Isolated in Brussels Merkel Clashes with EU Commission

Even as the euro crisis grows less acute, Europe is stuck. The European Commission is resisting any loss of its power, and many member states are tired of German dominance. Opponents of Europe, including those in Merkel's camp, sense an opportunity.
Angela Merkel at the recent EU summit on Dec. 19 in Brussels: The chancellor has become bogged down in her attempt to lead the Europe.

Angela Merkel at the recent EU summit on Dec. 19 in Brussels: The chancellor has become bogged down in her attempt to lead the Europe.


On page 157 of the coalition agreement between Germany's center-right Christian Democratic Union (CDU) and the center-left Social Democratic Party (SPD), at the beginning of the section on Europe, there is an oldie that many German governments have crooned in the past. It has to do with the German language -- that is, its use in the European institutions. "German must be put on equal terms, in practice, with the other two procedural languages, English and French," the document reads.

It's a pious hope that will likely remain one, just as it was in the days of former German Chancellors Helmut Kohl and Gerhard Schröder. They too wanted to hear more German spoken in the everyday deliberations of the European Commission and the European Parliament. Of course, there has been no change to the dominance of English and French to this day.

There is no evidence that the current chancellor, Angela Merkel, has ever paid more than lip service to the decades-old language dispute. She couldn't care less whether negotiations and meetings are conducted in English or French. To Merkel, it's more important that her Europe of the future becomes significantly more German. She wants Europe to become a different place, and certainly not the Europe Helmut Kohl envisioned. Merkel's Europe is no longer dominated by the European Commission, but instead is a place where the nation states become increasingly important. This would signify a departure from the history of European development over the course of more than six decades, as well as being a part of Germany's national interest.

That would spell the end for the so-called "Monnet Method," named after the Frenchman Jean Monnet, a bold postwar visionary who, above all, was a gifted tactician. His name stands for the leitmotif of European unification, which he devised: That powers are "communitized" whenever politically feasible, and wherever it is objectively appropriate. This meant that the European Commission in Brussels, the "custodian of the treaties," would gradually become more powerful.

In practice, since the 1950s this has meant: first coal and steel, then agriculture, the large internal market for goods and services, the euro, powers in domestic and judicial policy, social issues, foreign affairs and preferably a common military. Following every amendment to a treaty, and following almost every landmark decision by the European Court of Justice, the EU's highest court, the European Commission and the European Parliament ended up with more powers than before, while the member states' powers declined.

Resistance to Merkel Grows

Anyone who wishes to depart from this principle is likely to encounter resistance, which means that Merkel needs allies. But the record doesn't look good for the German chancellor at the moment, as she faces growing resistance and is losing allies.

The Germans haven't been on such bad terms with the European Commission in a long time. Brussels is using what is probably its strongest weapon, competition law, to threaten Merkel's most important domestic project at the moment, the federal government's shift away from nuclear power and toward green energy, also known as the Energiewende. Conversely, Merkel is hardly making a secret of her view that the European Commission should not be closely involved with the next major steps toward a closer economic and monetary union. In her view, the member states should remain in control when it comes to the further restructuring of Europe -- a challenge to the power-conscious eurocrats and their communitized powers. Commission President Olli Rehn has commented critically, that the community method is needed to fully integrate the small member states into decisions.

Berlin has no trouble accepting this conflict as a fact of life, and the chancellor and her advisers are willing to take their chances. But the Germans are now largely on their own among member states. Both small and large EU countries blocked Merkel's latest push for a reform-oriented, common economic and fiscal policy, using Germany as a model. At the EU summit in the second half of December, Merkel was confronted with harsh words from several European leaders, and the mood at the table turned against her. After the meeting, German EU Commissioner Günther Oettinger had this warning for the Chancellery: "Although Germany is the largest member state, it's still only one of 28. Following the Lisbon Treaty, majority decisions in the EU have increased. This is why Berlin must show a willingness to compromise, just like everyone else."

Brussels is at an impasse. For the moment, the chancellor has become bogged down in her attempt to lead the EU.

Commission President José Manuel Barroso was one of the first targets of her anger. At the EU summit, Merkel took the Portuguese politician aside and flatly told him that the proceedings by the Commission against Germany's renewable law -- the German Energies Act (EEG) -- on the grounds it breaches EU competition regulations was an "affront." She told Barroso that Berlin was certainly willing to discuss the exceptions for energy-intensive businesses, which had been significantly expanded recently. But a general attack on the centerpiece of the German Energiewende policy was presumptuous, Merkel said. Since 2002, the European Commission had never raised any fundamental objections to renewable energy, she added, so why now?

Commission Pushes Forward

But the Commission plans to stick to its guns, and the proceeding is continuing as planned. And the EU's executive has even more up its sleeve that will further fuel the conflict. For instance, in Germany energy-intensive companies are not only largely exempt from the EEG reallocation charge, but also from fees for the use of power lines. A decision as to whether this is compatible with competition law will likely be made in the first half of 2014. For some time, Brussels has also been looking into government subsidies for many German regional airports, from Frankfurt-Hahn to Zweibrücken and Kassel-Calden . Brussels also holds a critical view of Deutsche Bahn's monopoly in the rail network, while the European Commission finds fault with the prices that private railroad operators must pay to use the routes.

And the scrutiny of large German export surpluses has only just begun. And although the Chancellery concedes that this scrutiny is formally justified, Berlin is furious nonetheless. It argues that the Commission has granted France and other countries longer grace periods than originally planned to bring their budget deficits below the admissible limit.

Some partners feel a certain sense of schadenfreude to see the Germans coming under fire, as became apparent during a recent dinner hosted by the Italian ambassador to the EU. For almost two hours, the discussion also revolved around German trade surpluses. To the great amusement of everyone present, one of the guests suggested that the surpluses could be offset by German penalty payments for the EEG.

The German representatives in Brussels are doing their utmost to defend themselves in the proceeding, but Commission President Barroso has nothing left to lose, with his term ending in the summer of 2014. And his relationship with Merkel is unlikely to improve anymore at this point, despite the critical role she played in providing him with two terms at the head of the Brussels Commission. It isn't something she wants to be reminded of today.

Critics of the Commission at the Chancellery have since prevailed, most notably the department head for Europe, Nikolaus Meyer-Landrut. From Berlin's perspective, the European Commission wants too much and is not capable enough. Berlin sees Barroso as being out of his depth and the group of commissioners as uncontrollable.

For officials in Berlin, the example of "olive oil jugs" is a case in point. In May, a spokesman for the European Commission announced that the small, open containers on millions of restaurant tables in Europe were to be completely banned. In the future, olive oil was to be served in a "special closed container that cannot be refilled." The Brussels agency argued that its aim is to improve hygiene and consumer protection, and that the new rule would prevent customers from being served bad olive oil. But the presumably well-intentioned provision was not well received. Alarmed by the public outcry, the Commission backtracked, and there was suddenly talk of a solo effort by Agriculture Commissioner Dacian Ciolos.

An Unruly Commission

The sheer size of the European Commission is indeed a problem. But because each country ultimately wants to keep its own commissioner, in May the heads of state and government, including Merkel, rejected a plan to reduce the number of commissioners, which was in fact stipulated by treaty. As a result, the center of power in Brussels, with a total of 28 commissioners, will remain almost twice as large as the German cabinet. This leads to bizarrely structured areas of responsibility. For instance, Commissioner Androulla Vassilious, who is from Cyprus, is in charge of culture, even though the European Commission, under the Lisbon Treaty, has no right to intervene in this area. Maltese native Tonio Borg is also in charge of something that the EU has no authority to regulate: health policy. Four other commissioners share foreign policy responsibilities: Foreign Affairs and Security Policy (Catherine Ashton, Great Britain), EU Enlargement and Neighborhood Policy (Stefan Füle, Czech Republic), Humanitarian Aid (Kristalina Georgieva, Bulgaria) and Development Policy (Andris Piebalgs, Latvia).

Berlin officials feel that the Commission is not taken seriously where it should be. Only 10 percent of the Commission's recommendations to EU member states on issues of economic policy were actually implemented in 2012. The Commission skeptics at the Chancellery suspect that there is something very fundamental behind this. They note that in the wake of the acute euro crisis, major reform decisions are now on the agenda, which will no longer be assigned to Brussels officials, because only national governments can justify them to their parliaments and citizens. "Only nation states can justify the reforms that are now truly necessary," says one of Merkel's key advisers. A pension reform in one country and a relaxation of protections against employee dismissal in another are not the kinds of issues that can be entrusted to the "communitized competency" of the European Commission, say German officials. Decisions with such explosive domestic force for national governments can only be made by the governments themselves -- within the European Counil, the powerful body comprised of the leaders of the 28 EU member states.

In this context, Merkel recently came out as either a winner or a loser. But in most cases she was largely alone.

The Germans prevailed with her ideas for a banking union, against the conceivably broad resistance of the remaining 17 euro countries. For months, German Finance Minister Wolfgang Schäuble (CDU) had been reluctant to grant the European Commission the last word in the liquidation of ailing banks, and he prevailed in the end. In the future, representatives of national liquidation agencies will decide which lenders are to be shut down, if necessary. Although the European Commission can oppose the vote, the finance ministers of the member states, that is, Schäuble and his counterparts, can remove the Commissioners' objection.

The decision on the banking union paves the way for more extensive and deeper integration. But in a departure from the policies of the past, the step chiefly strengthens the rights and powers of the member states, not the Commission. The move had Germany's handwriting all over it, but it also led to new tensions. When the finance ministers were about to toast the agreement with sparkling wine, a Southern European diplomat reportedly turned away, according to the Süddeutsche Zeitung newspaper. Everything tasted German on that evening, the diplomat apparently said, and "I don't drink German sparkling wine."

An Unresolved Euro Crisis Dispute

This resentment stems from the unresolved dispute over the right approach in the euro crisis and the lessons to be drawn from it. In 2010, to be able to monitor debtor nations more closely, Merkel almost singlehandedly ensured that the IMF would assume part of the control over bailout programs, and not the European Commission alone. Since then, Germany, using its domestic "Agenda 2010" -- a package of reforms undertaken by former Chancellor Gerhard Schröder to reduce long-term unemployment benefits and otherwise streamline the social security system -- as a model, has pressured the southern countries to implement reforms and austerity programs. They, in turn, want Berlin to promote German domestic consumption more heavily, invest more and export fewer goods to other euro countries.

No one can force Germany, the perceived class geek, to do so. But at the most recent summit, the other EU leaders at least had the strength to put a stop to Merkel. She had emphatically proposed a common, coordinated economic policy in which the euro countries would commit themselves to structural reforms in individually tailored agreements. "If we do not embark on further reforms, we will eventually run into trouble again," Merkel warned at a dinner of the heads of state and government. But not even traditionally pro-German countries like Austria, the Netherlands and Finland agreed with her proposal, let alone the Southern Europeans.

"I don't need these reform agreements," Spanish Prime Minister Mariano Rajoy snapped. "I don't need anyone else to tell me about reforms, because I've already done that." Merkel's concept was "simply half-baked," Austrian Chancellor Werner Faymann said critically. Merkel continued to pursue the idea and bluntly warned that if individual countries ran into trouble again soon, they could not expect to see any German money. "Don't think that the Bundestag will rush to their assistance again." But her arguments fell on deaf ears. Her idea was postponed, in a serious setback for Merkel.

At the beginning of 2014, Merkel's new, German Europe is still up in the air, facing resistance from the Commission and with hardly any support from other member states. And her next move is to mobilize the Christian Social Union (CSU), the CDU's Bavarian sister party, to take a more general anti-European approach.

The CSU is planning a European election campaign that is decidedly anti-Brussels, as indicated by a four-page strategy document drafted by the CSU regional committee for the traditional meeting of its members of parliament in the Bavarian resort town of Wildbad Kreuth. "We need a withdrawal therapy for commissioners intoxicated with regulation," the document, titled "Europe's Future: Freedom, Security, Regionalism and Public Responsiveness," reads. One of the stated goals of the document is to reduce the size of the European Commission. The CSU proposes the establishment of a new court to take tougher action against the Brussels agency exceeding its authority. "Disputes are to be decided by a European competency court, which would include constitutional judges from the member states." The CSU proposes that referendums be held for important EU decisions, and that EU powers generally be transferred back to the member states. "This could apply to parts of the overregulated internal market, as well as regional policy," the document reads.

The chancellor doesn't want to go that far. But her pivot away from Germany's traditional policy on Europe is also easy to misunderstand. Merkel wants less "Brussels" but "more Europe." But to bring joint control into the Brussels body to which she belongs, the European Council, Merkel must publicly confront the European Commission with its mistakes, so as to deprive it of some of its power. The opponents of Europe are just waiting for that, even in their own camp -- and they are far from satisfied with merely a little more emphasis on the German language in Brussels offices.


Translated from the German by Christopher Sultan
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