Post by Bozur on Jul 3, 2005 23:16:26 GMT -5
Not So Sweet for Europe: Germany Is No Sugar Daddy Now
Istvan Banyai
By MARK LANDLER
Published: June 26, 2005
FRANKFURT — Europe spent the last century haunted by the specter of a too-powerful Germany, finally laying it to rest by forging an economic alliance to constrain the giant in its midst. Now, as the European Union grapples with a deepening political crisis, it is discovering the costs of a too-weak Germany.
With Europe's leaders waging a nasty war of words over the future of their union, Germany might have been expected to play its usual role: bridging the gap between competing poles in France and Britain and opening its checkbook when squabbles threatened what is known as the European Project.
This time, however, Germany is AWOL.
Burdened by huge debts and a stagnant economy, it can no longer afford to be the European Union's sugar daddy. And it is about to face a political reckoning of its own, with an election this fall that could oust Chancellor Gerhard Schröder and call into question the bedrock social and economic principles that have accompanied Germany's growth since World War II.
With so much up in the air, Germany has gone from being Europe's sturdy anchor to its biggest wild card.
"Germany's political strength has always stemmed from its economic strength," said Josef Joffe, co-editor of the weekly paper Die Zeit. "But now, Germany is the sick man of Europe."
Or as Daniel Gros, director of the Center for European Policy Studies in Brussels (and a German), puts it, "Europeans look on Germany as a mollusk without a spine, not a Prussian soldier marching in goose step."
Europe can't afford for its most populous and economically important country to be a squishy sea creature any more than for it to be a hegemonic warrior. So as Europe debates what future it wants for itself in the wake of its discredited constitution and the budget standoff, a parallel contest is under way for the future of Germany. In a way, the two are the same.
On one side is France, historically the country that has driven the politics of the European Union, usually with the assent of Germany, and is now the staunchest defender of old-style European policies - be it subsidies for farmers, job protection or a robust state role in the economy.
On the other side is Britain, which takes on the presidency of the European Union next month, and is challenging both how Europe is financed - it wants to cut back farm subsidies, which it says are leeching money away from better uses - and how countries are overhauling their economies to face the pressures of global competition (not radically enough, it says).
Each country has a leader with liabilities and personal agendas. But neither Tony Blair nor Jacques Chirac will face the voters this year. Germany - with 11 percent unemployment, a stalled economy, an unpopular left-of-center chancellor and a rising conservative opponent - is to go to the polls in September. The sense of Germany being in play is everywhere these days.
Mr. Blair reached out to Germans last week with an extraordinary op-ed article in Bild, the nation's best-selling tabloid. Defending himself against accusations that he torpedoed the budget negotiations, Mr. Blair said Europe needed a "future-oriented" approach. "We must invest in innovation and education," he wrote, "not in giving every cow two euros a day."
Mr. Schröder, whose own efforts to shake up Germany's calcified labor market may have sealed his fate, replies that those who prescribe Anglo-Saxon economic policies as a remedy for Europe's ills are doing a "terrible disservice to the desires and rights of the next generation."
Desperate to avert an electoral rout, left-wing elements in his Social Democratic Party have pushed a cruder variation on that theme, going after hedge funds and other foreign investors, whom they label as "locusts" bent on plundering German assets and putting workers on the street.
To some, the debate between Anglo-Saxon and Continental models is a caricature that fails to take into account the complexities of Europe. "I see a convergence toward a model that is less liberal than what Margaret Thatcher advocated but less restrictive than what Jacques Chirac is defending," said Katinka Barysch, chief economist at the Center for European Reform in London.
The big question is, what does Angela Merkel, who many here expect to be Germany's next chancellor, believe?
A consummate party politician, Mrs. Merkel is known less for her adherence to any dogmas than for her remarkable rise to the top of the Christian Democrats, the conservative, male-dominated party of Helmut Kohl. While many believe she has the heart of a reformer, few profess to know what she would do once in power.
Would she play down the Franco-German partnership, so lovingly tended by Mr. Schröder and Mr. Chirac, in favor of Atlantic allies like Britain and the United States? Aides to Mrs. Merkel say she is receptive to Mr. Blair's calls for the European Union to revisit the subsidies for its members' agricultural products, which disproportionately benefit French farmers.
An even bigger question is how much Germans are willing to tolerate in order to shake their country out of its lethargy.
"Germans are beginning to understand that what Chirac and Schröder have been telling them is wrong - that if we turn Europe into a Maginot Line against globalization, it will somehow protect them," said Mr. Joffe of Die Zeit. "They're saying, 'We'll bite this bullet, but not with you.' "
Istvan Banyai
By MARK LANDLER
Published: June 26, 2005
FRANKFURT — Europe spent the last century haunted by the specter of a too-powerful Germany, finally laying it to rest by forging an economic alliance to constrain the giant in its midst. Now, as the European Union grapples with a deepening political crisis, it is discovering the costs of a too-weak Germany.
With Europe's leaders waging a nasty war of words over the future of their union, Germany might have been expected to play its usual role: bridging the gap between competing poles in France and Britain and opening its checkbook when squabbles threatened what is known as the European Project.
This time, however, Germany is AWOL.
Burdened by huge debts and a stagnant economy, it can no longer afford to be the European Union's sugar daddy. And it is about to face a political reckoning of its own, with an election this fall that could oust Chancellor Gerhard Schröder and call into question the bedrock social and economic principles that have accompanied Germany's growth since World War II.
With so much up in the air, Germany has gone from being Europe's sturdy anchor to its biggest wild card.
"Germany's political strength has always stemmed from its economic strength," said Josef Joffe, co-editor of the weekly paper Die Zeit. "But now, Germany is the sick man of Europe."
Or as Daniel Gros, director of the Center for European Policy Studies in Brussels (and a German), puts it, "Europeans look on Germany as a mollusk without a spine, not a Prussian soldier marching in goose step."
Europe can't afford for its most populous and economically important country to be a squishy sea creature any more than for it to be a hegemonic warrior. So as Europe debates what future it wants for itself in the wake of its discredited constitution and the budget standoff, a parallel contest is under way for the future of Germany. In a way, the two are the same.
On one side is France, historically the country that has driven the politics of the European Union, usually with the assent of Germany, and is now the staunchest defender of old-style European policies - be it subsidies for farmers, job protection or a robust state role in the economy.
On the other side is Britain, which takes on the presidency of the European Union next month, and is challenging both how Europe is financed - it wants to cut back farm subsidies, which it says are leeching money away from better uses - and how countries are overhauling their economies to face the pressures of global competition (not radically enough, it says).
Each country has a leader with liabilities and personal agendas. But neither Tony Blair nor Jacques Chirac will face the voters this year. Germany - with 11 percent unemployment, a stalled economy, an unpopular left-of-center chancellor and a rising conservative opponent - is to go to the polls in September. The sense of Germany being in play is everywhere these days.
Mr. Blair reached out to Germans last week with an extraordinary op-ed article in Bild, the nation's best-selling tabloid. Defending himself against accusations that he torpedoed the budget negotiations, Mr. Blair said Europe needed a "future-oriented" approach. "We must invest in innovation and education," he wrote, "not in giving every cow two euros a day."
Mr. Schröder, whose own efforts to shake up Germany's calcified labor market may have sealed his fate, replies that those who prescribe Anglo-Saxon economic policies as a remedy for Europe's ills are doing a "terrible disservice to the desires and rights of the next generation."
Desperate to avert an electoral rout, left-wing elements in his Social Democratic Party have pushed a cruder variation on that theme, going after hedge funds and other foreign investors, whom they label as "locusts" bent on plundering German assets and putting workers on the street.
To some, the debate between Anglo-Saxon and Continental models is a caricature that fails to take into account the complexities of Europe. "I see a convergence toward a model that is less liberal than what Margaret Thatcher advocated but less restrictive than what Jacques Chirac is defending," said Katinka Barysch, chief economist at the Center for European Reform in London.
The big question is, what does Angela Merkel, who many here expect to be Germany's next chancellor, believe?
A consummate party politician, Mrs. Merkel is known less for her adherence to any dogmas than for her remarkable rise to the top of the Christian Democrats, the conservative, male-dominated party of Helmut Kohl. While many believe she has the heart of a reformer, few profess to know what she would do once in power.
Would she play down the Franco-German partnership, so lovingly tended by Mr. Schröder and Mr. Chirac, in favor of Atlantic allies like Britain and the United States? Aides to Mrs. Merkel say she is receptive to Mr. Blair's calls for the European Union to revisit the subsidies for its members' agricultural products, which disproportionately benefit French farmers.
An even bigger question is how much Germans are willing to tolerate in order to shake their country out of its lethargy.
"Germans are beginning to understand that what Chirac and Schröder have been telling them is wrong - that if we turn Europe into a Maginot Line against globalization, it will somehow protect them," said Mr. Joffe of Die Zeit. "They're saying, 'We'll bite this bullet, but not with you.' "