For Merkel, 2015 was a year of pushing Germans out of their comfort zone

"Mutti," or Mummy in English, explains in large part the hold Chancellor Angela Merkel has had on the German nation for a decade.

When Juli Zeh wrote a play last year whose title was Germans' pet name for their leader, she told broadcaster NDR that she wanted to reflect the psychology of a woman “who does little and says little, but exerts tremendous power."

But if "Mutti Merkel" has had a political knack for making Germans feel she has their interests first, she has pushed them well out of their comfort zone this year with her policy on the refugee crisis.

“Wir schaffen das” – "we can manage this" – she told the nation as hundreds of thousands of migrants poured over the border by this fall. 

The phrase, modest though it was, shifted perceptions of "Mutti" abroad. Suddenly the woman noted and sometimes reviled for her caution, even earning a new synonym for indecision – merkeln – in the German lexicon, was feted for her boldness. She picked up Time’s person of the year award.

Yet it's at home where those three words could signal a shift in thought. Her commitment to tackling the refugee crisis has cost her political support and further fanned flames of racism, with arson attacks at refugee centers and a xenophobic wave of protest on the streets.

But as she works to convince Germany that the situation can indeed be managed – crucially with support from European partners – she is helping to reshape the nation's perception of itself as one that must be protected by “Mutti” to one that accepts itself as a leader, says Tony Czuczka, co-author of  “Angela Merkel: A Chancellorship Forged in Crisis.”

“She’s faced with the refugee crisis that she wants to manage in a way that doesn’t involve closing borders and walling off Germany,” Mr. Czuczka says  “She is trying to put Germany and the Germans more into a global context.”

She does not accomplish this by being rash or dropping her signature pragmatism, he adds. In fact, many argue that "wir schaffen das" does not diverge at all from Merkel's pattern of leadership.

The more than 1 million asylum seekers who have rushed to Germany this year have threatened to undo a once-unflappable chancellorship. Amid divisions within her own party, especially her Bavarian allies who have dealt with the biggest influx of refugees on the country’s southern borders, Die Zeit newspaper dubbed the crisis “the beginning of the end of the Merkel era.” At the same time, support for the populist right-wing party Alternative for Deutschland saw a jump in popularity from 3 to 10 percent, according to a poll last month. 

Some of the initial political fallout has eased. At a party meeting this month, Merkel got an unprecedented, 10-minute standing ovation for her steady hand in dealing with the crisis.

In her New Year’s speech she reiterated her confidence in Germany's approach. "I am convinced that, when tackled properly, the great influx and integration of so many human beings today is an opportunity for us tomorrow," Merkel said.

"It’s true: we live in particularly challenging times," she said. "But it’s also true: We will manage it [wir schaffen das], because Germany is a strong country."

Merkel has earned new supporters among those who celebrate the humanitarian position she has staked out – just months after she was vilified for her insistence on taking a hard line on Greece in the euro crisis. “I used to think that she was a bit uptight and disconnected from regular people,” says Kahn Özdemir, sitting in a cafe in Berlin on a recent day. “She won me over with the way she is handling the refugee crisis. It’s right to welcome them in.”

Germans are debating whether Merkel’s words of welcome were part of a broader strategy – the view of many foreign observers who praise her action – or an accidental word choice, says historian Paul Nolte. “I think there will be speculations with historians for decades to come about what Merkel herself thought when she said ‘Wir schaffen das.’ ”

Regardless, the stance elevated her leadership, he says, from someone who soothed mainstream Germans amid crises over the past decade to one who has also “set an example,” he says.

And he and others say that the policy isn’t an anomaly. Merkel's political career started with risk: publicly criticizing her one-time mentor Helmut Kohl after the former chancellor was implicated in a funding scandal. There was also her controversial abrupt shift to end nuclear energy after the Fukushima accident.

“I think it’s a bit of misunderstanding when it comes to Merkel. I think she was always pretty clear about what is non-negotiable for her,” says Sylke Tempel, editor-in chief of Internationale Politik, which is published by the German Council on Foreign Relations.

Ms. Tempel says that the refugee crisis – which shifted policy in Germany when Merkel announced that refugees trapped in Hungary by Prime Minister Viktor Orbán were welcome in her country – thrust her into one of the globe’s biggest stories and into non-negotiable territory for her. Tempel says that Merkel was essentially forced to ask: “Do we want to have a Europe where Viktor Orbán decides what our refugee policy looks like, or do we want to have a Europe that tries its best to live up to its ideals?”

Now the government must convince Germans that they really can manage. It is a risky strategy, where geopolitics take the ultimate control seat. Hans Kundnani, a senior fellow at the German Marshall Fund of the US in Berlin and author of the 2014 book “The Paradox of German Power,” says that if Europe doesn’t step in to help relieve Germany’s burden, a resentful narrative could grow about Germany helping others, especially those needing to be bailed out, but not being helped in its own time of need.

If she is successful, though, a better Germany could emerge – an aging one that needs immigration and an agile one that responds pragmatically to the realities of globalization, and ultimately a more functional Europe. Mr. Kundnani calls it a “best case scenario.”

“There is a debate around refugees in which for the first time since the eurocrisis the dynamic has been reversed. It is Germans asking other EU states for solidarity,” he says. “The best case scenario is one where you now can actually have a discussion linking all these issues together, a grand bargain where Germany receives solidarity in terms of refugees and shows more solidarity on other issues.”

• Sara Miller Llana reported from Paris.