The German elections took place last Sunday, September 24th, and the results are quite paradoxical, as victories look like defeats and defeats look like victories.
The “Great Center” formed by the CDU and SPD won again, but everything suggests that it will not govern the country because, for the first time, it bears the heavy responsibility of having allowed a high growth of radical parties and the entry of the extreme right in the lower house of the german parliament.
The feeling of guilt directly leads the SPD into a kind of oppositional cure. Thus, Germany's current European policy is called into question, or at least a certain German conception of European policy.
Let's step back in time and better appreciate the flow of recent history of European politics in Germany, before we talk about the near post-election future.
1. The recent history of European politics in Germany
Here are the facts of recent history. In 2004, the great expansion to Eastern Europe took place, in 2005 the constitutional treaty failed. This is also the year that Mrs Merkel wins the German elections for the first time.
In 2007/8, the sovereign debt crisis and the euro crisis broke out. In 2010/2011, assistance programs and financial rescues in Greece, Ireland and Portugal are signed, while we witness the accumulation of bad debts in the banking system. In 2012 the first asset purchase programs by the ECB begin, with a view to financing the banking system, and since 2010 we have applied the budgetary instruments of the austerity policy: stability pact, national reform program, budget treaty, European semester ( excessive deficit procedures).
The year 2004 is emblematic because “the policy of enlargement”, in addition to formally responding to a request for membership, represents a fundamental change in the cycle of the political process of European construction. With the policy of enlargement, the European ambition and project became more diffused and the available resources more scarce. At the same time, so many diffuse and contradictory interests called into question the effectiveness of the European institutions and objectively led to the Franco-German intergovernmental directory and, more explicitly, to a “Germanization of European business”.
With the 2007-2008 crisis, a systemic crisis of European capitalism, and the lack of “symmetrical adjustment” in European economic policy (surpluses in the north and deficits in the south), we can say that this “Germanization of European business” was accentuated under the auspices of a German doctrine of “virtuous austerity”. If the German position reveals any geopolitical ambiguity, its approach to European economic policy is much clearer. We can then ask: does Germany want the euro to control and discipline Europe and do business, at its leisure, with China and Russia, or does the euro for Europe to meet the challenge of globalization? In the end, are we facing the “Germanization” of Europe or the Europeanization of Germany?
There is, in fact, a complex of reasons that can help us to read “the new German question” and, consequently, the process of “Germanization” of Europe:
– First, the internal geopolitics of post-enlargement Europe favors a greater centrality of German positions within a new mitteleurope;
– Secondly, denuclearization and demilitarization favor Germany's civilist and cosmopolitan stances;
– Thirdly, the privileged relations it maintains with China and Russia (political opponents of the USA and the UK) favor its geostrategic position and also the relative autonomy of the German economy vis-à-vis the European economy due to the considerable flow of exports for those two countries;
– Fourthly, the euro is not, at its origin, a response to globalisation, but a political response to German unification; however, the euro has become a substitute for the deutsche mark and has served Germany to “tame” the worst behaved European partners (watch and punish);
– Fifthly, the single market and the single currency served, by the combination of their effects, to leverage the German economy more than any other, while the ban on the official devaluation of the euro made it impossible to carry out faster adjustments to the economies. most vulnerable Europeans;
– Sixthly, German economic thinking and an important part of the German elites coexist badly with the hegemony of the Anglo-Saxon economic model and prefers a multipolar system formed by three stabilized currencies: the dollar, the euro and the yuan; this system makes it possible to recycle Chinese, Russian and Arab surpluses for the European and German market;
– Seventhly, German banks hold a substantial part of the financial assets relating to the sovereign debt of Mediterranean European countries; thus, the design of financial assistance programs and conditionality rules are, in the first instance, a form of bailout to enable paying German creditor banks;
– Eighth, without foreign direct investment there is no European industrial policy worthy of the name; now, Germany is the best placed country to recycle a substantial part of the Chinese, Russian and Arab capital that seeks applications in the real European economy;
In summary, the design of European economic policy clearly bears the German mark, especially due to the restrictive way in which the financing needs of European policy are covered: in the dimension of the budget (1% of the budget ceiling on the Union's GNP), competences of the ECB (essentially relating to price stability and very critical in relation to its policy of purchasing financial assets), in the absence of mutualization of sovereign debt (absence of a European treasury), in the competences of banking supervision (more limited than extension) and in the extension of financial instruments for medium and long-term growth (the extension of eurobonds).
This complex of reasons tells us that there is, at the very least, “an implicit Germanization” of the Union's economic policy, which Germany uses not only to “domesticate” its misbehaving partners but, above all, to guide the Union's general policy. In addition, this “implicit Germanization” is objectively reinforced by the omnipresence of international financial markets as if, also here, there was an implicit alliance between the role of Germany and the role of international markets, since access to debt markets depends , in a direct line, of the reputation and credibility of the member states in matters of public finances.
II. German elections and European politics in the near future
There is a historical reference that is important to highlight and which concerns the parity of the Franco-German axis. We are all familiar with the historical resonance of the historical-national models of the Franco-German pair in the construction of European nationalities. It is not surprising, therefore, that these two references carry a special symbolism that it is almost mandatory to revisit at the precise moment when all historical experiences are pertinent, either to refine new organizational hypotheses or to dispel, once and for all, old ghosts from the past. Now, in this recurrent historical framework, the construction of Europe seems to have a paradoxical effect, namely, a deconstruction effect of the power status of France and the United Kingdom and, symmetrically, a reconstruction effect of German politics through the economy and the its powerful organized corporate interests.
It is never too much to emphasize the historical resonance of the Franco-German axis and the parity or imparity of their relationship at a given juncture, especially now that we have a clearly pro-European French President and a German chancellor who after Sunday's election “is obliged to to revise its European policy downwards.
In recent years, this parity on the Franco-German axis has been called into question. Therefore, and given the differentiated and differential integration that lies ahead, following several intra-European renegotiations, of Macron's proposals, but also due to last Sunday's elections, we will have to ask:
– In the XNUMXst century, Federal Germany is going to promote in Central Europe, within the framework of the European Union, a community of destiny, a mitteleurope, a sub-regional organization promoted and fostered by a special relationship, a ostpolitik, which, taking advantage of community funds and transactions, creates, in practice, a hinterland German in Middle Europe, or,
– Will Germany, closely following President Macron's proposals, deepen European political integration, whether in the eurozone, immigration policy or security and defense policy, or,
– Germany, following the last election, is going to adopt a “European policy of containment or minimum”, retreating to its national borders to follow more closely the positions of its future coalition partners, more conservative and reticent towards to German European policy as it has been followed so far?
In the coming months, German domestic policy will prevail over European policy and the formation of the German government over President Macron's reforms. The formation of a “Grand Coalition” between the CDU and the SPD is unlikely, as, as we said, the SPD will do a healing of opposition in the next four years. Most likely, therefore, the so-called “Jamaica Coalition” (in the colors of the Jamaican flag) formed by the CDU, the FDP (liberal) and the Greens. In the coming months, we will see to what extent the FDP will exchange its European reticence – Greece's exit from the eurozone, eventual elimination of the financial stabilization mechanism, opposition to the eurozone budget and transfers to the south – for a Minister of Finance European. We will also see to what extent the Greens will exchange their closed positions on emissions and electric vehicles for a last-minute gift.
This return to German domestic politics to contain the growth of radical parties may mean, at the European level, less attention given to the Franco-German relationship and, consequently, to Germany's involvement in the European political process of decision-making and institutional reform, thus contradicting President Macron's expectations regarding the refounding of Europe.
As I write this, on Tuesday 26 September, President Macron has just delivered a speech on “The Refounding of Europe” at the University of Paris, La Sorbonne. Here is a first summary of the proposed measures:
– A European Civil Protection Force with a view to major disasters,
– A European Asylum Agency and a European Border Police,
– A European Public Prosecutor's Office for terrorism and crime,
– A European Task Force and a European Training Academy,
– A European tax on financial transactions for the financing of development aid,
– A border carbon tax to promote the decarbonisation of international trade,
– An extended Erasmus Programme, this time to secondary education,
– Greater fiscal and social convergence and harmonization in terms of corporate tax and social contributions to avoid social dumping,
– Strengthening the eurozone, with its own budget, its own parliament and a European finance minister and new taxes on the digital economy and carbon emissions,
– A specific tax for the giants of the digital economy based on the volume of business carried out in each country,
– A reform of the CAP, with more and better food supply and security,
– A proposal on transnational lists of Members of the European Parliament as early as 2019, as well as a substantial reduction in Commissioners in the European Commission.
The simple statement of the measures is, in itself, “scary”, politically speaking, and we do not even refer to the drop in revenue due to Brexit and the implications that this list of measures has on the next period of multiannual programming of European funds . It is with this enormous specification that President Macron presents himself, two days after the German legislative elections and in the expectation of a government solution that is as favorable as possible. We will wait for the next developments and we will definitely come back to the subject.
Author António Covas is a full professor at the University of Algarve and a PhD in European Affairs from the Free University of Brussels
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