Chapter 4

Numbers (Germany’s Subprime Scandal)

Merkel was attending the Salzburg Festival in Austria at the start of her traditional three-week summer vacation when the financial meltdown an ocean away intruded. Seated in the Felsenreitschule, a theatrical arena carved out of a former quarry, she received a text message on her mobile phone as the premiere of Haydn’s opera Armida was about to begin. The text was from Jens Weidmann, her chief economic adviser in the chancellery and later president of Germany’s central bank, the Bundesbank.1 It marked the opening salvo of a financial and economic crisis that would dictate her policy choices for the rest of her time in office, challenges for which she was unprepared at the outset.

Merkel was less ...

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