The German election: What Europe expects - and what Germany will not do (ECFR policy brief)

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Mearsheimer, on the future of the liberal order.

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The federal government holds few illusions about the difficulty of this task. Even before the UK referendum and the prospect of disintegration, the union looked weak. Germany too appeared unable to make its influence count, failing to mobilise a joint European response to the refugee crisis. For Berlin, that time was an exceptionally lonely moment.

Berlin does not shy away from interacting with the UK and the US on core issues. In the aftermath of the Brexit referendum, the chancellor, along with other key ministers of her coalition government, went into enhanced listening mode, undertaking an extensive tour of European capitals as well as meeting member states in Berlin. The prospect of the European order crumbling generated new political momentum in Berlin and elsewhere.

In fact, it has created new space for cooperation. But is it anything more than new wine in old skins? Our Union is undivided and indivisible. The document reflected a carefully balanced compromise between member states as well as the EU institutions. But it also reflected the direction of travel agreed by core EU members Germany, France, Italy, and Spain when they convened in Versailles earlier that month to coordinate their positions ahead of the Rome meeting.

They want to lead the union into the future by investing again in more ambitious policies. In their view these might have to be initiated by groups of member states in order to create political momentum for the union at large. Nevertheless, new ECFR research shows, with very few exceptions, that EU member states still share the fear that moving at different speeds will accelerate disintegration rather than help the union out of its deadlock.

There is a wide range of views among experts and officials in Berlin about the risks and benefits of different types of flexible cooperation. But, overall, there is now a readiness within the government to explore new ways of working together in order to achieve better collective results. Flexibility is no longer seen as contributing first and foremost to disintegration.

Instead, after years of division on the euro, migration, and security, flexibility is viewed anew as something that can be used to show that working together does pay off, and that it can help overcome divisions. That said, it remains the case that a preference for working on a union-wide basis is stronger in Germany than elsewhere see chart above. ECFR research from September shows that opinion among policymakers in Germany remains above the EU average, with 65 percent backing a union-wide approach compared to 52 percent across the EU.

This preference shows not only the strong sense of responsibility in Berlin for keeping the union of 27 together. Across the EU it can also help build trust in the argument that Germany still has relatively little appetite for going it alone, or in small groups, as long as Berlin sees that it is possible to mobilise the whole range of member states.

INTRODUCTION

This is why, in the German view, a successful flexible union needs two things: Based on this overall preference for working with all member states, Germany will try to keep flexible Europe inclusive and prevent any exclusionary dynamic from emerging. Against this background, the conservative approach of the March Rome Declaration is not necessarily a mirror of the realities in Berlin.

While the Rome Declaration focused heavily on process — listing the well-known criteria for treaty-based flexibility — the debate is in fact focused on results. How have other countries in the EU reacted to this shift in tone and emphasis? These reactive patterns look like member states seeking to reassure themselves and others that they are still part of the union that they have known.

Partner – Center for Security Studies | ETH Zurich

But something more radical seems to be happening in parallel to this ritual, something which points to a more ambitious vision emerging in Berlin about shaping policies among smaller groups of member states. It is lengthy, but the author flies some interesting kites. Everyone who knows how Brussels works knows that changes to the Lisbon Treaty as EU primary law are unrealistic in the short term.

Insofar as [cooperation] is not possible on the basis of EU primary law because of legal and de facto constraints we need to move forward pragmatically, by means of enhanced cooperation or through intergovernmental cooperation, whatever we call this in respective cases: The minister then goes on to suggest areas in which better results are needed in the short term — in particular, external border control and management, European security, and eurozone governance. Speaking about strengthening European defence, he raises the issue of the European Commission proposal for a joint European defence fund, and stresses that paying for it will have to come through national budgets, and that there should be more efficient spending in order to create greater synergies between European countries.

So, while some EU observers have started to focus on the next round of EU budget negotiations the current budget cycle will end in and predict that the new multiannual budget will become a major battleground between the member states, the real issue here is different.

This would be a new logic, and a new phase of integration in which not all member states buy into key policies. This would mean an important shift in the current EU budget practice. It would raise the question of whether this kind of flexibility could be the route to a new environment conducive to German interests and resilient against further disintegration.

Commentator and former ECFR research director Hans Kundnani argued in a recent policy paper that the election of Trump could deal a blow to German power within the EU, as it means a new focus on security and defence, areas in which Germany is weak by comparison to the UK and France. But for policymakers in Berlin, this is not what they are working towards — it would be defeatist to do so. Both the CDU of Merkel and the Social Democrats of Martin Schulz, who is set to challenge Merkel in the battle for the chancellorship, are strongly committed to keep Germany engaged in the EU, and to use the union to leverage German power.

Berlin has good reason to be confident that such like-mindedness is slowly returning to core EU capitals. The energy to drive this new phase of the union, however, remains clearly in the camp of members which share fundamental values and have a similar outlook on the world. Will the glue formed by the new external pressure on the system be strong enough for leaders to overcome their differences?

The German election: What Europe expects - and what Germany will not do

Flexible modes of working together, then, can also be interpreted as a vehicle to generate and maintain much-needed momentum. For the time being, Germany has taken up the fight and is seeking to use its significant power and resources in the EU to shape the union for the better, and according to its preferences. The outcome of the French presidential election has been key in this regard. Whether it liked it or not, Germany would have been pushed towards securing its interests through looking more radically beyond the current EU framework.

Macron, then, perhaps with a good dose of the benefit of the doubt, is seen as a partner in building a new kind of union by a broad range of parties in Germany, including by the governing Christian Democrats and Social Democrats. Interestingly, with his views on the reform of the eurozone — a eurozone budget, finance minister, and parliament, as well as a legal framework for sovereign debt restructuring — Macron pushed the German government to take a position.

These are potentially divisive issues in Germany, and are certainly sensitive subjects to address in an election year. The question now is how open Berlin is to a Franco-German compromise on the eurozone. What, then, is the domestic context against which the federal government will have to take European cooperation forward? Is the German public willing to go along with deeper integration and new forms of cooperation? At first sight, the traditionally pro-European German public seems to be more Eurosceptic than ever before. There is a hidden reservoir of public support for strengthening European cooperation, and even integration.

In November , Eurobarometer showed that 77 percent of Germans generally identify themselves as EU citizens the EU average is 67 percent.

According to a poll conducted by Ipsos in March , only 32 percent of Germans feel the EU is currently going in the right direction. When it comes to the EU, Germans believe their country has become a lonely leader. But there is a clear demand for reform as well. There appears to be a hidden reservoir of public support for strengthening European cooperation, and even integration. Against this background, foreign minister Sigmar Gabriel recently tested an interesting message.

Gabriel explored what polls tell him about the German mindset: That there is scope for bringing in citizens around the idea of greater investment in keeping the EU together.

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In an op-ed for Frankfurter Allgemeine Zeitung he argued that Germans need to stop obsessing over their high net contributions to the EU budget. This is a foreign minister on the campaign trail, endeavouring to position his party as the progressive European force in the country, with Schulz as a credible messenger.

In fact, it is a matter of national interest. The German economic and political model benefits greatly from the EU, and Berlin continues to believe that with the EU it can best contribute to shaping a world order that serves German and European interests at large. One thing is certain: But things are not that simple.

These are playing out in the federal election campaign itself and are creating a complex interaction between the national, European, and international levels. This is illustrated in three short case studies on: In the arena of international economics and trade, two issues are foremost for Germany: On a smaller scale, there is the question of Brexit, which endangers exports to Britain.

On a larger scale, there are potential protectionist measures by the Trump administration, which might endanger not only the north American export market but threaten the global trading system too.

Germany's approach both to Brexit and a protectionist US are compatible with the interests of the other EU member states. The government can thus be expected to maintain a tough negotiating stance towards London. The corporate sector has grudgingly accepted this argument and, no matter what the election outcome in Germany in September, this position will not change. The bigger problem is the current US administration.

German foreign policy leadership: Publications

During his election campaign, Donald Trump threatened to slap a tariff of 35 percent on imports from Mexico. Another potential problem might be corporate tax reform. Proposals by leading Republicans in Congress originally included the aim of changing the tax system to a cash flow tax with border adjustment. Under these plans, expenses for imports could no longer be deducted, while revenues from exports would be tax-free.

Economically, this would be the equivalent of an import tariff and an export subsidy. While the initial proposals presented this spring by the White House do not include such a border tax adjustment, it is not entirely certain that the idea is dead for good. As lawmakers will have to look for revenue if they want to succeed in cutting tax rates, it is conceivable that a border tax adjustment will come up again in discussions.

Should the US administration push ahead with any of these proposals, a trade conflict could be on the cards. In the case of a dispute over US corporate taxes, this could easily be the biggest case ever brought before the WTO. In principle, the German approach both to Brexit and a protectionist US are compatible with the interests of the other EU member states.

None of the member states has an interest in creating incentives for others to leave. None of the EU members has an interest in the US administration closing its market and ripping apart global trading rules.

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Nevertheless, the risk of division between Germany and some of the other EU members remains. For example, in a trade dispute with the US, the Trump administration could throw other issues, not related to trade, onto the table. When it comes to the question of the large German current account, there is more potential for conflict between Berlin and European partners.

Whatever the election outcome in September, Germany will continue to argue that its current account surplus is benign. It will push back against critics, not least to prevent foreigners from dictating domestic policy measures. However, there might be differences between a government led by the Social Democrats and one led by the Christian Democrats.

Specifically, one could expect a centre-left government to increase public investment spending, which would likely bring the current account surplus down. This is not simply a foreign policy topic: Turkey is simultaneously an aspiring European nation, a worrisome illiberal neighbour on the fringes of the European Union, a NATO ally — and a domestic issue for Germany, where over three million people of Turkish origin live, about half with German citizenship. However, Germany did offer safe haven to many citizens who fled Turkey because of the crackdown after the July coup attempt.

The Turkish community will emerge as a key topic between Ankara and Berlin over the next few years.

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