The global recession has hit Germany hard; its economy will likely shrink by 6 percent this year alone. Why should you care? Because it has the biggest economy in Europe and it’s the biggest exporter in the world. More than that, you should care because an economic meltdown in Germany could change the course of history. That’s not an overstatement. In the 1920s, massive hyperinflation rendered the German currency worthless; at 1 trillion marks to the dollar, a wheelbarrow full of cash wouldn’t buy you a newspaper. In response to the dismal situation, the country turned to fascism, allowing the Nazi party to come to power, which in turn led to World War II.

So, at a time like the present, when the German economy stands on the verge of collapse, it would be comforting to know that the country has a calm, rational leader at its helm—one who listens well to others and believes in personal freedom. The good news is that it does, in the form of Angela Merkel, Germany’s first female chancellor and its most popular leader since, well, Hitler.

Behind the Iron Curtain

Born in 1954, Angela Merkel grew up poor in East Germany, where her father was a Protestant minister. Because it was a communist country, the government held him in constant suspicion for worshiping something other than the state. When Angela was a teenager, the Stasi—East Germany’s vicious secret police—interrogated everyone in the family. Young Merkel wasn’t tortured, just intimidated and asked to spy on her family. She refused.

Nearly 20 years later, the Berlin Wall came down. Angela, who’d earned her Ph.D. in chemistry, was working as a scientist in an East Berlin lab at the time. When officials announced that travel to West Berlin was no longer forbidden, she did what many East Berliners did that day: She walked to the other side. Standing on the streets of West Germany, Merkel was overwhelmed by the possibilities of freedom. In that moment, she decided to make politics her career.

Merkel wasn’t completely without experience. In her youth, she’d served as an officer of “Agitprop” (Agitation and Propaganda) for the state’s communist youth organization. Although her work had focused on promoting the sciences, she parlayed her previous experience into a new gig in the burgeoning democratic movement. Within months, she became East Germany’s press secretary. Next, after the country officially reunified with West Germany in October 1990, she ran for Parliament and won. The following year, Chancellor Helmut Kohl made her the youngest member of his cabinet.

Part of the reason for Merkel’s meteoric rise was that, after spending her childhood behind the Iron Curtain, she appreciated free markets and small government. That led her to join the Christian Democratic Union, a conservative, male-dominated party akin to the moderate wing of the Republican Party in the United States. The Christian Democrats enjoyed using Merkel as their poster child for diversity, which helped her move up the party ranks.

The other reason for Merkel’s rapid rise was simply her intelligence. Her experiences as a scientist taught her an analytical approach to problem solving that the popular press would later dub the “Merkel Method.” As Germany’s minister of the environment in the mid-1990s, she pushed for the creation of the Kyoto Protocol, the international agreement to curb greenhouse gases. It’s not surprising that, as a scientist, she would lead the fight against global warming. But as a conservative, it was an unlikely move. By Merkel’s calculations, it was all about capitalism. “Unchecked climate change is likely to result in at least a 5 percent reduction—and even a 20 percent reduction—in global GDP,” Merkel said in 2007. “Effective action to protect the climate would cost a good deal less—around 1 percent of the global GDP.”

Under Merkel’s guidance—both as the minister of environment and, later, as chancellor—Germany has introduced an environmental agenda that puts other European nations to shame. For example, while England only produced 3 percent of its electricity from renewable resources in 2007, Germany managed 14 percent. Merkel’s goal is that by the year 2030, 45 percent of Germany’s electricity will be renewable.

The Rational Choice for Chancellor

Even with her party’s full support, getting Merkel elected chancellor in 2005 wasn’t easy. Many Germans disliked the idea of a woman governing the country. Others thought she wasn’t woman enough. They saw Merkel as a rational and clear-headed politician, but also a cold and calculating one. Despite being married (she’s been married twice, in fact), Merkel was roundly criticized for not having children and for her austere physical appearance, which is why in 2005, Angela Merkel started wearing make-up for the first time in her life.

At the end of election season, her party, the Christian Democrats, won only 35.2 percent of the seats in parliament. The other major party, the Social Democrats, won 34.4 percent. Because neither party had a majority, German law dictated that they had to come together and broker a deal to select the next chancellor. The process was tantamount to getting all the moderate Republicans and Democrats in Congress to agree on the same person for president. In other words, it was a mess. After three weeks of debates and backroom negotiations, Merkel was named chancellor on November 22, 2005. However, pundits feared she would have no mandate to lead the country. Within a few short months, Merkel would prove them all wrong.

Almost immediately upon taking office, the new chancellor made her mark on the world stage. Merkel met with leaders from the United States, France, the United Kingdom, Russia, and China, and took charge of the European Union summit meeting in December. For much of the previous year, the European Union had operated without a budget, largely because the British and the French spent more time trading insults than working together. Using her studious, analytical mind, Merkel listened carefully to the needs of all 25 member nations and quickly crafted a compromise that appealed to both Tony Blair and Jacques Chirac. By the end, the European Union had a budget. The only real moment of tension during the summit came when the delegates were served cold cod soup, a British staple. All eyes were on Jacques Chirac, but to the relief of everyone in the room, he consumed it without saying a word. Soon, Merkel was enjoying an 80 percent approval rating, the highest of any German chancellor since WWII.

During the past four years, Merkel’s numbers haven’t stayed quite that high, but she’s had consistent support from the majority of her people. Germans respect her level-headed style. She supported the Iraq War (as a former resident of East Germany, she believes in ending despotism and protecting human rights), and then criticized President Bush for Guantánamo Bay (same reason). Her relationship with President Obama so far has been strained, mostly because they have fundamentally different philosophies on how to fix the global economic crisis. Obama believes Merkel hasn’t done enough to promote stimulus spending in Germany, and Merkel believes Obama underestimates the risks involved with making the economy flush with cash. Her biggest fear is inflation, something Germans know plenty about. No one wants to return to pre-World War II Germany, but thanks to Angela Merkel, that’s not really a concern.

This article originally appeared in mental_floss magazine as part of Jenny Drapkin’s look at “The 5 Gutsiest World Leaders.”