Small wars journal toward a gentler, kinder german reich- - 2011-11-29


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Small wars journal toward a gentler, kinder german reich- - 2011-11-29

  1. 1. Toward a Gentler, Kinder German Reich? The Realpolitik behind the European Financial CrisisBy Tony CornJournal Article | Nov 29 2011 - 9:32amWith each passing day, European Integration – the longest running political soap opera – is increasinglyresembling the infamous “don’t mention the war” episode of Fawlty Towers. In a recent op-ed entitled“Germany has declared war on the eurozone,” the editor-at-large of the respected London Times mincedno words about Germany’s grand strategy in the past two years:“If Clausewitz is right that “war is the continuation of policy by other means”, then Germany is again atwar with Europe, at least in the sense that German policy is trying to achieve in Europe the characteristicobjectives of war: the redrawing of international boundaries and the subjugation of foreign peoples….Angela Merkel, the German Chancellor, has consistently claimed that Germany will “do whatever ittakes” to save the euro. But what she has actually done is consistently to refuse to take any of thenecessary action. She has also prevented European institutions from taking such actions, even when theGerman veto had no legal or moral justification.”Not to be outdone, The Economist that same week castigated Angela Merkel’s “pigheaded brinkmanship”and argued that she “cannot continue to threaten feckless economies with exclusion from the euro in onebreath and reassure markets by promising the euro’s salvation with the next. Unless she chooses soon,Germany’s chancellor will find that the choice has been made for her.” [1] What’s the fuss really about?In the past two years, German elites have taken up the Rahm Emanuel doctrine (“never let a serious crisisgo to waste”) all the more eagerly that Washington, in the process of rebalancing away from the GreaterMiddle East to the Asia-Pacific region, is less interested than ever in following intra-EU affairs.For the third time in less than twenty years, Germany is trying to force down the throat of Europe a federal“political union” which, in the eyes of too many European observers, eerily resembles a gentler, kinderAnschluss. While Europeans were able to push back against the first two attempts, the two-year longfinancial crisis has created within Europe a “German unipolar moment” and provided the kind of leveragethat had eluded Germany earlier. With the German Chancellor as a de facto “EU Chancellor,” Germanelites are leveraging the crisis by playing a game of chicken in order to make their federal vision prevail.Demographically and economically, Germany is one third larger than either Britain or France. In the pastten years, this predominance has already been reflected in EU institutions, both quantitatively (Germanyhas the largest representation in the EU parliament) and qualitatively (the European Central Bank is aclone of the Bundesbank). But that’s apparently not good enough for Berlin, who has deliberately let thecrisis move from the periphery (Greece and Portugal) to the center (Italy and France) in order to extractthe maximum of concessions from the rest of Europe.
  2. 2. Germany’s ideal, if unstated, goal? A constitutionalization of the EU treaties, which would irreversiblyinstitutionalize the current “correlation of forces,” and allow German hegemony in the 27-memberEuropean Union to approximate Prussian hegemony in the 27-member Bismarckian Reich. German eliteshave become so fixated on this goal that they are now talking about changing the German constitutionitself in the event the German Constitutional Court decides to get in the way of the New European Order.From a socio-political standpoint, to be sure, this would-be Merkelian Reich would have none of thenegative features associated with the autocratic Bismarckian Reich. In all likelihood, the new Reichwould be a benign, metrosexual, post-modern (pick your favorite) polity, one that would not be any less“democratic” than the technocratic European Union of today. And from a monetary-fiscal standpoint, onecould argue that a Merkelian Reich would probably represent a significant improvement over existing“hybrid” arrangements. From a geopolitical standpoint, though, a German-dominated EuropeanFederation is something that America would come to regret very quickly.Take EU-Russia relations. In a not-too-subtle way, German pundits are today hinting that Germany wouldbe better disposed economically toward Europe if Europe, in turn, was better disposed politically towardGermany’s Russia policy - more specifically toward the Meseberg process initiated (without priorconsultation with the EU or NATO) by Angela Merkel in May 2010. The problem is, once you read thefine print, you discover that the Meseberg Memorandum calls for an EU-Russia Committee which wouldhave greater powers than the NATO-Russia Council, would give Russia access to the EU decision-makingprocess and, ultimately, would make NATO altogether irrelevant.Or take EU-China relations. Since Germany is responsible for 47 percent of EU exports to China, Germanpundits are now arguing, the rest of Europe should give Germany the lead in the formulation of the EU’sChina policy. The problem is, for all the rhetoric about Berlin having long forsaken military power andbecome a “civilian power” (Zivilmacht), Germany in the past decade has overtaken Britain and France asEurope’s main arms exporter. Since the Berlin Republic now defines itself almost exclusively as a “geo-economic power,” there is no doubt that the first priority of a German-dominated EU China policy wouldbe to lift the arms embargo in place since 1989. American taxpayers would thus continue to provide forthe defense of the “civilianized” Germans (who spend only 1.3 percent of their GDP on defense) whileGermany would be making money selling advanced military technology to America’s peer competitor.Like it or not, today’s Germany is not your father’s Germany. The transformation of the Bonn Republicinto a Berlin Republic in 1999 happened to coincide with a reversal in the “correlation of forces” betweenGermany and France. To the extent that the German-French tandem remains today the engine ofEuropean integration, Germany is now squarely in the rider’s saddle, while France - to use a Bismarckianmetaphor - has to content itself with the role of the horse. This newly-found freedom of maneuverexplains why, in the past two years, the Berlin Republic has been oscillating between Wanderlust andWeltpolitik, and why German Zivilmacht is increasingly perceived in Europe as the continuation ofRealpolitik by other means.[2]As veteran analyst Bruce Stokes, one of the most respected U.S. watchers of transatlantic relations,declared in his recent testimony to the U.S. Senate: “The euro crisis is no longer simply an economicproblem. It is increasingly a foreign and security policy challenge for the United States. And this crisis hasthe potential to undermine the transatlantic alliance, something the Soviets never accomplished during theCold War.”[3] In short, “it’s not the economy, stupid” – it’s all about Realpolitik, and Washington wouldbe well inspired to step in.The Specter of Friedrich List
  3. 3. German academics and politicians alike never tire of reminding foreigners that post-1945 Germany hasforsaken military power and is best conceived of as a “civilian power” (Zivilmacht). And they’re right. Infact, they could safely argue that, from the standpoint of the longue duree, the specificity of Germanstrategic culture is better illustrated by the economic might of the Hanseatic League of merchants and theFugger dynasty of financiers than by the military might of the Teutonic Knights and of the Hohenzollerndynasty.It’s easy to forget that, in the two hundred years since the end of Napoleonic Europe, Germany has been a“military power” for only fourteen years, and has behaved as a “civilian power” the rest of the time.From 1818 to 1864, it is not through military force, but through an ever-widening and ever-deepeningcustoms union (Zollverein) that Prussia managed to incrementally dislodge Austria from the leadership ofthe German Confederation. It is only after Austria’s refusal to integrate the Zollverein on Prussian termsthat Prussia itself abandoned civilian means for the “blood and iron” approach. Having achieved Germanunity under Prussian leadership and Prussian terms through three short wars (1864-1870), Bismarckquickly reverted to Zivilmacht.From 1871 to 1914, it is through civilian means again (mainly, the 1879 alliance with Austria-Hungary)that the newly-created German empire proceeded to create in central Europe a greater informal empireknown as Mitteleuropa. Even during the Great War, Germany’s main war aim was essentially to create aEurope-wide Customs Union (with a few annexations here and there). From 1919 to 1939 again, it ismostly through “civilian” means that German renewed its quest for an informal empire throughoutEurope. And from 1940 to 1945, the uncomfortable truth is that Nazi Germany created a “CentralEuropean Economic Community” which, in many ways, anticipated the “European EconomicCommunity” created by the Treaty of Rome (1957).After WWII, Germany first used European integration as a way to regain a “political virginity” of sorts onthe international scene. Then, in 1969, with the establishment of a full-fledged EEC customs union (andDe Gaulle’s departure from the scene), Germany began, through civilian means, an active Ostpolitik thatpaved the way for German reunification twenty years later. In 1990, during a famous meeting betweenKohl and Gorbachev at Stavropol (quickly dubbed “Stavrappallo”), Germany actually bought itsreunification from Russia. From 1990 until today, Germany has gone out of its way to eschew militaryaction, while quietly recreating its economic empire in Mitteleuropa. In short, during the past two hundredyears, Zivilimacht has been the norm, Wehrmacht the exception. [4]But it is also a fact that the German conception of “civilian power” is not synonymous with the Americanconcept of “soft power,” with which it is too often confused in Washington. While the latter excludeseconomic power and follows a logic of attraction, the former has economic power at its core, and followsa logic of cooperation when it can, and a logic of coercion when it must. To put it simply: in the history ofmodern German strategic culture, Carl von Clausewitz has indeed been the exception rather than thenorm, but the norm itself has not been Immanuel Kant so much as Friedrich List.The intellectual father of what has been variously called “economic nationalism,” “mercantile realism” or“geo-economics,” List’s influence on Moltke and Bismarck was decisive for the creation of both theGerman Reich and Mitteleuropa. More importantly, Friedrich List has better claims to be the intellectualfounding father of the European Union than a Jean Monnet.[5] Whereas the Frenchman provided thegrand tactics (the Monnet Method), the German offered the grand strategy.In modern times, the heir to Friedrich List is Mitteleuropa-born, American geo-strategist EdwardLuttwak. In a seminal 1990 article, Luttwak declared that, in the post-Cold War era, geo-economicswould take precedence over geopolitics.[6] The thesis enjoyed a certain audience in America until 9/11,
  4. 4. after which U.S. elites became fixated on the Islamist threat and, in the process, lost sight of what bothChina and Germany were doing.In the summer of 2011, German analyst Hans Kundnani published a seminal article on “Germany as a geo-economic power” in The Washington Quarterly. [7] The gist of it?Twenty years ago, at the time of German reunification, the prevailing German conception of “civilianpower” was the one put forward by Hans W. Maull, for whom “the overriding foreign-policy objective ofa civilian power is not simply to improve economic performance or prosperity but to civilize internationalrelations through the development of the international rule of law. In other words, a civilian power aims tomake international politics like domestic politics.” In short, Zivilmacht at the time had a strong “Kantian”streak.[8] But in the past ten years, Kundnani argues, this particular conception has eroded in Germany.First, German civilian power has become less multilateral. Second, the economic dimension has come tothe forefront at the expense of the legalistic-normative dimension. Third, cooperation is giving way tocoercion:“Germany is not only increasingly defining its national interest in economic terms, but also increasinglyusing its economic power to impose its own preferences on others in the context of a perceived zero—sumcompetition within the eurozone, rather than to promote greater cooperation in a perceived win—winsituation. Given these shifts, it has become harder to claim that Germany still ‘‘civilizes’’ internationalrelations in the way Maull suggested. The concept of civilian power is still valid as a normative concept;however, it no longer adequately describes Germany as a foreign-policy actor….The concept of geo-economics now seems particularly helpful as a way of describing the foreign policy ofGermany, which has become more willing to impose its economic preferences on others within theEuropean Union in the context of a discourse of zero—sum competition between the fiscally responsibleand the fiscally irresponsible. For example, instead of accepting a moderate increase in inflation, whichcould harm the global competitiveness of its exports, Germany has insisted on austerity throughout theeurozone, even though this undermines the ability of states on the periphery to grow and threatens theoverall cohesion of the European Union.”In short, Kindnai argues, Germany’s Zivilmacht today is more synonymous with what Luttwak, in 1990,called “geo-economics” than with what Maulls, in 1990 as well, called “civilian power”:“The nature of a geo-economic power is determined by the relationship between the state and business…Sometimes states ‘‘guide’’ large companies for their own geo-economic purposes and other timescompanies seek to manipulate politicians or bureaucracies. The relationship between the German state andbusiness would seem to be an example of what Luttwak calls ‘‘reciprocal manipulation.’’ Germancompanies lobby the German government to make policy that promotes their interests; they in turn helppoliticians maximize growth and in particular employment levels the key measure of success in Germanpolitics…Because much of this [German] growth has come from exports to economies such as China and Russia,where the state dominates business, [German] exporters are also conversely dependent on the Germangovernment. Meanwhile, German policy toward authoritarian states… such as China, has tended to focuson trade at the expense of human rights, democracy, and the rule of law.”Kundnani warns that, as a result of the redefinition of Germany’s self-image, the United States couldcome into conflict with Germany in two ways:“First, it could have disagreements about economic policy, as in last year’s standoff between the two
  5. 5. countries at the G-20 on issues such as stimulus spending and domestic demand. Secondly, it couldstruggle to persuade Germany to play an active role commensurate with its size and economic power onglobal security issues and on crisis management. Germany could be simply unwilling to provideresources, as in Afghanistan, or it could actively undermine initiatives led or supported by the UnitedStates, as in Libya. In this case, much will depend on Germany’s role in the UN Security Council, where ithas campaigned for a permanent seat since the Schroeder government.”That said, Kundani argues, despite striking parallels between Germany and China, there is in fact adifference in kind between the two countries. China aspires to Great Power status, Germany is happy withbeing a Greater Switzerland:“Of course, Germany is not the only geo-economically active state in the world. Other states, such asChina, also use geo-economic power. Indeed, there are striking parallels between China and Germany:both are manufacturer/exporters that have huge surpluses of saving over investment and have recentlytended to impose deflationary pressures on their trading partners (the United States for China, theeurozone for Germany). China, however, ultimately aspires to be a great power. Although it currentlyrelies primarily on economic power in its rise, it is also committed to the use of military power… In thatsense, Chinese foreign policy can be seen as a kind of neo-mercantilism. Germany, on the other hand, isunique in its combination of economic assertiveness and military abstinence. In a sense, therefore, it maybe the purest example of a geo-economic power in the world today.” (emphasis added).Interestingly, Kundnani’s article fails to make any reference to Friedrich List and/or the geo-economictradition in German strategic culture. Instead, the author hints that, if Germany is today becoming a bitlike China, it is because this is the only way for Germany to hold its own vis-a-vis China (which is notfalse, incidentally, but is only half the story).True, Kundnani is writing for an American audience and, though the influence of List’s National Systemof Political Economy (1841) has been felt throughout the world from pre-revolutionary Russia to post-WWII Japan and today’s China, America remains the only country where List has yet to become ahousehold name among educated elites.[9] Then again, the absence of any reference to List could also bedue to the fact that, for List himself, there was no such thing a “pure geo-economics.” The foreign policyof a geo-economic power has unavoidably a geopolitical dimension.Is Chinese “neo-mercantilism” bad and German “geo-economics” good? Is there really a difference inkind between revisionist China and revisionist Germany, or just a difference in degree? Will Germanyalways aspire to be nothing more than a Greater Switzerland? Is Europe destined to forever remain aPerhapsburg Empire, or doomed to become a Fourth Reich? [10]The “EU Chancellor”One thing is sure: in 2011, for the third time since the reunification of 1989, Germany is trying to forcedown the throat of Europe a federal political union which, for too many Europeans, eerily resembles agentler, kinder Anschluss.The first attempt at a federal Europe was put forward in 1994 by Christian Democrat heavyweightWolfgang Schauble, then heir-apparent to Chancellor Helmut Kohl. Needless to say, the French were notamused at the prospect of the former Grande Nation becoming some sort of maritime Bavaria in a Euro-German Reich, and successfully managed to push back.The second attempt began in 1999, around the time of the launching of the Euro and the constitutionalconvention, with Social-Democrat Chancellor Gerhard Schroeder and Green Foreign Minister Joshka
  6. 6. Fischer pushing for a “maximalist” federal Europe along the lines of the German constitution. Since theconstitutional convention which opened in 2001 happened to be chaired by a former French president, theend result in 2004 fell short of German goals and, at any rate, this EU constitution was rejected in 2005 bythe French and the Dutch in a referendum.The third attempt today is once again the work of Wolfgang Schauble. Since Schauble had to resign asleader of the CDU in 2000 in the wake of a financial scandal, Angela Merkel took over the CDU and waselected Chancellor in 2005. But in October 2009, as the global economic crisis was already under way,Merkel appointed Schauble as Finance Minister (arguably the most strategically important ministry in thisparticular context) and, by March 2010, Schauble was once again campaigning for federal integration.In October 2010, in a landmark speech delivered at the College of Europe in Bruges, Angela Merkelcreated a stir by putting forward the idea of a “union method,” quickly dubbed the Merkel Method. Untilthen, the method favored by European Federalists of all countries had been the Monnet Method (alsoknown as the “community method”), i.e. a supranational means for supranational ends.For the cognoscenti, the Merkel Method represented a revolution of sorts in that it signaled that GermanFederalists today were determined to drop the community method in favor of more muscular method (inessence, an intergovernmental means for supranational ends). Since the unelected Eurocracy itself hadlong favored the Monnet Method, it was not long before EU Commission President Jose Manuel Barroso,the Pope of the Eurocracy, declared himself against a method that would allow “a few idiots” in onecountry to “blackmail” the EU. And indeed, what in Eurospeak is now called the “union method” isknown in the real world by a more traditional name: coercive diplomacy.[11]In January 2011, the journal Internationale Politik, the mouthpiece of the German foreign policyestablishment, published a much discussed article entitled “The EU Chancellor” by Andreas Rinke.[12]The gist of it?After the entry into force of the hard-fought Lisbon Treaty in December 2009, no one in Europe expectedfurther integration for years to come. Then came the Greek crisis, which created within the EU a German“unipolar moment” and turned Germany into an accidental hyper-puissance of sorts. By the time of theEU Summit in December 2010, German Chancellor Angela Merkel had been granted “a kind of ‘agendasetting authority’ within the circle of 27 state and government leaders.” Not only had the GermanChancellor become a de facto EU Chancellor, but she had “transferred her governing style from thenational to the European stage.”As Rinke puts it, French President Nicolas Sarkozy had to content himself with le second role of EU vice-chancellor. EU Council President Herman Von Rompuy, for his part, had been relegated to the level of aChancellery chief of staff. As for the remaining heads of state and government, they constituted hardlymore than a Bundesrat (Germany’s upper chamber). The article concluded: it is time to think of the EU asa German-style “government” rather than a “club” of 27 members.While Rinke’s article went unnoticed in Washington, it created quite a stir in European capitals for threereasons:First, the idea that the Greek Crisis was the “decisive event” that turned Germany into a hyper power doesnot hold scrutiny. For one thing, financially speaking, Greece is simply too insignificant for any Greekcrisis to have a regional effect (unless, that is, Germany goes out of its way to refuse to solve it). Foranother, the Greeks did not become suddenly “irresponsible.” Forget the morality play, peddled by someGerman commentators, that today’s crisis pits hard-working Northerners against hard-partyingSoutherners. It’s not exactly a secret that, having invented “Democracy” way back when, the Greeks have
  7. 7. been resting for the better part of the past 2,500 years. The Greeks were not workaholics in the 1990swhen Germany agreed to let them in the European Monetary Union, nor have they suddenly turned “lazy”in the past two years. The truth is actually closer to home.In 1990, West German politicians estimated that the final price tag for rebuilding East Germany would beno higher than 600 billion dollars. Twenty years and 2,4 trillion dollars later, the “West Germans” feel thatthey have spent more than enough already on their East German “Greeks” (with little to show for), andthey are in no mood to bail out foreigners. In addition, between 2003 and 2008, German bankers havemanaged to lose massive sums of money in foolish investments in American financial products, and theyare now pressing the “EU chancellor” to get the rest of Europe to make up for their losses before Germanpublic opinion notices how badly they screwed up.[13]Last but not least, beginning in 2003, Germany itself was the first EU country to violate the German-inspired Growth and Stability Pact (GSP). On substance, it was in fact a wise decision; but, as economistDaniel Drezner pointed out, this violation “sent the signal to the smaller countries that fiscal profligacywould go unpunished. Germany’s enthusiastic lending to the periphery only exacerbated the problem.”[14]In a nutshell: Club Med countries may have been liberally using German credit lines, but they werefollowing Germany’s example and, as Drezner points out, they were buying German goods: “Between2000 and 2007, Greeces annual trade deficit with Germany grew from 3 billion euro to 5.5 billion, Italysdoubled, from 9.6 billion to 19.6 billion, Spains almost tripled, from 11 billion to 27.2 billion, andPortugals quadrupled, from 1 billion to 4.2 billion.”The irony is that, though initially designed to “contain” Germany, the euro has mostly benefitedGermany. As defense analyst Julian Lindley-French puts it bluntly: “Quite simply, the Euro has offset thehigh cost of German production and created a customs union (Zollverein) for German exports, which wasGermany’s 1914 war aim. So, the EU has done for Germany what two disastrous wars could not, cementGermany as the natural leader of Europe … Having gained more from the Euro than any other EUmember-state, the German people are not at all interested in paying to rescue it.”[15]Second, the idea that Germany’s quasi-imperial status today is “accidental,” i.e. that it is not an empire bycoercion but a sort of “empire by invitation” not unlike like the American empire in post-WWII Europe, isa fairy tale.[16] For the past two years, Berlin has deliberately used all kind of excuses to refuse to takethe necessary measures to resolve the crisis, and deliberately let the crisis spread from the periphery(Greece and Portugal) to the center of Europe (Italy and France). As London Times economiccommentator Anatole Kaletsky summed it up in the op-ed mentioned earlier:“As the euro crisis has intensified and spread from clearly bankrupt countries such as Greece to Spain,Italy and now France, it has been acknowledged, at least outside Germany, that three actions areabsolutely essential to resolve the crisis and to put the European economy back on its feet. The first wouldbe to restore financial stability by huge purchases of government bonds by the European Central Bank. Tobe successful, these would have to be on a scale at least comparable with the “quantitative easing”undertaken in the past two years by the US Federal Reserve, the Bank of England, the Bank of Japan andthe Swiss National Bank. The second step would be to restore long-term solvency by issuing new bonds,jointly guaranteed by the entire eurozone, which would replace some of the government debt run up incountries such as Greece and Portugal. The third step would be to improve and co-ordinate economicpolicy in all eurozone nations to restore economic growth, ensure that the restructured debts can beserviced and that another crisis does not occur. By blocking the first two, Germany has guaranteed thefailure of the third.Why then has Ms Merkel so blatantly contradicted her own stated policy?
  8. 8. The initial judgment was that she did not understand economics, or was too beholden to longstandingmonetary traditions, or was simply incompetent. But as the crisis has intensified, Ms Merkel has becomeever more stubborn in her refusal to do what is obviously needed to save the euro, as David Camerondiscovered last week. So a different interpretation of her behaviour must now be considered. Is it possiblethat, far from trying to save the euro, Germany actually wants to break it up? A clear historical precedentis the sabotage of the European exchange-rate mechanism (ERM) in 1992. And the institution that nowseems to be working to destroy the euro is the same one that organized the ERM break-up: theBundesbank.”Third and last point, the most remarkable part of Rinke’s article-manifesto is what was actually leftunsaid: namely that, to the extent that his description of EU governance process in a time of emergency isindeed an accurate one, it strongly resembles the functioning of the Bismarckian Reich (1871-1918) inordinary times.Though nominally a league of equals (like the EU today), the 27 member German Reich was in factdominated by Prussia. The Prussian prime-minister doubled as Reich chancellor and Bundesrat chairman(like Merkel today), and Prussia’s control of one-third of the Bundesrat votes gave it a veto right (likeGermany and its Mitteleuropa allies today). Below Prussia came three kingdoms of lesser importance(Bavaria, Saxony, Wurtemberg) - like France, Britain and Italy today; then a bunch of principalities,duchies, free cities, - like the smaller EU states today. Elections to the Bundestag were through universalsuffrage (like the EU parliament today) and, as a federal union, the Bismarckian Reich was actual ratherflexible, since the main members were allowed to retain control of their armed forces (like in the EUtoday).By the standards of the time, the Kaiserreich was overall a “modern” institution. In his treatise on TheState (1889), none other than Princeton political scientist Woodrow Wilson was full of praise for theGerman Reich, which he put on a par with America and Britain. For Wilson, the one country that seemedto follow a Sonderweg was not the German Reich, but the dysfunctional French Republic.[17] UnderBismarck (1871-1890), the Kaiserreich was actual a status quo power (like the EU today). It is only afterBismarck’s departure that Wilhelmine Germany became a revisionist power, and it is only around 1917that Woodrow Wilson started to talk in terms of “Prussian autocracy.”Be that as it may, in the collective memory of the West today, the Bismackian Reich remains (ratherunfairly) associated with “Prussian militarism,” and German commentators today know better than todraw attention to the similarities between the two situations. Hence the current rhetoric about the need tocreate a “United States of Europe” – a narrative in which Germany, France and Britain are compared toCalifornia, Texas, and New York State rather than to Prussia, Bavaria and Saxony. But the truth remains:while Prussian preponderance in the German Reich of 1871 was somewhat greater than Germanpreponderance in the European Union today, the difference is one of degree, not of kind.Demographically as well as economically, Germany today is one third larger than either France or Britain.In the various EU institutions, Germany’s preponderance since 2000 has been reflected both quantitatively(Germany has the largest representation in the EU parliament and is the main beneficiary of the “doublemajority system” in the EU Council) and qualitatively (the European Central Bank is a clone of theBundesbank and its “one size fits all” policy benefits mostly Germany). All the measures taken in the pasttwo years, from the European Financial Stability Facility (EFSF) and the European Stability Mechanism(ESM) to the European Semester and the Euro Plus Pact, have one thing in common: they have givenGermany greater weight in the EU decision-making process.Since October 2011, the EU is becoming a two-speed Europe: on the one hand, the 17-member eurozone
  9. 9. are creating parallel structures; on the other hand, the 10 members remaining outside the eurozone(including Britain, the second largest contributor to the EU budget), who are fast becoming second-classcitizens.[18] What will it be, ultimately: a 27-member Reich, or a smaller, 17-member Reich? The funnything is that even this question is eerily reminiscent of the 19th century debate over Grossdeutschland vs.Kleindeutschland.As of this writing (November 2011), there are two things that are not negotiable for Germany. On the onehand, the status of the European Central Bank must not be amended (except for - increased representationfor Germany on the Board). One the other hand, the EU treaties must be amended. The power play is a bittoo transparent.[19]How determined are German elites to push their federal agenda? So determined that they are alreadytalking about changing the 1949 German constitution itself if need be in order to accomplish this goal. Atthe time of reunification in 1989, the Basic Law was considered one of the two symbols of national pride(along with the Deutschmark), and a change of constitution was barely considered. What a differencetwenty years make! Today, even though the Basic Law has served Germany well in the past 60 years, thegrowing perception is that it was imposed by the Allies in 1949, it was not ratified by a referendum at thetime, and it now stands in the way of Germany’s reassertion on the international stage (and it is indeed afact that - by design - the executive power of the German Chancellor is not nearly as strong as that of theFrench President or the British Prime-Minister).Officially, of course, the rationale for changing the 1949 Basic Law is that, in 2009, the GermanConstitutional Court, while approving the Lisbon Treaty, imposed limits on the further transfer ofsovereignty to Brussels in several policy areas ranging from security to fiscal and social policy.According to Der Spiegel, Merkel and Schauble have a two step plan for the reform of the EuropeanUnion. As a first step (which could be concluded by the end of 2012), a change in the EU treaties thatwould put “notorious debtors” among the 17 eurozone members under mandatory supervision byBrussels. As a second step, Merkel and Schäuble want the European Union to move towards becoming afederation, preferably at 27 but, if not possible, as a two-speed Europe in which a 17-member federal corewould constitute an avant-garde:“This entails transferring more sovereign rights to the EU -- and it would mean amending Germanysconstitution. This could either be accomplished under Article 23, requiring a two-thirds majority inGermanys federal parliament, the Bundestag, as well as the Bundesrat, the upper legislative chamber thatrepresents the states. A more challenging alternative would be to change Article 146 of the constitutionvia the direct participation of the population. According to this scenario, the Germans would drop theBasic Law and embrace a totally new constitution.”[20]According to Spiegel again, “constitutional experts have devised a solution that is already being fleshedout in detail at government ministries in Berlin.”[21] So here we are: as a first step, Germany would focuson getting more weight in a federalized core Europe at 17; as a second step, Germany would change itsown constitution and so as to give greater power to the German chancellor. The net result? A strongerGerman Chancellor who, by the same token, would become a stronger “EU Chancellor.” [22]Listening to the German public conversation with the proverbial Freudian “third ear,” it is hard to avoiddrawing the conclusion that German elites have become slightly unhinged. On the one hand, they arestubbornly refusing to turn the European Central Bank into a U.S.-style Federal Reserve, even though it isurgently needed (and even though they claim to pursue a “United States of Europe.”) On the other hand,they are willing to change a Basic Law that has served them well in order to implement a project that isneither objectively needed, nor subjectively desired by the rest of Europe or, for that matter, by German
  10. 10. public opinion itself (as of 2009, only 25 percent of Germans were in favor of a federal Europe).As Daily Telegraph columnist Ambrose Evans-Pritchard puts it: “Having followed the German politicalscene closely for the last five months, it is clear to me that almost the entire German politicalestablishment is out of its depth, ideological, sometimes smug, apt to view the EMU debt-crisis as aCalvinist morality tale, and lacking in deep understanding of what it has got itself into.”[23]The more Angela Merkel repeats her “more Europe, not less Europe” mantra, the more Europeans arereminded of Bismarck’s famous mot: “I have always found the word "Europe" in the mouths of thosepoliticians who wanted from other powers something they did not dare to demand in their own name.” Infact, one gets the sense that, in the German collective psyche, the full “normalization” of Germany willnot be achieved until the post-WWII constitutional order is overturned, the semi-sovereign Bonn Republicled finally to rest, and that this imperative takes precedence over any other considerations. As one shrewdobserver puts it:“It may be unfair that Germans are now forced to spend their hard-earned money on helping out Italy andGreece. But that just doesnt make it rational for Germany to let the European economy go up in flames.The inability of Merkel and her colleagues to realize this basic point demonstrates how confused Germanforeign-policymakers now are about Germanys past and present interests… German politicians of thepostwar era were masters at pursuing Germanys self-interest even as they talked about noble ideals.German politicians today have naively taken their predecessors rhetoric at face value. Disgusted by asubmissiveness that never actually existed, they have grown determined to be more assertive. As oneleading member of the FDP, the small liberal party that is part of Merkels governing coalition, insisted:"For once, weve got to show that were capable of saying no." In that spirit, Germanys leaders are talkingup a storm about their countrys self-interest even as they gamble away the economic livelihood of theirown citizens.A transformed Germany now threatens the stability of the euro, and indeed the future of the EuropeanUnion itself. But the reason is not just that the new Germany has grown more selfish. If Germans weresimply acting rationally, they would bail out the euro. The problem, rather, is that the leaders of the newGermany are so mired in an overreaction to the past that they have become blind to their own self-interest.”[24]If over-reaction to an imaginary past is the first component of German irrationality today, a secondcomponent could well be the tension between West Germans and East Germans, twenty years after whatthe former call “reunification” and the latter “annexation” (Anschluss). As recently as 2010, the countrywas evenly split (48 percent yes, 47 percent no) on the question of whether the two halves of the countryare growing together as one nation![25] While in economic terms, Germany is the healthiest state inEurope today, on the cultural front, Germany comes across as the “Sick Man of Europe.” Is Germany sucha “split” nation that the only way for Germans to feel like “ein volk” is to actively try to become hated bythe rest of the continent?BetweenWanderlust andWeltpolitikThe third component of German irrationality has to do with the future. Even as the country was spendingmore than 2 trillion dollars rebuilding the East, Germany has managed to remain the world’s second-largest exporter after China. By all accounts, it is an impressive performance. But it seems that, in theprocess, Germany has caught what could be called the “Turkish disease.” Just like Turkey today thinks ofitself as the Germany of the Middle East, Germany is tempted to fancy itself as the “Middle Kingdom” ofEurasia.
  11. 11. Among the various trial balloons and calculated gaffes that came out this year, the most revealing iswithout contest the 16-page “The New German Question : How Europe Can Get the Germany it Needs,”written by Ulrike Guerot, the head of the Berlin branch of the Soros-sponsored European Council onForeign Relations (ECFR). After decades of exasperating German Kantian cant, the fiery rhetoric of thered-haired Valkyrie of the German foreign policy establishment is actually a breath of fresh air.The Bonn Republic is dead, get used to it, Guerot argues unapologetically. The Berlin Republic thatreplaced it may appear to some Europeans observers as “increasingly evasive, absent and unpredictable.”In fact, Germany is not so much experiencing a temporary bout of Wunderlust as it is embarking on arevisionist attempt to develop a Weltpolitik:“Germany is revising each of the four pillars of European integration (the Franco-German relationship, therole of the European Commission, the disproportionate influence of small states, and Germany’swillingness to pay more without getting more formal power)… Germany is breaking free from itsreflexive Atlanticism and revising the role it has played within the post-Cold War securityarchitecture…While Germany is increasingly assertive in promoting an economic policy for the EuropeanUnion, it refuses commitment on pressing foreign policy issues such as Libya, and increasingly charts itsown relationship with China and Russia.” [26]For political, economic, and even generational reasons, euroskepticism has lately become “chic” amongGerman elites and public opinion alike, with 63 percent of Germans having little or no confidence in theEU. Since an increasingly euroskeptic German public opinion is tempted to “go global alone,” Guerotargues, it all boils down to this: either it will be a unilateral German Weltpolitik; or, if Europeans are smartenough to “hug Germany close” rather than form coalitions that could one day be used to “balanceGerman power,” it can become a German-led European Weltpolitk.As if that was not clear enough, Guerot singles out the Anglo-French entente cordiale as the mainstumbling block: “Some commentators argue that the EU could function with a German-led economicpolicy and an Anglo-French foreign policy. But it is neither realistic nor desirable to assume thatGermany, an economic hegemon with global commercial interests, would limit itself to the role of abystander on foreign policy issues.”What makes Guerot’s paper so interesting is that, alongside analysis and advocacy, it also offers arevealing pot-pourri of all the frustrations of the German foreign policy establishment in general, and itsparanoid view of Anglo-French relations in particular. Thus, according to Guerot, the same states which,on a variety of low-politics issues, “bandwagon” with Germany, do not hesitate, on high-politics issues, to“balance” against Germany:“In fact, coalitions of member states are already forming against Germany as well as around it. Forexample, although the Franco-British defence deal was about saving capabilities in the two big defencespenders, it has been seen in some quarters as a way for France to diversify its political base in Europe…”What’s behind this particular animus against France and Britain, you wonder? For one thing, the French-British entente cordiale of November 2010. For another, the Libyan affair of March 2011.To all Western analysts, the most puzzling development this year concerning Germany is Berlin’sdecision to side with China and Russia (and the BRICS in general) over Libya in the UN SecurityCouncil. There is of course a quasi-official, detailed, and perfectly plausible, explanation for that:Chancellor Merkel and her staff believed that a major country like Germany would have to actuallyparticipate militarily if it voted in favor of the resolution and, since they were more than skeptical on thechances of the operation, Germany preferred to abstain.[27]
  12. 12. One could argue that when, like Germany, you are seeking a permanent seat at the UNSC, you better geton board any operations decided by your allies, irrespective of your misgivings. But it apparently did notcross the mind of German leaders that a rather spectacular abstention vote would jeopardize theircandidacy in the eyes of its Western allies (and that, in itself, only proves that Germany is not quite readyfor diplomatic prime-time).But there is also an unofficial explanation. For decades now, the three Western permanent members of theSecurity Council (US, UK, France) have formed a discreet, but cozy, directorate known as the P-3. InJanuary 2011, Germany began its two-year term as a rotating member of the Security Council and,according to one account, was “shocked, shocked, shocked” to discover the existence of this directorate(which had not bothered Germany the least during its previous stint at the UNSC in 2004):“Even prior to the Libya vote, Germany had become aware that even its closest allies were not willing togrant Berlin a special role. The Germans wanted to be involved in preliminary discussions among theFrench, British and Americans, as the Security Council veto holders established their position for futuresessions. But Berlin was coolly and decidedly rebuffed. Instead, the Western powers merely promised tokeep Germany informed. Indeed, from the perspective of New York, German influence is extremelylimited. A different hierarchy prevails in the UN than in the European Union, even among the Europeans.The Germans and the French are the closest of partners in the EU; at the UN it is Paris and London. Theveto powers enjoy a special status. From their standpoint, the Germans are still novices in internationalpolitics. For the French and the British, there is no reason to support Germanys petition to join their club.”[28]What is not clear from the Spiegel account, though, is whether Germany was kept out of non-Libya relatedP-3 meetings (which would make sense), or whether Berlin was also kept out of Libya-related discussions– which would be more questionable, given the status of Germany as one of the four “key allies” inNATO.[29] Be that as it may, Berlin decided to retaliate by siding with the BRICS over Libya, and did notrealize until later that you just can’t behave in the geopolitical 15-member UNSC the same way you didthe year before in the geo-economic G-20. As a result, the Obama Administration has pointedly“abstained” from endorsing Germany’s candidacy for a permanent seat while endorsing the candidacy ofother countries.Ostpolitik or Finlandization?Today, at the risk of simplifying, one could say that what Germany wants from France and Britain is, so tospeak, less P-3 and more EU-3. For Guerot at least, the French-British entente cordiale gives too muchimportance to geopolitical cooperation with the US at the global level, and not enough to geo-economiccooperation with Germany over Eurasian issues:“[European] critics saw the approach to Russia of [Chancellor] Schröder … as economically-drivenappeasement. [But] although business deals remain a key part of the picture under Merkel, the relationshiphas become more balanced and German diplomacy towards Moscow has at times been very creative. Forexample, at the Meseberg summit last year, Berlin proposed a strategic dialogue between the EU andRussia, but made it contingent on Russian help in resolving the Transnistrian conflict. However, theseapproaches have too often not been sufficiently embedded in a common European approach……The momentum of a future CFSP will depend on the approaches of the big three. France and the UKhave a common responsibility to integrate Germany instead of reverting to a Franco-British ententecordiale. One way to do this would be for the European External Action Service (EEAS) to issue a newstrategic White Book for Europe, helping to recreate a new strategic community in which Germaninterests are mirrored in a wider European strategy that clearly goes beyond trade issues…it is important
  13. 13. for Europe’s big states to revisit the dysfunctional European security arrangements and find ways ofengaging Germany in a European attempt to re-craft relations with Russia, Turkey and the countries inbetween.”Bluntly put, Germany wants Britain and France to give legitimacy and support Germany’s Ostpolitiktoward Russia. The problem is twofold:On the energy front, Germany’s Russia policy is rapidly leading to an energy “Finlandisation” of Europe.Germany has favored Russian schemes over the EU-sponsored Nabucco pipeline, and Berlin’s recent (andunilateral) decision to abandon nuclear activity makes Germany more dependent than ever on Russianenergy. What makes German policy all the more dangerous is that, if the alternative for Europe on theenergy front was to become a choice between, so to speak, Islamization by the Middle East orFinlandization by Russia, Europeans would be “naturally” inclined to chose the latter and followGermany’s lead (if only because the Russian people don’t emigrate en masse to Europe.)Then there is the “creative” Meseberg issue. Without prior consultation in the EU or NATO, Germanchancellor launched the Meseberg initiative with Russia in May 2010, ostensibly aimed at resolving theleast important problem in Europe today (the status of Transnistria). As Jamestown Foundation veterananalyst Vladimir Socor warned three months later:“The German government can gain added weight for its own Russia policy by embedding it to someextent in a European framework. As part of this policy, Berlin seeks ways gradually to accommodateRussia into decision-making processes of the European Union and NATO…Germany is movingincrementally from special relations to strategic cooperation and sector linked economic integration withRussia. Outrunning EU-Russia relations, Germany seems positioned to initiate security arrangements ofthe EU with Russia, separately from the United States and NATO, and potentially reducing the relevanceof both…The document proposed by Chancellor Angela Merkel, and finalized by her with President DmitryMedvedev during their meeting at Meseberg Castle near Berlin on June 4-5 (Meseberg Memorandum) isthe seminal document for this process (, June 5). The document proposescreating an EU-Russia Political and Security Policy Committee, to be chaired by the EU’s HighRepresentative for Foreign Policy Catherine Ashton and Russia’s Foreign Affairs Minister Sergei Lavrov,for high-level consultations and decisions. The committee’s mandate would include “setting ground rulesfor joint civilian and military crisis management operations by the EU and NATO,” as well as “workingout recommendations on various conflicts and crisis situations, to the resolution of which the EuropeanUnion and Russia may contribute within appropriate multilateral forums.”On these definitions, the EU-Russia Committee would be vested with greater powers than those of theNATO-Russia Council. It would also institute an EU-Russia policy coordination mechanism, such as theEU does not have with the United States or with NATO (despite the overlap in EU-NATO membership).Thus defined, the committee can open access for Russia to the EU’s own decision-making process(without any influence from the EU on Russia’s decisions). It could also inspire Russian demands foraccess to NATO decisions through the NATO-Russia Council.”[30]“Chermany” versus “Chimerica”?Germany is the world’s second largest exporter after China. Since last year, German growth has beenlargely driven by exports to China itself and, since last year as well, German investments in China haveactually overtaken German investments in France.
  14. 14. In the geo-economic mind of German elites, the world of the future is best defined as a tripolar world:China, America, Germany. As Germany’s behavior in the G-20 last year showed, the idea in Berlin is thatthe tug-of-war of the century might well pit “Chimerica” against “Chermany.”As it now stands, Guerot argues, the world is “increasingly governed by a G2 of the US and China,” andEurope needs a global strategy. Germany has pondered the fate of Japan, which failed to regionalize itsChina policy in time, and now finds itself isolated. It’s now Europe’s turn to realize that “when Berlin isresponsible for 45 percent of EU trade with China – the most significant of the emerging powers – will ittake lessons from the other 26? Obviously not (sic). But would Germany benefit from a commonEuropean stance to China? Probably yes…”Guerot is certainly right to point out the dangers of letting China take a divide-and-rule approach vis-à-visEurope: “The number of [European] countries seeking a united and assertive political and economicapproach is in fact shrinking. Even countries that were in favour of a tough economic strategy, such asSpain, Portugal, Greece and Poland, are now giving up the fight on sensitive issues such as anti-dumpingor market access for public infrastructure projects. In 2010, the EU began to develop a better strategicapproach to China based on reciprocal engagement, but this was undermined by the vulnerability ofperipheral member states to Chinese “bond diplomacy”. Unless member states get much better atcoordinating their China policy very quickly and learn how to use their leverage (for example, China’sneed for advanced technology), there is a danger that they will be picked apart.”In fact, in a much-discussed report published this summer, Guerot’s ECFR colleague Francois Godementhas drawn attention to the ongoing “Scramble for Europe” on the part of Beijing:“China is now in effect applying to Europe’s periphery a set of strategies and tools that has paid offelsewhere in the developing world. China has long dealt bilaterally with countries in Africa, the MiddleEast and Latin America while paying lip service to regional institutions. It emphasises “mutual benefit”,friendship and forms of assistance that go to the heart of local elites, builds up a chain of influence thatextends from transport (ports, airports, roads) to local assembly (with designated Chinese industrial parks)and logistics (China’s sea, air and container companies, telecoms networks) and eventually to distribution(from small-scale traders who form a sizable portion of Chinese immigrants to large distribution firmsworking up the value chain).Europe is now beginning to experience the same approach as China buys or builds infrastructure projects,snaps up ailing companies or collects assets from quasi-insolvent states, gets a foothold in the distributionsector and uses local media to increase its soft power. China has particularly focused on the Mediterraneanand south-eastern member states most in need of Chinese cash. This has created new relationshipsbetween peripheral member states and China. For example, Portugal, Italy, Greece and Spain nowrepresent 30 percent of Chinese investments and trade facilitation in Europe, and Central and EasternEuropean countries another 10 percent – a disproportionately large amount given the overall size of theireconomies. The danger for Europe is that there will be a kind of “China lobby” of smaller member stateswithin the EU. Even after 2014 – when a majority decision at the European Council will require 15member states with 65 percent of the population – China could depend on some of them – particularlyCyprus, Malta and Greece.”[31]But though the threat of an economic take-over of Europe by China is real, Guerot fundamentallymistakes the symptom for the disease: if Club Med countries are increasingly responsive to Chinese “bonddiplomacy,” it is because they have no other alternative since Germany refuses to turn the ECB into alender of last resort. That’s the first problem with Germany’s China policy.There is another problem: China’s “need for advanced technology” is growing indeed, but it is not limited
  15. 15. to German high-speed trains, and includes military technology. As it happens, Germany has becomeEurope’s leading arms exporter. As Hans Kundnani himself concedes:“Arms exports have always been a kind of blind spot in the Federal Republic’s “civilian power” identity.Although it had rejected the use of military force as a foreign-policy tool and liked to think of itself as aFriedensmacht (force for peace), it continued to sell weapons throughout the post-war period. .. Accordingto the Stockholm International Peace Research Institute (SIPRI), Germany is now the third largestexporter of major conventional weapons after the United States and Russia, with 11 percent of the globalmarket in the last five years compared to 7 percent for France and 4 percent for the UK. Thus whileGermany spends less on defense as a proportion of GDP than France or the UK and contributes less tooperations like the ISAF mission in Afghanistan, it sells more weapons than they do. Moreover, asEuropean governments make defense cuts, more of those weapons are sent outside of NATO.[32]Since the Berlin Republic now defines itself almost exclusively as a “geo-economic power,” there is nodoubt that the first priority of a German-dominated EU China policy would be to lift the arms embargo inplace since 1989. American taxpayers would thus continue to provide for the defense of the “civilianized”Germans (who spend only 1.3 percent of their GDP on defense) while Germany would be making moneyselling advanced military technology to America’s peer competitor.France’s Counter-OffensiveIn the past two years, French elites have not been as strident as their British counterparts. As paradoxicalas it may sound, the German offensive has in fact, so far, brought France some “relative gains” (as theysay in game theory). First, in recent years, the German-French “engine,” which had worked well in a six-,nine-, or twelve-member Europe, had become increasingly “contested” in a 27-member Europe; thefinancial crisis has helped the “engine” recover its centrality (even though France is now in a juniorposition). Second, while Germany’s goal is ultimately inimical to France, the emergence of the MerkelMethod has had, for the time being, the advantage of weakening an EU Commission which, in the eyes ofthe French, had become too powerful anyway. Third, Sarkozy has been able to leverage the crisis to warnFrench public opinion that, if they don’t drink their castor oil now, Mutti Merkel and the BundesbankBruders will come to Frankreich later – and yes, they have “vays” of making you drink.The French reaction to Germany’s power play in the past two years has been so complex that a thoroughanalysis would require another article. Suffice it here to say that, in November 2011, in an unusualdeparture from established French diplomatic practices, the outgoing French Ambassador to Germany,Bernard de Montferrand, published a book (apparently based on a report to the Quai d’Orsay) entitledFrance-Germany: The Moment of Truth.[33]Much of Montferrand’s book is actually taken up by the contrast between the growing “convergence” ofFrench and German societies in the years 1945-2000, and the French “decrochage” (i.e. the reform gapand the resulting loss of competitiveness) in the past decade. In short, for French officialdom, it wouldappear that the ten-year-old reversal in the correlation of forces (France the horse vs. Germany the rider) isnot the sign of an irreversible decline, but of a temporary aberration.Wishful thinking? Not necessarily: as French public opinion is reminded at regular intervals by the Frenchmedia, if current demographic trends hold, France will be the most populated country in Europe by 2050 –ahead of Germany. When it comes to making babies, the French remain terribly competitive (it gives awhole new meaning to the concept of levee en masse) and France appears well positioned to win ademographic “war of attrition” against Germany in a generation.But quantity alone won’t do the trick; qualitatively, the French also have to become more “German.”
  16. 16. That’s the message of Montferrand, and that was also the message of President Sarkozy in a recentStrasbourg speech. True, a “Travail, Famille, Patrie” rhetoric, however justified it may be in presentcircumstances, is rather risky when you are a self-proclaimed Gaullist, have presidential elections in fivemonths, are low in the polls, and your opposition (both left and right) is accusing you of having concededtoo much already.But Sarkozy’s concessions to Merkel so far have been in fact largely tactical, and mostly reversible. Hismain priority in the short-term is to get Merkel to agree to make the ECB the lender of the last resort (likethe U.S. Federal Reserve). He might well succeed, if only because the markets are now turning againstGermany itself and, once they start scrutinizing the German books, they may find out that, as theeconomic journal Handelsblatt pointed out in September, Germany’s real debt is actually more than twicethe size of the official debt. For short-term tactical reasons, Sarkozy might even agree in principle in thecoming months with the idea of amending the Treaties; in the long-term, though, the end result willprobably not be significantly different from what they have been during Germany’s two previous attempts.Though ostensibly written for a French audience, Montferrand’s book is also an indirect reply to theGuerot Manifesto, written in the best diplomatic (read: “coded”) tradition. In that respect, two “messages”are worth mentioning:1) While today as twenty years ago, France remains open to the idea of intergovernmental, variable-geometry, “enhanced cooperation” scheme in whatever domain, France remains as opposed as ever to theidea of a federal union (at 27 or 17). In short, between the British idea of “network” and the French idea of“maillage” (through enhanced cooperation), there is only a difference of degree; between these two andthe German idea of a “core,” there is a difference in kind. Germany is after supranational political union,which would require revising the EU treaties; France and Britain would be happy with intergovernmentalenhanced cooperation, which would not require a revision. While German’s minimal objective is a two-speed federal Europe, France and Britain, by contrast, are in favor of a multi-speed confederal Europe (theonly significant source of friction between France and Britain appears to be the so-called Tobin tax,supported by both Paris and Berlin, and to which London is perhaps too dogmatically opposed ).[34]2) While there are plenty of foreign issues on which greater cooperation between France and Germany ispossible, they apparently don’t include Russia and China since, on these issues, Montferrand is either non-committal or conspicuously silent. What the French diplomat goes out of his way to demonstrate, though,is that the possibility, raised by Ulrike Guerot, of a “non-aligned Germany” is simply not realistic. End ofthat discussion.Ever since German reunification, France has tried to co-lead EU domestic affairs with Germany and co-lead EU foreign affairs with Britain. But the game is becoming harder to play for three reasons: 1) theeuro is no longer what hides, but what reveals, German strength and French weakness; 2) Germany andBritain are on a collision course, and Germany and Russia are on a collusion course; 3) Sarkozy has toplay on a three dimensional chessboard (the global markets, Germany, and French public opinion)with three increasingly diverging operational tempos.In contrast to the time of the two previous German power plays, there is one genuine new development:France no longer seems to believe in the possibility of turning the current Europe-Espace into anEurope-Puissance. The French will no doubt continue to pay lip service to the idea of a European defense,but mostly in order to protect the defense industrial base of Europe.France is a half-continental, half-maritime, power and, for centuries, its foreign policy has oscillated(often a contretemps) between Europe and the High Seas. When the colonial French Union unraveled in1958-1962, French elites began to single-mindedly focus on a future European Union as a substitute
  17. 17. “force multiplier.” With the unexpected reunification of Germany, the dream of turning Europe into aGreater France came crashing down in 1989. For the past twenty years, France has often looked like acountry that had “lost an empire and not yet found a role” (to paraphrase Dean Acheson on post-WWIIBritain). There are signs now that a fifty-year long continental cycle of French foreign policy is coming toan end, and that the French are turning their gaze towards the High Seas once again.Part of this rebalancing has of course to do with the fact that Europe has become a Greater Germany. Themore Berlin flexes its geo-economic muscles on the continent, the more Paris tries to compensate byshowing a renewed activism on the global geopolitical front. But part of it has also to do with the growingFrench realization (left and right) that the geopolitical future could well pit the Rest against the West, andthat, within this “Defense of the West” paradigm, France has more in common with les Anglo-Saxons thanwith the rest of Europe. It is therefore no coincidence if France reintegrated NATO in 2008 and enteredinto a major military partnership with Britain in 2010.At the core of France’s grand strategy today, there is first and foremost the P-3 (US, UK, France) at theglobal level.[35] Ideally, Paris would not mind supplementing it at the regional level with a G-3 (France-Germany-Russia) – if only to prevent the rise of a German-Russian condominium over Eurasia. But Berlinis adamantly opposed to turning the existing German-Russian tete-a-tete into a ménage a trois. Lastly, theFrench remain open to the possibility of turning the existing French-British entente cordiale into an EU-3(Germany, France, Britain), but not on German terms, as Montferrand’s book makes it clear.“Too Big for Europe, Too Small for the World”?Far from solving anything, the reunification of Germany in 1989 has re-opened the German Question. Inspite of all the attempts in the past twenty years to create a “European Germany,” the old continent hasnever been more a “German Europe” than today. As Ulrike Guerot rightly puts it: “European “normality”was based to a large extent on West German “abnormality”. Now that the reunified Germany is becomingmore “normal”, it is undermining European “normality.”As early as 1997, U.S. economist Martin Feldstein had warned that, far from being the solution, EuropeanMonetary Integration (EMU) would only aggravate conflicts both within Europe and between Europe andAmerica.[36] Is it Germany’s curse to be “too big for Europe, too small for the world,” as the old sayinggoes? Is it really a systemic problem, or only a statecraft problem? Surely, there’s got to be a wayGermany can find its well-deserved “place under the sun” without wrecking everything in the process. Atany rate, it is time for Washington to step in and remind Berlin that regional coercive diplomacy is onething, global financial brinkmanship, quite another.Copyright Tony Corn 2011[1] Anatole Kaletsky, "Germany has declared war on the eurozone", The Times, November 23, 2011, “; “Is this reallythe end?,” The Economist, November 26, 2011,[2] On the evolution of the Berlin Republic’s relations with France and the U.S., see Julius W. Friend,Unequal Partners: French-German Relations, 1989-2000, Praeger, 2001, and Stephen F. Szabo, PartingWays: the Crisis in German-American Relations, Brookings, 2004).[3] Bruce Stokes, “The European Debt Crisis: Strategic Implications for the Transatlantic Alliance,” U.S.
  18. 18. Senate Committee on Foreign Relations, November 2, 2011,[4] Henry Cord Meyer, Mitteleuropa in German Thought and Action, 1815-1945, Martinus Nijhoff, 1955;Robert Mark Spaulding, Osthandel and Ostpolitik: German Foreign Trade Policies in Eastern Europefrom Bismarck to Adenauer, Gerhahn Books, 1997; Randall E. Newnham, Deutsche Mark Diplomacy:Positive Economic Sanctions in German-Russian Relations, Pennsylvania State University, 2002. VolkerBerghahn, Quest for Economic Empire: European Strategies of German Big Business in the TwentiethCentury, Berghahn Books, 1996; John Laughland, The Tainted Source – The Undemocratic Origins of theEuropean Idea, Warner Books, 1997.[5] Emmanuel N. Roussakis, Friedrich List, the Zollverein, and the Uniting of Europe, College of Europe,Bruges, 1968.[6] Edward Luttwak, «From Geopolitics to Geoeconomics: Logic of Con?ict, Grammar of Commerce»,The National Interest, Summer 1990; and The Endangered American Dream: How to Stop the UnitedStates from Becoming a Third World Country and How to Win the Geo-Economic Struggle for IndustrialSupremacy, Touchstone, 1994.[7] Hans Kundnani, “Germany as a Geo-economic power,” The Washington Quarterly, Summer 2011,[8] See Hans W. Maull and Sebastian Harnish, Germany as a Civilian Power?: The Foreign Policy of theBerlin Republic, Manchester University Press, 2001.[9] The few English-language studies include Bolsinger, Eckard, The Foundation of Mercantile Realism:Friedrich List and International Political Economy,” 2004,; David Levi-Faur, “Economic Nationalism: FromFriedrich List to Robert Reich,” Review of International Studies, 23,1997,, and Roman Szporluk,Communism and Nationalism: Karl Marx versus Friedrich List, Oxford University Press, 1988.[10] Wess Mitchell, “Perhapsburg,” The American Interest, November/December 2008,; Simon Heffer, “Rise of the FourthReich: how Germany is using the financial crisis to conquer Europe,” Daily Mail, August 17, 2011,[11]“Berlin lays groundwork for a Two-Speed Europe,” Spiegel, 09/05/2011,,1518,784348,00.html.[12] For the English version, published in March 2011, see Andreas Rinke, “The EU Chancellor,”Internationale Politik, 01/03/2011,[13] As Michael Lewis put it uncharitably in a recent and much-discussed article:” Extremely smarttraders inside Wall Street investment banks devise deeply unfair, diabolically complicated bets, and then
  19. 19. send their sales forces out to scour the world for some idiot who will take the other side of those bets.During the boom years a wildly disproportionate number of those idiots were in Germany.” “It’s theEconomy, Dummkopf,” Vanity Fair, September 2011,[14] Daniel W. Drezner, “We interrupt our normal blogging to inform you of the eurocrisis,” ForeignPolicy November 18, 2011,[15] Julian Lindley-French,” The Strategic Influence Game 5: A German Europe or a EuropeanGermany?,” Atlantic Council, November 15, 2011, (emphasis added).[16] Geir Lundestad, “Empire by Invitation? The United States and Western Europe, 1945-1952, Journalof Peace Research, 23, 3, September 1986,[17] As one scholar points out: “[In 1889] Wilson viewed Germany not as an autocracy, but as a mostadvanced constitutional state… Only after U.S.-German political rivalry developed did Wilson begin todifferentiate a democratic America from an autocratic Germany. Indeed, Americas very self-portrayal as ademocracy and the norms by which it defines democracy were in part shaped by the conflict with ImperialGermany. Ido Oren, “The subjectivity of ‘democratic’ peace: changing U.S. perceptions of imperialGermany,” International Security, 20, 2, Fall 1995,[18] “EU Summit paves the way for a split continent,” Spiegel, 31 October 2011,,1518,795059,00.html.[19] For a tentative calendar of reforms, see Quentin Peel, “Pressure grows for “more Europe”, FinancialTimes, October 16, 2001, For a menu of reforms, see Phillip Wittrock, “German politicianscall for changes to EU Treaties,” Spiegel, October 14, 2011,,1518,druck-791914,00.html.[20] “Merkel eyes constitution revamp to boost EU powers,” Spiegel, November 14, 2011,,1518,797584,00.html.[21] “How the EU can emerge from the ashes,” Spiegel, 11 November 2011,,1518,797626,00.html.[22] While the chances of a “gentler, kinder German Reich” emerging in late 2013 are still open toquestion, it is worth noting that, when it comes to amending the Basic Law, Merkel seems to have theendorsement of the main parties (CDU, FDP, SDP). Daily[23] Ambrose Evans-Pritchard, « America and China must crush Germany into submission,”Telegraph, November 9, 2011,
  20. 20. [24] Yaschka Mounk, “Germany’s not that sorry anymore,” Foreign Policy, October 14, 2011,[25] Quentin Peel, “Germany: an unequal union,” Financial Times, September 30, 2010,[26] Ulrike Guerot and Mark Leonard, The New German Question: How Europe Can Get the Germany ItNeeds, European Council on Foreign Relations, April 2011,[27] Andreas Rinke, “Srebrenica or Afghanistan?,” Internationale Politik, June 14, 2001,[28] Ralf Neukirch, “Germany’s Woeful Security Council Record,” Spiegel, September 21, 2011,,1518,787322,00.html.[29] On this quadripartite arrangement, see David Yost, NATO Transformed: The Alliance’s New Roles inInternational Security, U.S. Institute of Peace Press, 1998, and Helga Haftendorn, “The Quad: Dynamicsof Institutional Change,” in Robert O. Keohane, ed., Imperfect Unions: Security Institutions over Timeand Space, Oxford University Press, 1999.[30] Vladimir Socor, “Meseberg Process: Germany testing EU-Russia security cooperation potential,”Eurasia Daily Monitor, October 22, 2010,[31] Francois Godement and Jonas Parello-Plesner, The Scramble for Europe, European Council onForeign Relations, July 2011, On Chimerica, see Niall Ferguson, “What ‘Chimerica’ has wrought,” The American Interest,January/February 2009, on Chermany, seeMartin Wolf, “China and Germany unite to oppose global deflation,” Financial Times, March 16, 2010,[32] Hans Kundnani, “Germany’s foreign policy is increasingly driven by economic interest,”Internationale Politik, October 31, 2011, AsKundnani points out, in 2011, there was a striking contrast between Germany’s non-participation in Libyaand the fact that a few months later, “it emerged that the German government had agreed to a 1.5 billioneuro deal to sell 200 Leopard 2 tanks to Saudi Arabia—which had sent troops to Bahrain to help theauthorities there put down pro-democracy protests in March.”[33] Bernard de Montferrand and Jean-Louis Thierot, France-Allemagne: l’Heure de Verite, Tallandier,Paris, 2011.[34] It is therefore mistaken – or misleading - to frame the issue as follows: “During the current crisis, theold EU tension between the federalists and the so-called intergovernmentalists -- who want power toremain in the hands of the national governments -- has broken out once again. In his speech on Monday,
  21. 21. Cameron said that the EU needs "the flexibility of a network, not the rigidity of a bloc." In contrast,Merkel and French President Nicolas Sarkozy have been campaigning for a "core" Europe consisting ofthe 17 euro-zone countries.” (Carlston Volkery, “Tensions Ahead of David Camerons Berlin Visit,”Spiegel, 11/17/11,,1518,798399,00.html.[35] See Tony Corn, “The Atlantic Alliance and the Sino-Islamic Nexus,” Small Wars Journal, June 2011,[36] Martin Feldstein, “EMU and International Conflict,” Foreign Affairs, November/December 1997, See also former U.S. Ambassador to Germany JohnKornblum, “Without the euro, would Europe have turned to war?,” Washington Post, September 24,2011, About the Author Tony Corn Dr. Tony Corn taught European studies at the U.S. Foreign Service Institute in Washington, DC. The opinions expressed here are the author’s own and do not represent the views of the U.S. Department of State.Available online at :{1}{2},1472596,10834976.html{3}{4}{5}{6}{7}{8}{9}{10}{11},1518,784348,00.html{12}{13}{14}{15}{16}{17}
  22. 22. {18},1518,795059,00.html{19}{20},1518,druck-791914,00.html{21},1518,797584,00.html{22},1518,797626,00.html{23}{24}{25}{26}{27}{28},1518,787322,00.html{29}{30}{31}{32}{33}{34},1518,798399,00.html{35}{36}{37} Copyright © 2012, Small Wars Foundation. Select uses allowed by Creative Commons BY-NC-SA 3.0 license per our Terms of Use. Please help us support the Small Wars Community.