Germany and Central Europe: Drifting Apart? GERMANY AND CENTRAL EUROPE: DRIFTING APART? Editor András Hettyey Dialóg Campus Budapest, 2020 The work was created in commission of the National University of Public Service under the priority project PACSDOP-2.1.2-CCHOP-15-2016-00001 entitled “Public Service Development Establishing Good Governance”. Authors András Hettyey (Chapter 1; 9; 10) Christopher Walsch (Chapter 2) Jana Urbanovská (Chapter 7) Jelena Volić-Hellbusch (Chapter 5) Marko Lovec (Chapter 3) Marko Savković (Chapter 5) Rafał Ulatowski (Chapter 6) Sandro Knezović (Chapter 4) Vladimír Müller (Chapter 8) Zdeněk Kříž (Chapter 7) © The Authors, 2020 © The Editor, 2020 © The Publisher, 2020 All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law. Contents Chapter 1 | Introduction – Germany and the Central and Eastern European Countries Revisited 9 Bibliography 13 Chapter 2 | Austria and Germany: Silent Partners in a Differentiating European Union 17 1. Historical Overview 17 2. Research Questions and Hypotheses 19 3. Foreign Policy Paradigms of Austria and Germany 19 4. Institutional Relations: Six European Cleavages and their Austro– German Dimension 21 5. Bilateral Political Relations since 1989 23 6. Economic Relations since 1989 28 7. Conclusions and Outlook: Are Germany and Austria Diverging? 31 Bibliography 32 Chapter 3 | Slovenia’s Relationship with Germany: Danke Deutschland 35 1. Introduction 35 2. Bilateral Political Relations: Danke Deutschland 36 2.1. Establishment of bilateral relations 36 2.2. Open issues 36 2.3. EU accession 37 2.4. EU crises 38 3. Economic Relations: Buying Cars, Selling Parts 39 3.1. Transition into market economy 39 3.2. Fixing of exchange rates 39 3.3. The economic and financial crises of 2009–2014 40 3.4. Recent numbers and trends 41 4. Institutional Relations: A Good European but Where is Europe? 43 4.1. Euro-Atlantic integration 43 4.2. Alternative partnerships 44 4.3. Fast changing external environment 45 5. Specific Issues: Macron before Macron 46 5.1. The Eurozone crisis 46 5.2. The migrant and refugee crisis 47 6. Conclusions and Outlook 48 Bibliography 49 6 Germany and Central Europe: Drifting Apart? Chapter 4 | Germany and Central Europe Drifting Apart? The Case of Croatia 53 1. Introduction 53 2. Bilateral Political Relations since 1989 54 3. Economic Relations since 1989 57 4. Institutional Relations since 1989 59 5. Policy-field Specific Relations 61 6. Conclusions 63 Bibliography 64 Chapter 5 | From Confrontation to Unequal Partnership: Germany and its Policy towards Serbia 67 1. Introduction 67 2. Formative Events in the Relationship of the Two Countries 68 3. Dominant Perceptions of Germany and Its Policies 71 4. Policy Mechanisms and Initiatives Utilised by Germany 73 5. The “Kosovo Issue” as the Main Bone of Contention in Foreign Policy 75 6. Conclusion: An Estimate of Policy Legitimacy, Coherence and Continuity 77 Bibliography 78 Chapter 6 | Polish–German Relations between 1989–2016: Bandwagoning and Its Limits 81 1. Towards ‘New’ Polish–German Relations 82 2. Political Relations between Germany and Poland 83 3. Economic Relations between Germany and Poland 85 4. Relations with Russia and Energy Security 90 5. Conclusions 91 Bibliography 92 Chapter 7 | Germany and the Czech Republic: An Asymmetric Relationship in Search of a Strategy 97 1. Introduction: Czech–German Relations between Conflict and Cooperation 97 2. Bilateral Political Relations since 1989 98 2.1. From 1989 to 1992: Hope for a new quality of mutual relations 98 2.2. From 1992 to 1997: In the name of the legacy of the past 99 2.3. From 1997 to 2004: Heading towards NATO and the EU 100 2.4. From 2004 until the present: In need of a strategy 101 3. Economic Relations since 1989 103 4. Institutional Relations since 1989 104 4.1. Czech–German relations and the EU: Key factors shaping the framework 104 4.2. Czech–German relations and NATO: Gradual convergence of Czech and German strategic thinking 106 4.3. Czech–German relations and the Visegrád Four: In the role of the most bearable of all trouble-makers 107 5. Czech–German Defence Cooperation as a Case of Policy Field-specific Relations: Towards a Strategic and Natural Partnership 109 6. Conclusions and Outlook: Are Germany and the Czech Republic Drifting Apart? 110 Bibliography 112 Contents 7 Chapter 8 | Germany and Central Europe: Drifting Apart? The Case of Slovakia 115 1. Introduction 115 2. Bilateral Political Relations since 1989 115 3. Economic Relations since 1989 118 4. Institutional Relations since 1989 121 5. Policy Field-specific Relations 123 6. Conclusion 125 Bibliography 125 Chapter 9 | From a Community of Feelings to Estrangement: Hungary and Germany since 1990 129 1. Bilateral Political Relations since 1990 129 2. Economic Relations since 1990 136 3. Institutional Relations since 1990 136 4. Conclusion 139 Bibliography 141 Chapter 10 | Germany and the CEE Countries: Ties that Bind 145 Conclusions 152 Bibliography 155 Authors 157 [This page intentionally left blank] Chapter 1 Introduction – Germany and the Central and Eastern European Countries Revisited András Hettyey The present volume’s aim is to give an overview on the political and economic relations between Germany and Central Eastern Europe (CEE). Our study volume was inspired by a similar undertaking of the Friedrich-Ebert-Stiftung and the Latvian Institute of International Affairs in 2011–2012, to which the editor of the present volume was a contributor. Back then, eight country chapters were dedicated to analyse the relationship between Germany and the Baltic and Visegrád countries, along with an introduction by Kai-Olaf Lang (Stiftung Wissenschaft und Politik). Edited by Andris Spruds, the study volume Friendship in the Making: Transforming Relations between Germany and the Baltic–Visegrad Countries was published in Riga in 2012, giving valuable insights to scholars, diplomats and the public at large interested in the foreign policies of Germany and the countries of the region. Much has changed since 2012, when the aforementioned study volume was published. From Brexit to Trump, from the migration crisis to the war in Ukraine, from Nord Stream 2 to the re-invigorated EU enlargement policy, the strategic environment changed significantly. Also, in light of the past couple of years, it seems as though the goals and interests of the CEE countries and Germany would increasingly diverge. The handling of the migration crisis and the mandatory resettlement quota, the sanctions regime against Russia, differing views on energy policy – these are just a few topics where Germany and (some) CEE countries pursue different interests and, therefore, policy goals. Therefore, an interesting paradox arises. After decades of separation before 1990, Germany and most CEE states are now finally common members of institutions such as the EU, NATO and OSCE, working together in various fields. Other CEE countries also feel the “gravitational pull” of these institutions. Yet rather than converging in their foreign policy goals, Germany and the CEE countries seem to be drifting apart. It was with this in mind, that the idea for the present volume took shape. Some researchers have predicted just such a development. “Without the goal of accession as a disciplining factor, relations between Germany and the Visegrád countries should continue to loosen after enlargement” wrote Vladimir Handl as early as 2003 (Baun 2005, 381). This school of thought sees the eastern enlargement of 2004 as an end of an era. To put it simply, before the CEE countries joined the European Union, Germany had huge leverage over their foreign policy through the conditionality of the enlargement process. Since 2004, however, the ‘cost of non-compliance’ with Germany has significantly 10 Germany and Central Europe: Drifting Apart? decreased and diverging interests and opinions have increasingly come to the fore. In terms of the well-known structure–agency problem, this argumentation is much closer to the ‘structure’ end-point than to the ‘agency’ end-point, meaning, that the role of personalities like Orbán, Kaczynski and Merkel seems to be only secondary in explaining the widening rift between Germany and the CEE states: the German–CEE relationship would have been more confrontational after 2004 regardless of the politicians in power and, crucially, will continue to be in the future. Yet, as we will see in the forthcoming chapters, not all countries have seen a drifting apart in their relationships with Germany. Some, such as Slovenia or Slovakia, still enjoy relatively problem-free relations with Germany, while the same cannot be said of Hungary or Poland. In short, there is considerable variation between the examined countries – although theoretically all can afford to oppose Berlin in some issue areas or others. How can we account for this development? Are the personalities of the various Prime Ministers and Foreign Ministers the crucial variable? Put differently: Is agency the key in the relationship of Germany and the CEE countries? If so, we should expect significant changes in the relationships between Germany and the states of the region whenever elections put different, new parties in power in