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Last updated: January 22, 2007 9:30 am

Idealist takes Davos stage

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Beyond moving the furniture round, one of the few cosmetic changes Angela Merkel made to her workplace when she entered the German chancellery just over a year ago was to remove the voluptuous bronze of a bull-borne Europa her predecessor had left on the windowsill.

As the cosmopolitan crowd that converges on Davos on Wednesday for this year’s World Economic Forum will be happy to know, the decision was a statement of taste and not an indication that Ms Merkel is turning her back on international politics.

On the contrary. With Germany chairing the European Union’s six-month presidency until July and taking the 12-month chair of the G8 group of industrial nations, the chancellor has carved an ambitious international agenda for 2007. When they gather for her keynote speech, Davos attenders can expect a swift but exhaustive tour d’horizon on her priorities.

What they cannot expect is the theatricals Tony Blair, the British prime minister, deployed two years ago when he rallied ex-US president Bill Clinton, Microsoft’s Bill Gates, President Thabo Mbeki of South-Africa, and U2’s Bono as support cast to introduce his country’s G8 agenda.

“It will be a bit German,” said one person familiar with Ms Merkel’s presentation. “Do not expect too many fireworks.” For another adviser, “Blair is a charisma genius. Merkel will be soberer. People should focus on the content.”

Jens Weidmann, the chancellor’s economic adviser, and Uwe Corsepius, her European affairs adviser, were still polishing her copy late last week and Ms Merkel is notorious for fine-tuning her speeches at the last minute. Yet a senior adviser said she would stick to the request of Klaus Schwab, the WEF’s founder, that she talk “as a G8 and EU president, not as a German chancellor”.

In 25 minutes – and before being quizzed by Lord Browne of BP and Google’s Eric Schmidt – she plans to outline Berlin’s two working programmes, from how to improve Europe’s energy security, avert climate change and boost trade with the US, to the need for better international environmental, social and legal standards as a way for old industrial nations to maximise the benefits of globalisation.

She will take a leaf or two from her speech at the European parliament last week, where she outlined her goals as EU president, including the difficult task of drawing a road map for the adoption of the European constitution.

Though often described as a pragmatist, Ms Merkel is an idealist at heart. As she did in Strasbourg, she will underpin her exposé with references to the values that bind the west together – tolerance, freedom, democracy and respect for the rule of law.

For the G8, Germany has made concessions, mainly to the UK, by putting development aid and Aids on the agenda. Yet Ms Merkel still hopes to refocus the talks on economic issues – global imbalances will be a key item – and correct what she sees as the recent drift towards softer topics.

As G8 president, the chancellor cannot afford to cast doubts over whether a multilateral deal on trade liberalisation can be achieved at the Doha round. However, attenders will be watching for hints of the scepticism pervading her cabinet.

Ms Merkel is also certain to face questions about her controversial plan, part of her EU agenda, to build the foundations for a transatlantic free trade area, starting with harmonisation of patent laws, mutual recognition of industry standards and dismantling of other non-tariff barriers.

Her supporters think a full free-trade area is achievable by 2015 and that legal harmonisation could dramatically boost cross-border investments and trade between the two regions by making a big cut in the costs of doing business across the ocean.

Hank Paulson, the US Treasury secretary, got a draft of the plan when he visited Berlin late last year. Though senior chancellery aides say the feedback from the Treasury, trade and state departments has been positive, the initiative has struggled to stir interest in Washington, where many see it as a distraction from the urgent task of bringing the Doha round to a close.

Even Ms Merkel’s most loyal political allies in Berlin, and some of her closest advisers, have yet to be won over, not to mention her sceptical partners in London and Paris.

“I would not dream of contradicting the chancellor, but my impression is that she is pretty isolated on this,” says a cabinet minister from her own political camp. “I would be surprised if this got anywhere.”

Such misgivings are unlikely to stop her. In the 17 years since this former East German physicist got into politics, she has proved a master at setting herself tough goals and reaching them whatever the costs. Ms Merkel may be short on charisma but she has vast reserves of iron determination.

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