THE TURNING-POINT IN GERMAN POLICY TOWARDS EUROPE
Even before the introduction of the euro, decided upon in Maastricht, experts were already discussing the dysfunctional structure of the currency union. The politicians involved were also aware that a common currency, which removed the option of devaluing their national currency from economically weak member countries, was bound to increase existing imbalances within the currency union, so long as the political competences at the European level for providing counter-balancing measures were absent. The eurozone can only achieve stability by harmonising fiscal and budgetary policies—ultimately only by adopting a common fiscal, economic and social policy. So the currency union was created by its protagonists in the ready expectation that it could be extended, in a series of stages, into a full-scale political union.
The absence of further reforms along these lines led during the financial and banking crisis which erupted in 2007 to the measures we know, some of them adopted outside prevailing EU legislation—and to the corresponding conflicts between so-called donor and creditor countries in Europe’s north and south. Germany, as an exporting nation, dug its heels in during this crisis and, mobilising against any debt mutualisation, rejected any further steps towards integration; it continued to do so when Macron pressed on from 2017 with far-reaching plans for strengthening the union by taking the necessary steps to pool sovereignty. So its finance minister and architect of the austerity policies imposed by Germany on the European Council can simply be accused of shedding crocodile tears when he now looks back and laments: ‘Today, above all, one needs the courage we did not possess in the 2010 crisis to bring about greater integration within the eurozone. We cannot let the opportunity slip again but must use the current disruption to expand the currency union, via the European Recovery Fund, into a genuine economic union.’
What Wolfgang Schäuble means by what he calls ‘disruption’ is the drastic economic consequences of the pandemic. But why are Schäuble and Merkel calling for the courage they supposedly lacked ten years ago? Is it solely the economically based fear of a definitive collapse of the European project, which so changes the goalposts that this is enough on its own to explain this unexpected change of course? Or is it the dangers long since inherent in the new geo-political context which are putting the democratic way of life and cultural identity of Europeans to the test?
In a word: what lies behind the sudden, almost backdoor acceptance of debt mutualisation which had been demonised over the years? Even with all the chutzpah of this volte-face, Schäuble can at least look back on his own pro-European past in the 90s. But, given that we’re talking about a deeply pragmatic politician like Merkel, always focused on the short-term and constantly driven by what opinion polls say, such a radical and abrupt change of course is still puzzling. Before she decided to give up the role of leader of the Brussels ‘frugals’ it was not just the polls that had to agree. No, as in previous cases, a shift in the domestic balance of political forces served to alter the relevant, determining factors.
What was striking was the absence of what would normally be reflex criticism within her party of Merkel’s climbdown. Here, she decided as it were overnight to work seamlessly with Macron and agree to a historic compromise which opens the door, however narrowly, to an EU future that had been closed till then. But where was the riposte from the powerful posse of Eurosceptic naysayers within her own ranks—from the normally outspoken economic wing of the Christian Democratic Union, the important business associations, the economic commentators of the leading media?
What has recently changed in German politics—and Merkel has always had a nose for this—is the fact that for the first time in the history of the federal republic a successful party to the right of the CDU and its Christian Social Union partner has set up its tent, one that combines anti-Europe criticism with an unprecedentedly radical, no longer stealthy but naked ethnocentric nationalism. Until then the CDU leadership had always ensured that German economic nationalism could be dressed up within pro-European language. But, with this shift in the political balance of forces, a potential wave of protest which had been blocked for years within the German unification process immediately found its voice.