Two German defeats come at once
RARELY is a high-flying country brought back down to earth in a single night, but that is precisely what happened to Germany recently. In both soccer and politics, the country had come to embody an unseemly mixture of arrogance and denial. It thought itself the measure of all things European, in terms of both Euro 2012 and the EU. In both cases, it was deceiving itself.
The same night that Germany was thrashed by the Italians in the championship’s semi-finals, German chancellor Angela Merkel ran up against the limits of her own powers at the eurozone leaders’ summit in Brussels. Germany’s political course since the beginning of the euro crisis two years ago had left it isolated, and she was no match for an alliance of Italy, Spain, and France.
Indeed, she had no choice but to concede and agree to far-reaching changes to the EU’s new fiscal compact that will ease refinancing of the crisis countries and their banks. The German dogma of “no payments without counter-performance and control” was thus off the table, and the bargain struck in the early hours of the morning was the opposite of what she had wanted. The fiscal compact had been reduced to a shambles even before the Bundestag approved it later that day.
In terms of addressing the eurozone financial crisis, however, the agreement reached in Brussels was anything but a breakthrough, because it never transcended the logic of narrow crisis management.
It offers no strategy for overcoming the crisis in the south of Europe, which means that the threat to the eurozone has not been removed.
Politically, the agreement amounts to a small revolution, because it has shifted the balance of power within the eurozone: Germany is strong, but not strong enough to get away with isolating itself completely from Europe’s other major players. Decisions that go against Germany are possible.
There was patent gloating about the German defeat everywhere, only thinly disguised behind strained expressions of solidarity. The full extent of the political damage that Germany’s bailout policy for the eurozone — with its austerity, mass unemployment, and economic depression — has caused in southern Europe remains to be seen.
If Merkel had wanted the agreement reached in Brussels, the outcome would have marked the beginning of a fundamental revision of the eurozone’s crisis policy — and thus an expression of successful statesmanship.
But Germany’s defeat, however widely celebrated, holds much cause for concern. First, not everything that Germany is arguing is wrong: The urgent need for medium-term fiscal consolidation and structural reforms to increase the crisis countries’ competitiveness will not go away. Equally important is the reduction of economic imbalances and European policy co-ordination to enable growth.
Second, political paranoia is rising on the German right: Everybody supposedly just wants Germany’s money, and the financial markets will not rest until Germany has invested all of its wealth and thus endangered its economic success.
Germany is being “betrayed to foreigners” by the opposition, and “good” productive capital is once again being opposed to “bad” speculative capital. In the opinion pages of some German newspapers, anti-capitalism is returning in a new form, which entails nothing less than a renunciation of Europe and even of the West.
Of course, while the German right threatens to become more nationalistic, history will not repeat itself, because today’s Germany has changed and so has its political environment. Still, an increasingly eurosceptic Germany in the heart of the EU could seriously endanger the European integration process.
While that would jeopardise Germany’s own interests, practical political action is not always rational, particularly in times of serious crisis.
The same, incidentally, applies to France, except that the French, unlike the Germans, find it difficult to transfer political sovereignty, whereas for us Germans, it is all about the money. Both of these mental/political blocks threaten the European project in equal measure.
Indeed, if the result of the recent summit means France and Germany will henceforth each forge alliances against the other, while hiding behind verbal expressions of solidarity, we might just as well forget about Europe.
Both sides must decide whether or not they want Europe — that is, full economic and political integration. Economically, they must choose either joint liability and a transfer union or monetary renationalisation. Politically, the choice is whether to empower a common government and parliament or return to full sovereignty. What we know for certain is that, just as one cannot be a little pregnant, the existing hybrid is not sustainable.
Last November, Volker Kauder, the majority leader in the Bundestag, bragged that “suddenly Europe is speaking German”. He was wrong. Just as Spain (not Germany) remains the benchmark in European soccer, so Europe speaks broken English at best. From the standpoint of safeguarding the European project, that is all for the better.
* Joschka Fischer was Germany’s foreign minister and vice-chancellor from 1998 to 2005. Copyright: Project Syndicate/Institute for Human Sciences
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