WHAT WILL BE THE OUTCOME OF THE GERMAN ELECTIONS FOR EUROPE?

What follows is an Extract from a document published by the European Council on Foreign Relations titled " The German Election: What Europe expects and what Germany will not do.

"Europeans expect a lot from Germany. They want it to accept transfers of resources – and, if necessary, of power  required to sustain the long-term viability of the European integration project. Pro- and anti-integrationists alike fear Germany’s growing power. Germany’s election is no longer primarily a national affair: depending on the outcome, residents in other member states of the European Union and especially in the eurozone might feel the economic, social, and political impact of the result even more keenly than German voters themselves.

Many leading politicians in other EU member states share one overriding expectation. They want Germany, the largest and most powerful economy in the EU, to accept responsibilities of political leadership commensurate with its economic heft. They want Berlin to put its money where its mouth is and accept in deed as well as in word the necessity for deeper European integration. They want the new German government that emerges from the election to propose some long term perspective for Europe’s future.

It is in many ways a surprising catalogue of demands. Fulfilling it could easily put much of the design of the new Europe largely into German hands. Yet European politicians seem fed up with Germany’s reluctance to assume an adequate leadership role and with a German approach to European crisis management that seems capable only of tackling the most immediate emergencies. They want a vision for Europe that goes beyond Chancellor Angela Merkel’s “step-bystep” approach and a single-minded insistence on austerity policy.

However, the Germany that many in Europe hope for is not on offer. It is hard to imagine any new government coalition – or the old one, if it is returned to power – providing enlightened leadership of a kind that accepts significant short-term sacrifice to buy into a far more uncertain vision of long-term political stability. Germany lives in a different world, with its own constraints and worries, many of which are largely overlooked by the outside world. Fears of impoverishment fuelled by a faltering demography co-exist with a new national momentum that has emerged since the fall of the Berlin Wall in 1989. There is a gap between European expectations of a more forceful and constructive German role and the German capacity to meet these expectations.

The biggest risk, therefore, is of European post-election disillusion because Germany’s approach to Europe is unlikely to change. Berlin quite simply lacks the political ambition to provide clear leadership in turbulent times. Rather, it hopes to influence events by force of example, getting others to transpose the German model of thriftiness at home and competitiveness abroad into their own financial, economic, and political cultures. This, most Germans believe, is the only way for Europe to succeed in an increasingly competitive and globalised world.

Once the dust from the election campaign has settled and Germany has a new government, many European leaders would like to see Germany move beyond its often infuriatingly piecemeal approach to the eurozone crisis in favour of a politically and institutionally coherent project that can serve as a benchmark and perhaps even as a goalpost in the further debate. In particular, they want substantial German movement on three specific fronts: building a solid banking union; a growth strategy; and a greater commitment to European foreign policy. But once the new government is formed it is unlikely to try to meet these expectations. The divergences between Germany and its partners run much deeper than disagreements on political and economic tactics or the scope or sequencing of reform. They are fundamentally the reflection of conflicting readings of European and national reality.

What, then, would a serious German draft for a European to-do list look like? The first thing to understand is the fundamental importance Germany attaches to constitutional legality, both in terms of EU treaties and its own Basic Law, and to full parliamentary legitimacy – even at the cost of creating suboptimal conditions for the economic recovery and political cohesion of the eurozone and the EU.

Whether on banking union or European-wide spending programmes, political function, far from dictating legal form, must follow it. A single resolution mechanism, no matter how urgent or desirable, therefore requires some form of treaty “amendment”. Full banking union needs an openly acknowledged and constitutionally sound renouncement of sovereignty. The real question is whether other key partners such as France are ready to swallow these terms. At the same time, Germany has now come to accept and indeed embrace the French argument that a big overhaul of the European institutional system, complete with a convention and ratification in all 28 member states, is a train wreck waiting to happen. Thus full-blown treaty change under Article 487 of the European treaties looks and is simply impossible under current political conditions. If the grand entrance to EU institutional reform is closed, the back door is all that is left. Seen from Berlin, the EU is heading for a “silent revolution” of its institutional system centred on the eurozone, with the ESM as a nexus for further integration and the European Commission a more marginal player. The result of this approach is likely to be an increase in overall differentiation between the EU and the eurozone. Of course, everybody will be invited to join this newly designed Euroland-Europe – the idea is to be “inclusive”. But everyone knows that some countries such as Sweden and the UK will want to stay out and that others such as Bulgaria, Hungary, and Romania will have a hard time coming in any time soon.

Conditions for joining the post-crisis euro and participating in the new contractual agreements to stabilise it will be more exacting than at the time since the Maastricht Treaty in 1992 or the accession treaties in 2004 – not least because they will have to contribute to the ESM.

What makes all of this German thinking about the EU’s and the eurozone’s future so difficult to gauge is the inherent tension between the country’s continued insistence on a strictly legalistic approach to EU reform and its pragmatic acceptance that major treaty reform is impossible in the foreseeable future. This paradox has been central to Berlin’s recent European policy and will remain so after the elections.

Grasping its full implications is the only way to understand the policy choices Berlin has made of late and is likely to make in the post-electoral future – whatever the shape of its new government. Inasmuch as there is a debate about full and formal institutional change in Europe, its focus has shifted away from the old dichotomy between federalism and intergovernmentalism. The new bone of contention is between “executivism” (based on France’s political tradition of executive-based discretionary approaches) versus “parliamentarism” (based on the German parliamentarian culture of accountability and rule-based decision-making).

There is much talk in Berlin of building a “transnational” Europe based on networks of national authorities. The European Parliament and national parliaments would jointly control a redesigned eurozone executive of which the nucleus would be formed by the ESM, a eurozone treasury, and a finance minister – the embryo of a future European government. There is also discussion about how to organise European democracy. A core idea, reflected in the Westerwelle report on the Future of Europe, is to create a clearer distinction between legislative and executive power.

However, there is another less benign reading of the current German debate. Critics suspect that the focus on “transnational” ways forward – bypassing supranational mechanisms for the governance of the eurozone – is a hidden strategy either to transfer competences back to the national level or to keep them from shifting there in the first place. Indeed, many leading voices in Germany, including Mrs. Merkel herself, have welcomed the British government’s European reform agenda. On the left of the political spectrum, some prominent political economists have recently argued that the social costs of the eurozone are too high, especially for its southern member states, and that a return to national currencies might be a better option.

The fact remains that all these discussions amount to far less than an attempt to work out a coherent economic and political concept for the eurozone and the EU. Indeed, even many ardent German advocates of further European integration argue that now is not the right time for putting forward an encompassing vision.

For many in Europe, a clear vision would give their citizens a perspective to explain where the current economic pain is leading. But many Germans would see a grand plan as a ploy to push the country into a full-blown “transfer union” designed to sustain more than a dozen tottering economies with German treasure. Even though German citizens are still, despite the crisis, essentially pro-European, they are increasingly defensive or distant. As it basks in praise for its economic prowess, even from some in Italy such as the philosopher Angelo Bolaffi, Germany might be said to be too pleased with itself to devote itself to Europe.

Conclusion

Germany cannot now put forward a coherent vision for Europe’s future and comply with the strategic demands of its partners. If it were to assume a more dynamic leadership role, some of the same partners might see Germany as overbearing in a different way. The task for the next decade will be, above all, to work on developing a common understanding of the key issue: where the others talk about politics, Germany talks about law; where France and the UK talk about strategy, Germany talks about business. This is why the European debate that is taking place in Germany is so often misunderstood or overlooked abroad: it does not fit into the classical strategic patterns. Germany and the rest of Europe are operating on different frequencies. Germany may be central to European politics but it sees itself as a leading role model rather than as a power with an obligation to lead. The German intelligentsia remains amazingly agnostic about the need to do more for Europe and speed up the process of integration. Germany is listening carefully enough to Europe’s demands, but only does the minimum to ensure they do not upset the nation’s equanimity.

Whatever the outcome of the elections, they are unlikely to usher in a change. Rather, the decisive time for the EU will be after the European elections in 2014, when new leaders take over and the UK holds a referendum on its membership of the EU. This is when the European deck of cards might be dealt anew – with Germany neither the only player nor the main one. It does no harm to remember this fact at a time when German politics is being watched in Europe with much trepidation – in fact too much, given the years that lie ahead."