Tag Archives: Joschka Fischer

Germany, a cold case

Dortmund – It used to be said that if the United States sneezed then Mexico caught a cold but in the German heartland of North Rhine-Westphalia, you get the impression that as far as the European family is concerned there has been a reversal in the relationship between the economic superpower and the lesser associate and that Greece’s sniffles are causing the Germans a big headache.

There was a state election here on May 9 that Chancellor Angela Merkel’s party lost. Her reluctance earlier this year to commit quickly to a rescue package for Greece was partly down to the fact that she didn’t want the coalition government – made up of her center-right Christian Democrats (CDU), its Bavarian sister party the Christian Social Union (CSU) and the pro-business Free Democrats (FDP) – to suffer a defeat in North Rhine-Westphalia and lose its majority in the Bundesrat, German Parliament’s second legislative chamber. But this is not turning out to be Merkel’s year and that’s exactly what happened.

Although there is no conclusive evidence to prove that the Greek crisis was the decisive factor in her party’s defeat, it did appear to have some impact. Pollsters Infratest dimap found that the Greek crisis was “important” or “very important” to 52 percent of voters. On the other hand, 47 percent said it wasn’t important. The actual election result was equally ambiguous as it didn’t leave the opposition Social Democrats in a position to form a center-left coalition to govern the state and negotiations about who will do so are still continuing. But maybe it’s in this absence of a clear cut message that one can find the true effect of the Greek crisis. Above all, it seems to have disorientated the Germans –  Merkel and her citizens appear to be confused about what kind of Europe they want and what role Germany should play within it.

Merkel had wanted to bring a “culture of stability” to the European Union but her actions have been more schizophrenic than stable over the past few months. First she procrastinated over whether to come to Greece’s aid then she allowed French President Nicolas Sarkozy to play the lead role in constructing an unprecedented 750-billion-euro EU support framework for debt-ridden countries. Now, Merkel has sprung into action and over the last few days has called for a global levy on banks and the creation of a new European credit rating agency, as Germany unilaterally banned naked short selling of eurozone government bonds and other securities.

This has all played out against the backdrop of a divided domestic opinion – 52 percent of Germans support the Greek aid package and 43 percent are against it according to a poll by Forsa for Stern magazine on May 5 and 6. In North Rhine-Westphalia, Germany’s richest and most populous state, it’s easy to see why Greece’s debt and borrowing problems seem like a world removed. Whereas Athens has been faced with interest rates of more than 7 percent above the German bund rate, North Rhine Westphalia is paying just 0.35 percent more than Berlin to borrow money. Equally, committing funds to bail out Greece galls some Germans when their government has agonized over whether to prop up Opel, the local subsidiary of General Motors, and the Karstadt department store group. Maybe it’s no surprise that Germans are split over the way forward.

There is a feeling, however, that this indecision starts with Merkel. “Her whole governing style in domestic politics since she became chancellor has been one of hesitation, cowardice, not taking a stand, not doing what a leader should do,” Florian Hassel, a business reporter for Die Welt daily told Athens Plus.

“Her lack of solidarity with Europe this year has made many Germans feel extremely uncomfortable,” Daryl Lindsey, the editor of the online version of German weekly magazine Der Spiegel told Athens Plus. “The idea of Germany being isolated in Europe is horrifying to most Germans because the country’s strong role in fostering European integration is a large part of what has created the modern Germany which has been able to move forward from its difficult history.”

Having a flummoxed Germany as the EU is facing a cascade of new challenges could be a disaster for the Union, especially when the problems the euro has run into mean that more, not less, cooperation is needed. “It has become apparent that the euro was a fair-weather construction from the beginning and that you cannot have an economic union in the long run without a political one,” says Hassel. “But as few Europeans are willing to move forward with a political union, we have a crisis on our hands which will last a long time.”

However there is some hope that Germany will snap out of its stupor. The swift agreement between EU leaders earlier this month to put together the 750-billion-euro guarantee was “close to a miracle,” according to Lyndsey who thinks it’s a sign that Germany could yet be a champion of European solidarity. “It actually shows the extent to which European unity already exists,” he says. “If Merkel is ready to state that the threat to the euro represents an existential threat to the European Union, then I think she and the Germans are ready to fight to save it.”

Germany’s participation in the so-called “shock and awe” package, which may reach some 150 billion euros, was approved by the country’s Parliament last week. It could prove a pivotal moment for Germany, which has profited so much from membership of the EU and eurozone, which are captive markets for its exports, just at his from its business, banking and defense dealings with Greece. “We’re doing this in our best national interests… the common European currency has been a huge benefit to Germany,” said Finance Minister Wolfgang Schaeuble before last week’s aid vote. “Without the euro, we would have a much weaker economy, a much weaker Germany.”

It’s clear, though, that much more than the future of the euro and the continent’s economic stability is at stake. The crisis is not just an economic one, at its root it is political. The real question being asked of EU countries is not what fiscal policies they should follow but how closely coordinated and managed they should be. In other words, how much solidarity is enough and how much integration is too much? “It isn’t just about a currency but about the European project per se,” Germany’s former Foreign Minister Joschka Fischer told Der Spiegel in an interview this week. “It’s about the issue of whether Europe is strong enough and has the common desire to defend its project against external attacks, in this case, by speculators.”

With the stakes so high, we may see a much more decisive Angela Merkel from now on, suggests Lindsey. “There has always been a feeling in Germany that Merkel’s background as a scientist is too often reflected in her political decision-making. Logic and reason are comforting in situations that permit slowly calculated decisions, but that scientific thinking appears to be incompatible with fast moving markets.” He believes the criticism she has received for dithering over key European issues “is likely to be highly motivating for the German chancellor.” He also thinks public opinion will gradually swing behind efforts to bolster the union. “The money required to save the euro will directly affect German quality of life, but people are slowly coming to terms with this now and they know that the alternative would be far worse.”

In the meantime, we wait to see if Germany has contracted a common cold that it will soon recover from or whether it has a case of pneumonia that could prove deadly, not just for the patient but for the rest of the family as well.

This commentary was written by Nick Malkoutzis and appeared in Athens Plus on May 28.

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Like a rolling stone

Illustration by Manos Symeonakis

When she contested the German chancellorship in 2005, Angela Merkel angered the Rolling Stones by using their 1973 hit “Angie” as her campaign theme without the band’s permission. Her dominant role during last week’s negotiations in Brussels, where the eurozone members agreed on financial assistance for Greece, has prompted concern throughout Europe that Merkel is going to make a habit of ignoring others’ wishes.

Apart from the connection with her Christian name, “Angie” was a strange song for Merkel’s campaign team to pick. Maybe they just took a calculated gamble that few Germans would pay attention to lyrics such as: “With no loving in our souls and no money in our coats/You can’t say we’re satisfied,” or “All the dreams we held so close seemed to all go up in smoke.”

These words, however, had a particular resonance over the last few days as Europe appeared to wake up to a new reality in which Germany is no longer willing, as German daily Bild put it, to be “Europe’s paymaster” without shaping the policies that govern how that money is spent. As the German weekly magazine Der Spiegel explained, Merkel’s stubbornness represented a “paradigm shift” for a country that has always been at the heart of European affairs and whose main goal has been not to isolate itself. “Merkel has made it clear that there are German interests and European interests, and that they are not necessarily the same.”

Greece, without any money in its coat, certainly found that Merkel was short of loving in her soul. The German chancellor was adamant that Athens should not be given a cash injection unless it was teetering on the precipice and that the International Monetary Fund should be involved in the bailout. Merkel got her way, and it wasn’t just Greek dreams that went up in smoke. The French had perhaps most cause to be frustrated with her intransigent stance. President Nicolas Sarkozy had been hoping he could lead the EU to new territory – land on which the Europeans could regulate their economic and financial affairs without the help of the Washington-based IMF or anyone else.

The only thing Sarkozy managed to rescue from the dying embers of this grand vision was a commitment for the EU to begin thinking about how the bloc’s economic affairs could be managed centrally. However, even his desire for a so-called EU “economic government” was watered down to “economic governance” in the English wording of the text, largely at the behest of British Prime Minister Gordon Brown who has a May general election to fight and does not want to incur the wrath of British euroskeptics. Sarkozy admitted the plan unveiled in Paris last week was the product of “compromise” but it’s clear he was the one doing most of the compromising. The view in France, where Sarkozy is already on shaky ground, especially after his recent drubbing in regional elections, is that Paris failed to defend its vision of Europe. As leading French economist Jean-Paul Fitoussi told Le Monde daily: “This plan tells the world that Europe does not want to settle its affairs on its own.”

Even in Germany there were some dissenting voices, unhappy that their country had played tug-of-war with other EU members rather than toeing its usual European line. “Up to recently, Merkel has come across as Dame Europe,” said former Vice-Chancellor Joschka Fischer. “Now she seems to have transformed herself into Frau Germania.” But Fischer finds himself in a minority if the reaction of the German press is anything to go by. For most of the media Merkel was neither dame nor Frau but simply Super Angie. “Merkel has won against all odds… the power play has done Europe a favor, putting the profligate on notice that they have to do their homework and at last impose fiscal discipline rather than counting on Europe to keep them in the style to which they are accustomed,” wrote Josef Joffe, publisher-editor of the weekly Die Zeit.

Paul Taylor, an astute observer of European affairs for Reuters, went a step further in analyzing the impact of Merkel’s victory. “The masks have fallen,” he wrote. “From now on, we will all be living in a more German Europe, with economic policy driven by Berlin’s hair-shirt export-or-die model.”

There is no doubt that Merkel’s line in the sand is a significant moment in European affairs but rather than the death-knell for solidarity and cooperation, which it clearly isn’t, we should perhaps see it as another chapter in the ongoing existential tussle that underpins the EU. Since its inception, every single member state, every single leader has had to wrestle with the idea of how much authority, sovereignty and responsibility to hand over from national to European Union hands. No country, not even Germany, is yet comfortable with the idea of sacrificing national interests for European ones. No leader is yet in a position to put the European agenda above a domestic one. Just as Sarkozy and Brown had personal concerns going into last week’s talks, so Merkel needed to stand her ground for domestic reasons. Her center-right coalition’s majority in the upper house is at stake in a May 9 state election in North Rhine-Westphalia and opinion polls have not been favorable.

So, rather than look upon last week’s agreement as a boon for Greece, a defeat for France and a victory for Germany, we should view it as the imperfect but nevertheless tangible outcome of a democratic process the scale of which is unrivalled anywhere in the world. As Lorenzo Bini Smaghi – a member of the European Central Bank’s executive board – admitted, the involvement of the IMF in the aid package was not ideal but was the product of “real politics.” “We live in a world in which second-best solutions are sometimes the most realistic ones,” he said.

It may have been an outcome of an unequal compromise driven by national interests, it may have given the IMF a role in European affairs when it wasn’t absolutely necessary and it may have brought only a vague commitment for better coordinated EU economic management but the Brussels plan is a step toward greater understanding and cooperation between the 27 member states. In a relatively short space of time, the EU has shown it can adapt to fluctuating situations and that there is awareness within the Union that tomorrow’s challenges are likely to require more imaginative thinking and bolder decision-making. Above all though, the commitment made to Greece last week underlines that the EU is still a work in progress – sometimes that progress will be slow, even torturous, but it’s forward motion. And, after all, a rolling stone gathers no moss. Isn’t that right Angie?

This commentary was written by Nick Malkoutzis and appeared in Athens Plus on April 2.