Merkel's European Failure: Germany Dozes on a Volcano
Angela Merkel's government is forcing Southern Europe to undertake profound reforms while at the same time denying its own responsibility for the consequences of its crisis policies. Germany is risking a historic failure with its shortsighted wrangling.
Under the imploring headline "We Germans Don't Want a German Europe," German Finance Minister Wolfgang Schäuble recently denied in a newspaper essay published simultaneously in Great Britain, France, Poland, Italy and Spain that Germany seeks a political leadership role in the European Union. Schäuble who, along with Labor Minister Ursula von der Leyen, is the only remaining member of Chancellor Angela Merkel's cabinet who can be characterized as a "European" in the West German mold, speaks from conviction. He is anything but a revisionist seeking to reverse Germany's integration into Europe, thereby destroying the basis for the stability of the postwar order. He is familiar with the problem that Germans must fear should it ever return.
Schäuble is reacting to a current threat. He is the one who is pushing through Merkel's stubborn course in Brussels and who can feel the cracks that could lead to the breakup of Europe's core. He is the one who, when meeting with finance ministers from the European Monetary Union, encounters the resistance of the "recipient countries" whenever he blocks renewed attempts to bring about a change in policy. The obstruction of a banking union, which would mutualize the costs associated with winding down ailing banks, is only the most recent example.
Schäuble doesn't stray so much as a millimeter from the chancellor's stipulation that German taxpayers not be burdened with more than exactly the scope of lending commitments that the financial markets demand for a rescue of the euro -- and that they have always received, as the consequence of an openly investor-friendly "bailout policy." Naturally, this rigidly pursued course does not rule out a gesture of 100 million ($133 million) for loans to small and mid-sized businesses, which the rich uncle from Berlin recently handed to the stricken cousins in Athens from the national bank vault.
A Duplicitous Game
The fact is that the Merkel administration is forcing its controversial crisis agenda on France and the "southern countries," while the purchasing policy of the European Central Bank (ECB) provides unacknowledged support. At the same time, however, Germany denies Europe-wide responsibility for the effects of its crisis policy -- a responsibility it tacitly assumes by taking on this (some would say, perfectly normal) role as a leading power. Just think of the horrendous youth unemployment in Southern Europe as one of the consequences of an austerity policy that weighs most heavily on the weakest members of those societies.
When seen in this light, the message "we don't want a German Europe" can also be interpreted in a less favorable way, namely that Germany is shirking its responsibility. Formally speaking, the European Council reaches decisions by unanimous vote. As only one of 18 members of the Monetary Union, Merkel can uninhibitedly pursue national interests, or at least that which she believes to be such. The German government derives a benefit from the country's economic preponderance, even a disproportionately large benefit, for as long as its partners don't begin to question the Germans' politically unambitious loyalty to Europe.
But how can a gesture of humility seem credible given the appearance of a policy that unabashedly takes advantage of the country's own economic and demographic preponderance? When, for example, tougher emissions rules for the nouveau-riche ostentation of luxury sedans -- entirely in the spirit of the federal government's shift away from nuclear power and toward green energy -- threaten to adversely affect the German automobile industry, the vote in Brussels is postponed, following the chancellor's intervention, until the lobby is satisfied or the parliamentary election is over. It seems to me that Schäuble's article addresses the frustrations triggered by Berlin's duplicitous game among leaders of the other euro-zone member states.
In the name of market imperatives to which there is allegedly no alternative, an increasingly isolated German government is enforcing harsh austerity policies in France and those euro-zone countries gripped by crisis. Contrary to reality, it assumes that all members of the European monetary union can make their own decisions regarding budgetary and economic policy. They are expected to "modernize" their administration and economy, and to enhance their competitiveness on their own -- if necessary with aid loans from the rescue fund.
This fiction of sovereignty is convenient for Germany, because it saves the stronger partner from having to take into account the negative effects that some policies can have on weaker partners. It is a situation that European Central Bank President Mario Draghi warned about a year ago, saying that "it is neither sustainable nor legitimate for countries to pursue national policies that can cause economic harm for others" (Die Zeit, Aug. 30, 2012).
It's worth repeating again and again: The suboptimal conditions under which the European Monetary Union operates today are the result of a design flaw, namely that the political union was never completed. That's why pushing the problems onto the shoulders of the crisis-ridden countries with credit financing isn't the answer. The imposition of austerity policies cannot correct the existing economic imbalances in the euro zone. An assimilation of the different levels in productivity in the mid-term could only be expected from a joint, or at least closely coordinated, fiscal, economic and social policy. And if we then, in the course of countervailing policies, don't wish to completely turn into a technocracy, we must ask the public what they think about a democratic core Europe. Wolfgang Schäuble knows this. He says as much in SPIEGEL interviews, which, however, have no consequences for his political behavior.
European policy is in a trap that the political sociologist Claus Offe has sharply illuminated: If we do not want to give up the monetary union, an institutional reform, which takes time, is both necessary and unpopular. This is why politicians who hope to be re-elected are kicking the can down the road. The German government, in particular, is in a double bind, because it has already assumed pan-European responsibility through its actions. It is also the only government that can take a promising initiative for a step forward -- and should pursue France's support for such a process. It isn't a trifling project, after all, but one into which Europe's most prominent politicians have invested their best efforts for more than half a century.
Politicians Should Come Clean
On the other hand, what exactly does "unpopular" mean? If a political solution is sensible, it should be reasonable to ask a democratic electorate to accept it. And when should one do so, if not before a parliamentary election? Anything else is patronizing deception. It is always a mistake to underestimate and ask too little of voters. I consider it a historical failure of the political elites in Germany if they continue to shut their eyes and behave as if it were business as usual -- that is, if they persist in their shortsighted wrangling over the fine print behind closed doors, which is the current approach.
Instead, politicians should come clean with the increasingly restless citizenry, which has never been confronted with substantial European issues. They should take the lead in an inevitably polarizing dispute over alternatives, none of which is available for free. And they should no longer remain silent about the negative redistribution effects, which the "donor countries," in their own long-term interest, must accept in the short and medium term as the only constructive solution to the crisis.
Europe is in a state of emergency, and the political power goes to whoever decides on the admission or licensing of topics to be discussed by the public. Germany isn't dancing. It's dozing on a volcano.
Are the elites failing? Every democratic country has the politicians it deserves. And there is something peculiar about expecting behavior beyond the routine from elected politicians. I'm happy to have been living in a country which, since 1945, has had no need for heroes. I also don't believe in the statement that individuals make history, at least not in general. But I do realize that there are extraordinary situations in which cognitive sensitivity, imagination, courage and willingness to take responsibility of those in charge have an impact on the progression of things.
Translated from the German by Christopher Sultan
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