>> POLICY BRIEF ISSN: 1989-2667

Nº 115 -FEBRUARY 2012

Is still a EU-ropean power?

Susanne Gratius

All eyes have been on Germany’s role in the euro crisis. Judge - >> ments differ on the degree of solidarity and leadership that it has shown in this crisis; serious criticisms are certainly merited of its stub - born insistence on harsh fiscal stringency. Few question the fact that on HIGHLIGHTS economic matters it is now the undisputedly dominant player. Howev - er, a question of equal significance is the fact that Germany’s new eco - nomic power has not translated into leadership of Europe’s common • Berlin has no political foreign policy interests but rather into an instrumental focus on narrow, roadmap for the future of national geo-economic interests. Europe. Being the world’s fourth largest economic power and the second largest in terms of exports has not led to any greater effort to correct Germany’s low • In times of crisis many in profile in foreign policy. Absent a discernible German foreign policy, eco - Germany perceive the EU not nomic interests are now the dominant paradigm in the country’s external as a political model but as an relations. The political weight of foreign minister Guido Westerwelle and economic problem. of his liberal party is shrinking. If elections were held today, polls suggest that the German Liberal Party (FDP) would gain less than 2 per cent of • German foreign policy will the vote. Although Chancellor has reluctantly assumed a have to strike a new balance pivotal role in the Euro-crisis, the German abstention on and the between economic interests, lack of a clear voice on other global issues expose an uncertain internation - normative principles and al profile. This is as potentially damaging to the European Union (EU) as national power aspirations. Germany’s fixation with deficit reduction in internal economic policy.

ABANDONING TRADITION

The Chancellor’s disordered management of the economic crisis shows that Berlin has no political roadmap for the future of Europe. A EU-ROPEAN POWER? A EU-ROPEAN POWER?

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>>>>>> Austerity has been Berlin’s only response to the normative commitment to multilateralism crisis. Apart from already existing funds, no within and outside Europe. To avoid new commitment on growth and jobs has been hegemonic suspicions, Germany has always adopted. Germany’s export model might prove punched below its weight as a regional power in that growth without an expansion in Europe and framed its initiatives within the consumption is possible; but this is not a Franco-German framework. precept that can necessarily be applied to other countries. This is no longer a given. Although relations with France remain very close, power has clearly Chancellor Merkel’s push for fiscal austerity is shifted towards Berlin. Dissociated from its seriously damaging Germany’s image. The cost historic burden, a new self-confident Germany of her short-sightedness is high: the unravelling has emerged. It now pushes more assertively for of European integration, a creeping north-south its own economic preferences (to avoid inflation divide between member states and the loss of and maintain a weak euro to benefit exports) global influence on trade liberalisation, against those of its Southern European development and climate change. neighbours (more interested in stimulating demand and advocating Eurobonds). Public In times of crisis many in Germany perceive and political debates reveal an increasing the EU not as a political model but as an reluctance to pay the price of solidarity in order economic problem. They believe that their to address Euro-area asymmetries. The result is country is a global power and feel that the EU a risk of polarisation between a group of stable might be too small a framework for the world’s economies (Austria, Germany, Finland and the fourth largest trading power. This appears to Netherlands) and deficit countries. There is a herald a substantial shift from Germany’s perception that a less European Germany is traditional international role. For historic seeking to bring about a German Europe. reasons and because of its size, Germany has played a middle-power role in Europe for over Following years of sustained economic growth, 50 years. The Euro-Atlantic axis has been at the German nationalism is stirring. A scenario of heart of its foreign policy, predicated on close Germany ‘retrenching by neglect’ from bilateral relations with the United States, European integration cannot be ruled out. France, Poland and Israel. Europe has been the Apparently, more than 60 years of European bulwark against a return to German natio- integration has failed to create a common nalism and geopolitical expansion. identity strong enough to meet the test of the current crisis. A new political elite less As a result of the two world wars, Germany’s committed to the European project has come to role both in its neighbourhood and in the world the fore. The historic north-south divide is has been based on the unwritten pact that its back, replacing the originally German concepts self-image and identity could not be separated of Solidargemeinschaft and the ‘transfer Union’. from the European project and the transatlantic Two thirds of German citizens were against the community. Domestic and European interests rescue-package(s) for , as were Merkel’s have been treated as two sides of the same coin. Liberal and Social Christian coalition partners. In the case of a conflict between the two (such Many Germans have pushed for Greece to be as in 1999, when two thirds of German citizens excluded from the Eurozone; others have rejected the euro), the European commitment proposed a division between a Northern and counted for more than public opinion for the Southern euro, and even Germany’s own exit. post-war generation of politicians. European EU energy commissioner Günther Öttinger values like solidarity, development, democracy suggested flying the flags of the Euro-sunders at and human rights underlined Germany’s half-mast. POLICY BRIEF - Nº 115 - FEBRUARY 2012

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Domestic and electoral concerns today prevail DECLINING GLOBAL INFLUENCE over European and foreign policy goals. Nega - AND PRESTIGE tive public opinion polls and opposition from her own camp reduced the Chancellor’s room The picture is not much brighter on the inter - for manoeuvre. The demand for austerity in national stage. Germany is the third largest con - Greece, Ireland, Italy, Portugal and Spain, has tributor to the UN budget, but its political seriously damaged Germany’s soft power. influence and visibility do not match its finan - According to public opinion polls, Germany is cial commitment. The German decision to the most disliked country in Greece, while in abstain on the UN Security Council (UNSC) Italy Mario Monti has warned of mounting vote on military intervention in Libya was not resentment, and the Spanish media has remorse - only a mistake, attracting much criticism at lessly criticised Merkel. home and abroad without any tangible benefits. It has also provided further evidence of the It is unlikely that the ‘Merkozy’ Fiscal Pact absence of clear foreign policy goals and a creep - approved on 30 January 2012 will repair the ing unilateralism. damage. First, fiscal discipline will not reduce the risk of recession and growing unemployment in Apart from damaging Germany’s credibility as a the deficit states. Second, the UK and the Czech promoter of democracy and human rights, the Republic will not be part of the deal, whose Libya case cemented Berlin’s low profile and implementation will France’s leading role in the Arab Spring. A fur - prove legally contro - ther example of Germany’s uncomfortable posi - Absent a versial. Third, there tion in the Middle East conflict was its vote is a problem of cred - against recognition of an independent Palestin - discernible German ibility; the Fiscal ian state at the UN debate in September 2011. Pact foresees the In addition, the German aspiration to become a foreign policy, same kind of rules permanent member of the UN Security Council economic interests that were first violat - also rubs uneasily against EU unity. ed by France and are now the Germany them - Although it has joined the European consensus selves. on the recent oil-embargo on Iran, Berlin’s posi - dominant paradigm tion has long fallen in-between the tough in the country’s According to former approach advocated by France, the UK and the Chancellor Helmut US, on the one hand, and the Chinese and external relations Schmidt, Merkel has Russian position, on the other hand. Its role in isolated Germany in Syria has also been cautious and somewhat Europe. The crisis ambivalent. Relations with Washington are at a will necessarily have an impact on Germany itself, low point, and Berlin’s international commit - as more than 70 per cent of the country’s exports ments are measured by their electoral costs. go to Europe. Furthermore, this pur suit of eco - Even ex-Chancellor has criticised nomic self-interest and the resulting weakening the ‘disoriented’ foreign policy of his former of political cohesion within the EU also under - protégé, Angela Merkel. mine Germany’s international prestige as a nor - mative civil power. The Merkel coalition seems There is a mismatch between Germany’s aim to to have moved away from the basic principles of become a permanent member of the UNSC and Germany’s foreign policy – Europe and the its declining political influence on the global transatlantic community – replacing them by a stage. Its record during its one year membership bilateral commercial diplomacy focused on new of the UNSC (2011-2012) was sobering. The global powers. UN reform agenda is stuck and multilateral >>>>>> A EU-ROPEAN POWER? A EU-ROPEAN POWER?

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>>>>>> negotiations on climate change – where Berlin primary source of imports and could soon has played a leading role – are going nowhere. become its second export market. German exports still concentrate on Europe (first) and the Germany is looking for new strategic partner - United States (second), with China ranked sixth ships, particularly with China and Russia but also after Italy. But Russia (13th), Brazil (19th) and with Brazil, India and South Africa through the India (21st) are all fast growing markets that are dialogue forum GIBSA. According to Wester - beginning to feature more prominently in Ger - welle, Germany, as a global trading power, has to many’s trade flows. be part of the emerging new world architecture led by successful countries in Asia, Latin America and Africa. In February 2012, the German for - MORE OR LESS EUROPE? eign ministry published a new policy document on relations with non-traditional powers, includ - Germany’s recent economic boom is based on ing the BRICS as well as a more novel focus on structural adjustments made under the former the likes of Mexico, Colombia, Indonesia and government and an export model – concentrated Vietnam. The paper confirms the transition on the automobile sector that represents 20 per towards a policy beyond Europe, formally still cent of GDP – whose success depends in part on based on values but with a clear prioritisation of the depreciation of the euro and on growth rates economic, security and energy interests abroad. in the largest export markets. High intraregional trade flows show how closely linked the German This is the latest step in a trend that began at the economy is to the EU. Thus, German foreign end of the 1990s under the government of Ger - policy cannot (yet) be separated from Europe. hard Schröder (1998-2005), who’s pragmatic The highly likely recession in the Euro-zone will approach to foreign policy focused on exports and also damage the German economy. Despite a energy security. Today, Russia is a close partner of growth rate of 3 per cent in 2011, growth fell to Germany and China its fastest growing export 0.25 per cent in the last three months of the year. market. In 2007, the Merkel government It will be much more difficult to achieve a viable launched the first Central Asia Strategy clearly economic governance of the Euro-area if Ger - oriented towards energy security. Despite human many enters a recession. rights violations, in February 2012, Germany signed a partnership agreement on energy, indus - Economic interests and foreign policy are now rep - try and technology with Kazakhstan. And during resented by Guido Westerwelle and the minister the Chancellor’s visit to China at the beginning of for economy, Philipp Rösler, both from the liber - February 2012, meetings with dissidents were al FDP. The geo-economic logic is beginning to sacrificed to new economic agreements. Demo - replace the traditional European and transatlantic cratic values are increasingly subordinated to focus as the guiding principle of Germany’s exter - trade and energy interests. nal relations. Apart from new energy partnerships, ‘civilian power’ Germany is now the number three Trade increasingly leads foreign policy. In 2010, exporter of weapons and military equipment of the exports represented 45.9 per cent of GDP. Twen - world. The main buyers are European countries ty years ago, it was just 25 per cent. These figures and the United States, but also Saudi Arabia, demonstrate that Germany has heavily increased Turkey, Brazil and South Africa. its external dependency. Priorities have begun to change too. With a share of 16 per cent of Ger - Nonetheless, the increasing ‘economisation’ of many’s trade, Asia has already overtaken the Germany’s foreign policy might have occurred Americas (10 per cent). Bilateral commercial more by accident than through a conscious strat - diplomacy beyond traditional partners concen - egy, as large German companies have filled the trates on China and Russia. China is Germany’s vacuum left by a weak foreign minister. In a POLICY BRIEF - Nº 115 - FEBRUARY 2012

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recent interview, Guido Westerwelle denied any BRICS is a better option. Under pressure from a undue economisation of foreign policy but iden - powerful private sector that is pushing for new tified German companies as part of the country’s markets, German foreign policy may become less external diplomacy and the country’s global pro - value oriented and more closely pursue economic jection as an economic powerhouse. According to interests in emerging markets. However, such analyst Hans Kundnani, the big companies have interests cannot substitute for foreign policy, and exerted an increasingly notable influence on Ger - the heterogeneous BRICS group is not a realistic man foreign policy. foreign policy alternative to the EU.

In the end, these are not exclusive but comple - OPTIONS FOR THE FUTURE mentary options. For political, historic and eco - nomic reasons, Germany will probably stay firmly Germany has three options for redefining its place committed to European integration. But its size in Europe and on the global stage: to return to and position as a global trading power also traditional foreign policy principles and alliances require it to look beyond Europe and to establish despite this running counter to public opinion; to closer relations with emerging powers. Thus, Ger - go it alone and create ad-hoc alliances with as man foreign policy will have to strike a new bal - wide a range of partners as possible; or to get clos - ance between economic interests, normative er to the BRICS as a well-worked strategic option. principles and national power aspirations. The Libya case proves that Germany has to make a choice. More imperative than new strategic concepts with emerging powers would be a long-term, political - Dismissing speculation on German hegemonic ly driven road map for Europe. Following aspirations in his pro-European speech on 20 Jan - Merkel’s prediction that the end of the euro uary in Washington, the foreign minister made would be the end of the EU, Germany should use clear that ‘more Europe not less Europe has to be its economic might for a less nationally-oriented the answer to the current crisis.’ Nonetheless, leadership in the EU. To prescribe fiscal austerity Westerwelle’s and Merkel’s rhetorical commit - by law might contribute to improving the govern - ments to ‘more Europe’ need to deliver beyond ment’s image at home, but will undermine sup - ad-hoc, ineffective crisis management. The Ger - port for German leadership abroad. Germany’s man government also needs to invest much more traditional role as a medium power relying on political capital in addressing public concerns and normative appeal and multilateral commitment is making the case for Europe. They have started to suffering even as the country asserts more eco - do that abroad but less so at home. nomic power over its European partners.

Going it alone is not a credible alternative. Since Germany’s economic stability is the result of the Susanne Gratius is a senior researcher single European market, economic interests can - at FRIDE. not justify such a move. Besides, apart from export capacities, Germany is far from being a global power: demographic figures show a con - stant decline, its military capacities have been reduced and its soft power is limited to the eco - nomic success story. Germany has neither the will nor the strength to go it alone.

Given Germany’s economic and energy interests e-mail: [email protected] in Russia, China and Brazil, getting closer to the www.fride.org