Merkel may be struggling, but don’t count her out

"Merkel has proved herself time and time again to be smart, adaptable and resilient"

Is Angel A Merkel in trouble? she hopes to win a fourth term as Germany’s Chancellor this fall, but recent polls show her trailing Martin Schulz, candidate for the center-left Social Democratic Party. The news made headlines across Europe because Merkel has been the one European leader in recent years who projected cool headed, mainly popular leadership through the Continent’s various crises.Yet she’s on the back foot for now. That’s hardly surprising given everything that’s gone wrong for her since TIME named her Person of the Year in 2015. 

Then, Merkel’s politically courageous decision to admit more than 1 million migrants, many of them from the Middle East, into Germany over the course of two years won her plaudits across the globe. In Germany, however, the policy has been bitterly divisive—and as violent crimes have been blamed on refugees and terrorist attacks have struck Berlin and elsewhere, the criticism has intensified. Many Germans are now angry that their taxes will pay for the resettlement of refugees.On the world stage too, Merkel looks increasingly isolated. 

Britons have voted to abandon the E.U. ship she has stewarded through turbulent waters, and French presidential candidate Marine Le Pen wants the same for her people. In the U.S., Barack Obama has given way to Donald Trump. Other European leaders have gone soft on her determination to call Russian President Vladimir Putin to account for bullying and lies.But don’t bet against Angela Merkel. 

She remains popular, with one recent poll giving her a 74% approval rate—in part because Germans consider her a credible foil to the turmoil on all sides. She’s proved herself time and time again to be smart, adaptable and resilient. Her greatest advantage though may be Germany’sdesire for stability.

Her key rival is no insurgent fire brandin the Trump–Le Pen mold. Schulzis a former president of the European Parliament who backs European integration, defends refugees, criticizes Trump and vilifies Putin. The main populist alternative, the far-right Alternative für Deutschland party, is polling at just 12%.Germans don’t share the hunger for change we see in other countries. A Feb. 6 poll by Ipsos Global Advisor reports that while 80% of respondents in France and50% in Britain want “a leader that will change the rules of the game,” just 21%of Germans said the same. 

In addition,while 70% in France and 67% in Britainsay their country needs a strong leader to restore order, just 34% of Germans said the same.Perhaps that’s because Germany already has a strong leader.

Trump’s hard line on Mexico gives left-wing populist an opening

" Andrés Manuel López Obrador has promised to hike spending, tackle graft— and stick it to Donald Trump"

President Trump will honor his pledge to build a border wall, and he has answered Mexico’s refusal to pay for it with threats of a 20% tax on Mexican imports. He says he’ll renegotiate NAFTA, and Mexicans fear he’ll try to limit investment in their country’s manufacturing and automotive sectors to revive those industries in the U.S. So how will Mexico respond? It could answer Trump by electing a populist firebrand of its own—a President of the left who vows to punch back.

Mexico’s current President, Enrique Peña Nieto, had plenty of problems long before Trump entered the White House.Corruption scandals and his failure to put an end to Mexico’s bloody drug wars have driven his poll numbers down in recent years. His approval stood at 12% as 2017 began, according to a survey published by the newspaper Reforma, amid inflation, currency volatility and a stagnant economy. 

Public rage reached a boiling point in January when dwindling state revenues forced Peña Nieto to slash government fuel subsidies, abruptly hiking gasoline prices on consumers by up to 20%. Protests and looting followed.Peña Nieto’s legacy will likely be marked, however, by his inability to defend his country’s dignity from Trump’s threats. Already term-limited, he is now well on his way to political irrelevance. Yet Trump’s aggressive push will have a discrediting effect on Mexico’s entire political class, creating a golden opportunity for a populist presidential candidate in the 2018 presidential election.

Enter Andrés Manuel López Obrador, a veteran leftist who has promised to hike public spending, tackle corruption and—crucially— stick it to Donald Trump. “Enough of being passive,”he said recently. “We should put a national emergency plan in place to face the damage and reverse the protectionist policiesof Donald Trump.” López Obrador has run unsuccessfully for the presidency before, in 2006 and 2012, with the center-left Party of the Democratic Revolution. 

But under the banner of his new, left-wing Morena party he is polling ahead of his 2018 rivals. A President López Obrador wouldn’t make Mexico the next Venezuela and would be unlikely, despite his promises, to reverse Peña Nieto’s much-needed energy-sector reform. But he would bring consistent opposition to Trump and foster a more general anti-U.S. sentiment.

If you don’t know what the former Mexico City mayor looks like, you will soon. To dramatize his scorn for Trump, López Obrador will tour major U.S. cities with large populations of citizens of Mexican origin in February. Trump might start to wish he had made a quicker start on that wall.

Britain’s Theresa May is all-in on Brexit with lousy cards

"As two years of bargaining begins, rivals within herparty will make her pay for every concession"

On Brexit, Prime Minister Theresa may has played a horrible hand as well as anyone could. She has managed to maintain unity within her Conservative Party and worked hard to overcome suspicions that she isn’t committed to leaving the E.U. Setting out her objectives in a Jan. 17 speech, she made clear that Britain will reassert control of its borders and will not accept the E.U.’s judicial author­ity.

From that starting point, her government will then work to get the best deal possible for Britain’s economy. After being criticized for playing her cards too close to her chest, she now has solid backing at least from those on her side of the bargaining table. The Jan. 24 Supreme Court ruling on Parliament’s role in the process is unlikely to delay the for­mal triggering of Brexit in the spring.

In addition, May has won conciliatory signals from Germany, by far the most im­portant player on the other side. In a January speech at Davos, Finance Minister Wolfgang Schäuble pledged to do all he can to secure a deal that works for both the U.K. and the E.U. This will give May room to build a strategy.May also understands that a U.K. out­ side the E.U. will need as many friends and commercial partners as it can get. 

That’s the subtext behind her visit to see President Trump on Jan. 27. It’s the first step toward a future trade deal that can be finalized quickly after Britain finally leaves the E.U.But it’s still a bad hand she’s playing, and darker days will come. As two years of hard bargaining begins, rivals within her party will make her pay for every concession toward compromise, and her position will become more precarious if, as expected, Britain’s economy weakens.

May won her job without an election,and her mandate re­mains in question. Nor should the goodwill a crossthe table be over­estimated. German flexibility is impor­tant, but Chancellor Angela Merkel is los­ing clout within Europe, and others on the E.U. side will work hard to ensure that Britain doesn’t get a deal that makes exit look ap­ pealing for other member states like France or Italy. 

May can’t cut a deal with Trump, or anyone else, until negotiations with the E.U. end, likely in 2019. It’s reasonable to wonder whether May can survive that long.That said, it’s also an open question whether the E.U. itself will exist in its cur­ rent form in two years’ time. In modern­ day Europe, almost nobody is flush with aces.