1990 voters eventually accepted Helmut Kohl's decision to replace the mark with the euro. Kohl had argued that German and European unification were two sides of the same coin, and that greater European unity meant the euro.

But as the Greek crisis intensified in late March, Merkel became acutely aware that in the immediate aftermath of a global financial crisis, German voters were simply not willing to make any more sacrifices for the sake of Europe, especially in the form of a German bailout for Greece. "Never again shall we be Europe's paymasters," shouted Bild. So to safeguard her own position at home, Merkel opted to risk being called a "Teutonic Thatcher" and to play hardball in Europe for the first time in post-war German history.

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Putting herself first is something Angela Merkel appears to have learned early on in life. She is the daughter of Horst Kasner, a Protestant pastor who in the Fifties took the highly unusual step of moving house and family from Hamburg in West Germany to the depths of provincial communist East Germany, where he ran a home for the mentally handicapped. Angela Kasner, as she was then, could have been a dissident. "Very early, it became clear to me that East Germany could not function," she says now. However she was too ambitious for that.

Like Margaret Thatcher, she became a model pupil – albeit at a communist, state-run school in the country town of Templin, in Brandenburg north of Berlin. She joined the party's Free German youth movement and excelled as a student of Russian, the hated language of the Soviet occupiers. Erika Benn, her former Russian teacher, who used to give the young Angela extra Russian lessons at her home, recalls: "Angela was incredibly industrious. She used to learn vocabulary at the bus stop. She never made any mistakes. She was reserved, but not shy," she said adding: "I have never had such a gifted pupil since."

The Kasner home was unlike most others in East Germany. The church-run Waldhof home for the mentally handicapped was a privileged Western bubble surrounded by Communism. The Kasners could read Western newspapers that were brought in under church protection; they even used to play Monopoly. When the Kasners tuned in to watch television at night the Stasi secret police could tell that they were watching banned West German programmes from the way the aerial was pointing, but because of Horst Kasner's position in the church, there was little they could do about it.

Nevertheless, the young Angela was never able to rid herself of her reputation as a school swot. "She was never around when the youth of Templin went out drinking, when they went skinny-dipping in the lakes or listened to the latest pop songs," recalled a contemporary of hers, "When we went on school trip, she held scientific discussions with the teachers. That was way beyond our world. I never saw her with a boy; she was always on her own," he added.

Like millions of East Germans, Angela Merkel found a niche for herself that enabled her to survive Communism without being too affected by it. She went to Leipzig to study chemistry and then on to university; like many of her fellow students, she was able to live rent free as a virtual squatter in one of the scores of semi-derelict apartment blocks that were then a feature of communist East Berlin.

If it hadn't been for the fall of the Berlin Wall, Merkel would have probably lived a humdrum existence as an East German academic. But the collapse of Communism changed everything for her. In the euphoria that followed the fall of the Wall, Merkel quickly developed an interest in politics; she was made deputy press spokeswoman for East Germany's first and last democratically elected government. Soon afterwards, she joined Germany's conservative party, the Christian Democratic Union (CDU).

It wasn't long before she was spotted by the man to whom she owes her remarkable political career: Helmut Kohl. The two first met at a party conference in 1990. The "Unification Chancellor" realised her potential. Merkel was in many ways unique. She was young, conservative, untainted by Communism, East German and a woman. She was the ideal candidate for winning East German conservative votes. Back in 1989 there were not many young politicians who fitted that mould. Kohl used to dismiss her patronisingly as "Das Mädchen" ("the girl"), but he also quickly became her mentor and promoter in a relationship that was clearly mutually advantageous. Before long, Merkel was Kohl's minister for the environment, then his family minister, and the first East German woman in government.

Always ambitious, she worked her way up party ranks. In 2000, at the height of slush fund scandal in which Kohl was heavily implicated, Merkel saw her window of opportunity and ousted Kohl as party leader. It was a masterful coup of Machiavellian proportions. She became the new broom who swept away the old guard, but she would have never have got there without Kohl.

Angela Merkel has now been leader of Germany's conservatives for a decade. For almost half of that she has ruled as Chancellor. Yet Angela Merkel the person has been kept carefully shielded from the public. She and her husband, Joachim Sauer, a reclusive quantum chemistry professor, have an upstairs flat overlooking Berlin's Pergamon Museum in the heart of the restored city centre. At weekends they disappear to a country cottage down a cobbled lane in the depths of rural Brandenburg.

We know that Merkel occasionally bakes cakes and that she is environmentally conscious; that she uses energy-saving light bulbs. There are few anecdotes that offer glimpses of her personality. She let this slip when she appeared in the Chancellor's office to see the unveiling of a portrait of Gerhard Schröder, her predecessor and erstwhile enemy: "I knew I'd see the day on which Schröder was strung up," she quipped. She is reputed to be terrific at mimicking other politicians, but she never shows off this ability in public. Her political speeches are uninspired, some would say crushingly boring. They are usually delivered with a deadpan expression in a near-monotone. The content is more akin to a university lecture than a message designed to kindle the enthusiasm of the average man or woman on the street. At her rallies, many of the supporters are women; most say they have come to see her because they admire her.

The German Chancellor's inscrutability is fostered by the way she governs. She inhabits a large office on the seventh floor of the futuristic, white, concrete-and-glass box that is the Berlin Chancellor's office; there she sits below a portrait of Konrad Adenauer. She is assisted by a team of women advisers who are referred to as the "Girls' Camp", and whose key figure is Beate Baumann, a dour, 47-year-old CDU academic whom Merkel met in hospital when recovering from a broken leg in 1992. Baumann is the eminence grise of the Chancellery. She is there to ward off threats, and acts as an early-warning system. She is also the person who rewrites the Chancellor's speeches to make sure that they are "kept round like a polished stone", as she puts it.

How has Merkel hung on to power? In 10 years as party leader and five as Chancellor she has ruthlessly dispatched rivals and opponents. Many would argue that she has been so successful at getting rid of critics that she now finds herself ruling without opposition. For four years, she shared a grand coalition government with Germany's Social Democrats – the main party traditionally opposed to the conservatives. But in last September's election, the Social Democrats were humiliated by their worst performance since the Second World War. Merkel's CDU conservatives now rule in an alliance with the liberal, pro-market Free Democrats, in what was initially billed as a "dream" coalition. However, the coalition partners have been locked in a series of seemingly endless disputes over tax cuts and health reforms. An opinion poll last month showed that 84 per cent of Germans thought that the government parties were perpetually bickering. Only 8 per cent thought the government showed unity of purpose.

The main culprits behind the government's lack of popularity are the Free Democrats, headed by Guido Westerwelle, Germany's shrill Foreign Minister. A majority of voters blame the Free Democrats for the government's failure to make progress. True to form, Merkel has avoided much of the flak, this time by creating the impression of being on a personal mission to pilot Germany through the worst recession since the Weimar period.

But her perceived lack of vision at home, her inability to push through reforms, and her deliberate avoidance of politically uncomfortable issues like the war in Afghanistan, are all beginning to leave their mark. The US magazine Newsweek recently dubbed her "Slow- Motion Merkel". She is beginning to display an uncanny similarity to her former mentor, that corpulent sitter-out of problems, Helmut Kohl. Her popularity is beginning to wane as a result. The "Thatcher" touch over Greece was an attempt to redress the balance – but the jury is still out on whether her proposals for the Greek economy, and implicitly for the future of the euro, will work.

Early next month she faces the first major political test since her re-election when her party goes to the polls in North Rhine Westfalia, Germany's most populous state. The outcome could provide an interesting pointer as to the direction she may take in future. The ruling coalition in the state government mirrors the conservative-liberal alliance in Berlin, and if the polls are right it is on course to lose its majority.

Merkel's party is reported to be working on a plan to join forces with the Greens in the state if the liberals are defeated. She recently dismissed as "nonsense" the idea that such an alliance might work at a national level. But as one commentator remarked, "Her reaction was so heavy that it looked as if she had been caught red- handed planning a national government with the Greens." Or as her biographer, Gerd Langguth, puts it: "Nobody should underestimate Angela Merkel's desire to hang on to power."

Chancellor of a lifetime: The rise of Angela Merkel

1954:

Angela Merkel is born in Hamburg, West Germany, as Angela Kasner. Her father, Horst Kasner, a Protestant pastor, moves the family to communist East Germany, where he runs a church home for the mentally handicapped. Merkel is brought up in the GDR.

1989:

The Berlin Wall falls. Merkel, by now 35 and a university-trained scientist, starts to become involved in politics.

1990:

After working as a press officer for East Germany's first democratically elected government, she joins the conservative Christian Democratic Union (CDU), led by Germany's "Unification Chancellor", Helmut Kohl.

1990:

Germany is reunified. Meets Kohl in person at a CDU congress. In December she is elected reunited Germany's first east German woman MP, for the port city of Stralsund.

1998:

After serving as environment and family minister, she is elected CDU secretary general.

2000:

In a dramatic coup she ousts Kohl as party leader following his involvement in a damaging slush fund scandal.

2005:

Defeats the Social Democrat Gerhard Schröder, Kohl's successor as Chancellor, by a wafer-thin majority in a general election. She is forced to form a grand coalition with the Social Democrats.

2009:

Wins a second term in the September election, and forms a new coalition with the neo-conservative Free Democratic Party. Her popularity begins to wane as her coalition partners bicker over reforms.

2010:

Merkel defies the European Central Bank and many fellow EU leaders by forcing through a rescue package for the debt-ridden Greek economy involving a possible bailout by the IMF and EU. She is accused of putting German interests above those of Europe, and is compared to Margaret Thatcher.