Year LIX, 2017, Single Issue, Page 3

 

 

Germany’s Responsibilities Towards Europe

 

 

The political climate in Europe has changed in recent months, and this fact has not escaped the heads of state and government. Tusk’s remarks on inviting them to the European Council meeting of 22-23 June are striking in this regard: “It is fair to say that we will meet in a different political context from that of a few months ago, when the anti-EU forces were on the rise. The current developments on the continent seem to indicate that we are slowly turning the corner. In many of our countries, the political parties that have built their strength on anti-EU sentiments are beginning to diminish. We are witnessing the return of the EU rather as a solution, not a problem. Paradoxically, the tough challenges of recent months have made us more united than before.”

It is not so long ago — we need go back no further than the end of 2016 — that the crisis of the EU seemed insurmountable, and the rise of anti-European forces unstoppable; since then, however, things have evolved: there have been improvements on the economic front, and, even more significantly, Trump’s administration has made its first moves, and in so doing has given the Europeans a good idea of what it would mean having to deal, disparately, with this new America that puts itself first. The celebratory tone with which the supporters of national sovereignty in Europe hailed the victory of nationalism in the United States only highlighted their own smallness: their rejoicing in the face of the pledge by the world’s leading power to use its global superiority to take advantage of everyone else, including all its old allies, only serves as a stark reminder that a return to the nation-states in Europe would amount to collective suicide.

The first signs of a turning of the tide came from public opinion: first of all at the ballot box, with pro-European candidates starting to be favoured over populists, and subsequently through forms of collective mobilisation. Germany, for example, has seen the spread of Pulse of Europe, a pro-European movement that has grown exponentially from week to week and led dozens and dozens of thousands of people to turn out in the country’s squares, driven solely by a willingness to demonstrate publicly their support for the European Union. This has had a huge psychological impact on German politics and on public opinion in Europe. Elsewhere, the political support garnered by the European Federalist Movement (Movimento Federalista Europeo, MFE) and the Union of European Federalists for their March for Europe, organised to mark the 60th anniversary of the signing of the Treaties of Rome, was equally impressive and significant. The idea for the march was originally floated amidst considerable pessimism, generated mainly by the fear that the event would be overwhelmed by the nationalist and anti-EU demonstrations due to be held at the same time; in the end, however, over 10,000 people took part in what turned out to be a colourful and hugely successful march for Europe, whereas the “anti” factions managed to muster only two or three thousand between them. During the organisation of that event, the changing political mood became increasingly and tangibly apparent, as did the growing response of the more cognizant sections of society as they became aware of the need to rise to a challenge crucial to the very future of civilisation: that of defeating, with a design based on openness, unity, inclusion and peace, the muddled project of those who, thinking they can stop the course of history, seek only to exploit a selfish desire for closure and isolation.

This is the climate that allowed Macron’s crushing victory in France and in which, in Europe, there has been a resumption of efforts to make European integration move more rapidly in a political direction, in order to “strengthen the European Union with regard to the five dimensions of sovereignty”, as Macron put it. Macron sought, and obtained, a precise mandate to reform France and enable it to be, on a par with Germany, a pillar of the European edifice once again, and in so doing he made no secret of his awareness that this edifice still requires political completion. Although he indicated in his manifesto the areas in which there is a need for "new European sovereignty", he has not yet gone so far as to explain how this might be achieved, in other words, he has not yet set out the steps, institutional and otherwise, in the necessary process of creating real powers, political instruments and forms of democratic control by the European citizens. He knows that, to achieve all this, he will need to build an agreement with Germany and with the other partners, and that this is the real challenge of his mandate.

A window of opportunity has opened for Europe, and much of the responsibility for ensuring that it is not allowed to close without bearing real fruits falls to Germany. Failure to seize this opportunity would amount to a huge failure, because it is difficult to foresee, in the short term, another similarly propitious opportunity arising. Germany has no excuses this time: it is clear, not only from the mobilisation of its citizens but also from Alternative für Deutschland’s remarkable slump in the opinion polls, that pro-European sentiment is riding high in the country once again. In other words, the German government can no longer use the excuse that it needs to win over public opinion at home before it can embark seriously on the business of strengthening the European Union. Chancellor Merkel, prompted by the election of Trump in the USA, has already adopted a very clear stance on the need for Europeans “to take control of their own destiny and fight for their future”. In particular, Macron’s rise to power in France (providing the new president keeps his promises on internal reforms and on France’s new European vocation) should, after 25 years, finally quell German fears over France’s role in Europe, and thus effectively remove the obstacles that have always prevented the construction of a true political union. Last June happened to bring the death of Helmut Kohl, the great protagonist of German politics of the 1980s and 1990s. Kohl was the father not only of German reunification, but also of the monetary union — a man who fought to make the process of European integration irreversible, and who believed in the need to create a true political union in support of the single currency. When, in 1988, he accepted Mitterrand’s proposal to study the feasibility and means of creating a monetary union in Europe, he initially sought to address the issue together with that of a political union: in other words, to address, also, the need to put in place mechanisms of democratic control by the European Parliament. Even though his design was still not clear, it highlighted the need for a pooling of sovereignty, not just in the sense of transferring monetary policy management, but also in that of creating a European political power. However, France rejected this route, instead requesting the creation of an economic government. At this point, it was Germany that said no, because it feared that this solution would limit the autonomy of the European Central Bank and allow French statism to worm its way into the European system. Thus, the monetary union was conceived and born in the absence of any real instrument for governing it, other than the common rules that were introduced as a means of promoting convergence of the economies and systems of the area involved. Consequently, economic policies continued to be decided at national level and were left subject only to the control of external markets, in the belief that these would automatically punish divergent behaviours on the part of less virtuous states; no provision was made for reciprocal bailout mechanisms or for the possibility of structural solidarity between member states, or even for a European policy to promote development in the eurozone.

Following the defeat of its original design, Germany allowed the question to lie dormant for more than fifteen years, until the outbreak of the Greek crisis that, with the explosion of the sovereign debt crisis, spread to the entire euro area.

Germany's last attempt to submit an alternative design to that of the present unbalanced monetary union dates back to 1994 and the paper, Reflections on European Policy, written by Schäuble and Lamers and presented to the Bundestag on September 1 that year. In that report, the authors broached, among other issues, the need to launch EMU with a vanguard of five countries (the founders, excluding Italy). “Monetary union” they explained “is the hard core of political union (and not an additional integrative element, as is widely believed in Germany). If monetary union is to be implemented according to the expected timetable, then it will involve only a small group of countries to begin with — in accordance with the solution envisaged by the Maastricht Treaty. Even in this case, however, it will be realised only if the hard core of five member states applies itself systematically and determinedly to achieving it. To this end these states should establish, in the (i) monetary, (ii) fiscal and budgetary, and (iii) economic and social policy fields, a greater level of coordination, with a view to establishing a common policy, and thus — leaving aside the formal decisions to be reached in 1997 and 1999 — lay the foundations, within this time frame, of a monetary union within the group.” Despite the ambiguities and sometimes rather confused indications on how to reach “a common policy” in crucial areas, so as to build a monetary union that would also be economic and political, the position of the CDU under Kohl at that time was absolutely clear: the aim should be to introduce, in the shortest time possible, political union. At that historical juncture, the Germans saw political union as essential in order to prevent the effects of the country’s unification and of Europe’s inevitable (and desirable) enlargement eastwards, as well as the impact of the profound changes that had taken place in international relations, from weakening the drive for Europe (starting in Germany itself) and encouraging a return to nationalism across the continent. The creation of the single currency, which, to function properly, also needed to combine political union with economic and fiscal union, was seen to offer an ideal opportunity to move in this direction — an opportunity that some countries might already be ready to seize, given the convergence of their economic systems. The idea was that this pioneering group of countries, which would have to include France (given that nothing European can be built without involving the French), could thus set the ball rolling. In this way, France would be induced to embark on a process of structural reform, while the group as a whole would serve as a force of attraction and a guide for the other states, whose journey towards convergence with the model of fiscal responsibility and economic competitiveness introduced with the adoption of the single currency was still expected to be long. In short, the implementation of a two-speed system for creating the economic and monetary union would square the circle, achieving unity among the countries whose political and economic systems were already more aligned (and thus building a union that was not only irreversible, but also very solid and stable), but at the same time putting strong positive pressure on non-EMU states to converge towards the model of economic virtue.

But this plan was never adopted, and its failure and the resulting launch of EMU with 12 countries, including Italy burdened by a huge public debt, had the effect of driving Germany — and all the other partners — towards the very renationalisation of the EU that the Schäuble-Lamers paper had warned against. Even when the urgent need to complete monetary union with political union became, once again, a key issue in European debate following the outbreak of the financial and economic crisis, it still seemed clear that Germany’s reluctance to proceed towards a goal that was, in many ways, desirable was fuelled by a lack of confidence in some of the southern eurozone countries, France included. The reality is that Europe, following the crisis, has forced all the states, in turn, to pursue a model of greater financial sustainability and reform, in order to make the national systems more competitive. But this has not been enough to rapidly transform weak, and in many ways backward, countries into perfectly adequate partners. These countries, starting with Greece and Italy, need to be politically incorporated into a more robust, federal system that has the political means to guide and sustain their internal renewal process, especially at its most critical junctures, through joint development policies and support tools. Shunning the prospect of political union effectively turns the situation of the eurozone countries into a vicious cycle in which it is impossible to preserve the positive results that are, at times, achieved. The case of Italy is perhaps the most difficult, and thus the clearest illustration of the current difficulties, partly because of the size of the country and the weight it carries. Public opinion in Italy, having initially supported the process of reform that the Italian system so desperately needs, is now once again rejecting the steps that need to be taken, and the country is getting sucked into a spiral of political instability whose outcomes are difficult to predict. For those who live in Italy, the priority now is to get the country to really think about where its true interest lies, and to boost political interest in and support for efforts to change the national system in ways that will allow Italy to become a credible partner and interlocutor at European level. Europe’s task, on the other hand, is to find a way of averting the risk of a domino effect stemming from Italy, where a resounding victory and renewed support for populism, currently on the back foot, is possible. The current European regime, which seeks to intensify the system of rules and constraints in order to encourage convergence of economic policies (still entirely national), has been exposed as completely inadequate. As Draghi continues to point out, convergence is a problem whose rational management depends on a transition from a system of European rules to one of European institutions actually capable of governing, in the full awareness that the changes and reforms that each country must succeed in implementing (thereby providing evidence of a changing climate internally) will yield their fruit only in the medium to long term. In short, support for convergence must be managed and coordinated at European level, above all through the promotion of common growth.

Now that France seems willing to align itself with the model of economic virtue that is the conditio sine qua non for Berlin, the challenge, primarily for Germany, is to agree to form a political union even with countries in which it has very little confidence, abandoning the method based purely on intergovernmental rules and decision-making mechanisms in order to lay the foundations for transforming the current system of governance of the euro area into a system based on federal institutions, mechanisms and instruments. The fear that this will split the EU and isolate important partners, like Poland, is unfounded. The “force of attraction” effect, envisaged by Schäuble and Lamers in ‘94, would today be far stronger than it would have been then. With the United Kingdom out of the picture, the political weight exerted by the part of the EU that lies outside the euro area is very weak, which implies that the power of attraction of the monetary union will become increasingly irresistible.

If the eurozone succeeds in forming a strong and cohesive core, united politically on a federal basis and capable of building, around this shared sovereignty, a foreign and security policy worthy of a great and peaceful power, then the other states will soon find it easy to agree on how and when they should join it themselves. All that is needed is the courage to press ahead. It will first be necessary to identify the procedure that it would be wisest, in a political sense, to use for reforming the Treaties (knowing that it has now become indispensable to work transparently, through public debate and the involvement of the institutions, both European and national) and to have clearly in mind the concept of an EU structured to be compatible with the co-existence of, on the one hand, a politically united eurozone and group of so-called pre-ins, and on the other, a group of countries that are not yet ready for this sharing of sovereignty. This process of reform must not duplicate institutions or create new ones, but rather develop the ones that already exist, and it must also ensure that, in safeguarding the single EU framework, the single market is safeguarded as well.

Making this transition will not be easy, but it is the only possible course of action. This effort is the least Europe deserves if it is true — as indeed it is — that, to quote Macron, “Europe is the only place in the world where individual freedoms, the spirit of democracy and social justice are so closely wedded”. It is the duty of everyone to fight to ensure that a politically united Europe succeeds in realising this model on the world stage, and those with a political role, in particular, should consider it a personal responsibility.

The Federalist

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