A Demandeur not a Hegemon

Germany seems destined to become the dominator of the new European Union, i.e. the reformed entity resulting from efforts to solidify European integration after the strong ripples of the financial and sovereign debt crises. As the biggest member state, the most important economy and, of course, as the key contributor to Eurozone rescue schemes, German influence appears to have grown to unprecedented scales. Particularly, it looks as if Berlin has gotten a unique opportunity to form European integration according to the German credos of Ordnungspolitik and a multi-layered, quasi federal political system— with financial engagement in the mutual assistance mechanisms of the Eurozone as the crucial lever to Europeanize German beliefs about fiscal solidity and compliance. However, German capabilities to “project” its power on the Union level are substantially restricted. Just like potential does not equal power and power does not equal influence, Germany’s position as the most relevant “donor” in the stabilization arrangements does not translate automatically into political supremacy. In this context, especially four factors play an important role.

First, the group of German allies is small, and moreover it seems to be disintegrating. Within the Eurozone, it is just a couple of member states like Finland, the Netherlands or Austria, which stand firm with the German “culture of stability” on public finances. French elections have no only blown away Merkozy, but have created a staunch protagonist of what has been called the Southern pro-growth camp. With many Central Europeans rediscovering their affinity to growth in the context of the talks on the new Multiannual Financial Framework (like Poland and the other “friends of cohesion” from the region) or due to domestic agendas (like Slovakia’s centre-left Robert Fico), even these countries cannot be taken for granted, even though they have been traditionally articulating their sympathies for German fiscal strictness.

Second, Germany has no real chance to deny assistance. This results from the strategic attitude of the German elites, for whom, as Piotr Buras writes, the future of the country and its economy is dependent on the rescue of the common currency. Of course, for the time being Germany has resisted the introduction of Eurobonds and has insisted on austerity, but in case of an existential danger of the Eurozone Germany simply has to act and, if necessary to pay or even to accept new measures, which it rejects so far. Alexis Tsipras, the leader of the radical left in Greece has put it bluntly, stating that Greek’s problems are also Germany’s problems, due to the exposure of German creditors. In other words: Germany is not able to threat help-seekers with non-support, it is rather the help-seekers, who can intimidate Germany.

Third, pushing for “German” solutions implies costs. Political costs on the one hand, since Berlin is seen as an egotistic actor, who is not ready to share the burdens of the crisis, in spite of being the biggest beneficiary of the Eurozone and European integration. Germany’s call for harsh budget discipline has already led to a tangible deterioration of its image in Greece, Spain and even France. On the other hand, the export of German solutions to Europe implies also financial costs. The great leap forward to a European “political union”, which bears German handwriting, would imply huge material contributions and risks (not only, but particularly) for German tax payers, like the mutualization of debt, an effective banking union or increased horizontal transfers of money.

Fourth, Germany has no supremacy in the debate about better economic governance. With the Hollande-effect and related power shifts on the political map of Europe, after the possible return of other social-democratic governments and due to decreasing public acceptance for spending cuts in most countries, proponents of an expensive big government approach seem to gain the “discursive hegemony” over Germany’s monistic austerity mantra.

All in all, the EU is not in a situation, where Germany is taking the reins and Berlin is unilaterally enforcing a European model of integration according to its own image. Germany is rather a big player, with numerous domestic restrictions (including a reluctant public opinion, a strong Constitutional Court and an increasingly active Bundestag) in need of support to get safeguards and partners for the future in an ever tighter Union of common liabilities and shared risks. Exaggerating somewhat, one might argue that Germany is more of a powerful demandeur rather than a dominating rule-setter.

What does this imply for Central Europe? Germany still has a predilection for an “all‑encompassing” Union without internal dividing lines. But the dynamics of change, the pressure to act and the Lisbon Treaty system have pivoted Berlin to a revival of German-French-cooperation and to a new modus operandi of European leadership, which has been called the Union method, i.e. an approach not by-passing the community institutions, giving more weight to bi- and multilateral coordination between (the strong) member states in EU-decision making. With most of the CEE countries staying outside the Eurozone, the intensification of economic coordination and the formal deepening of political integration bears the risk that at least part of Central Europe will end up on the fringes of the inside, which means in the Union, but outside its inner circle.

Therefore, one of the priorities of CEE activities vis-à-vis Germany is the quest for early involvement in discussions about the future of the EU. Whereas the reflection group about European integration set up by the German foreign minister has tried to do this (inviting the Polish foreign minister to participate), it will be the practical proposals launched on European Councils and by President van Rompuy that will be a real litmus-test, whether Central Europeans will get offers from Germany, which certainly will be an important initiator of such projects. If so, it will be interesting to see, at which stage, to which extent and to whom such offers will be directed. If not, German partners from CEE will have to deepen their relations with Berlin around particular policy areas, ranging from neighborhood policies, relations with Russia, to energy or the internal market. In a time of uncertainty, cooperative frameworks and common interests are the best antidote against fragmentation and marginalization.