Competition and “constitutionalization”

There has been much discussion of the role of ordoliberalism in Germany’s approach to the euro crisis (see for example this paper by two former colleagues at the European Council on Foreign Relations and this paper by my former Transatlantic Academy colleague Wade Jacoby). But of course the story of how German ideas have influenced the European Union does not begin with the Greek crisis in 2010. It is well known that the European Central Bank (ECB) reflects the values of the Bundesbank. (Actually, it in some way doubles down on them – the ECB is even more independent, and has an even tighter focus on price stability, than the Bundesbank.) Less well known, though, is the way German ideas on competition policy that go back to ordoliberalism have shaped European integration since its beginnings in the 1950s. You might almost say that competition policy is the missing link between histories of ordoliberalism and the EU.

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Orwell and China

Under Mao Zedong, China defined itself as a socialist country – albeit one with “Chinese characteristics”. But in the nearly 40 years since it began to “open up” under Deng Xiaoping in 1979, it has evolved into something much more puzzling. It has embraced capitalism to a large extent, though the state retains a relatively large role in the economy through planning and state-owned enterprises. But its political system remains authoritarian – as Richard McGregor puts in his book The Party, the Chinese state “still runs on Soviet hardware”. In fact, under Xi Jinping, it seems to be becoming more authoritarian. I wonder what George Orwell – one of my political heroes – would have made of it. It seems to me that China’s authoritarian capitalism was the exact opposite of what Orwell, who described himself as a democratic socialist, believed in.

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History and poetry

In the previous post, I referred to the idea, attributed to Mark Twain (though I’ve never been able to find a reference), that “history rhymes”. It is meant as an alternative to the idea that history simply repeats itself. Instead, it is suggested, the patterns of history are more complex than this: there are connections between past and present but they are complex and subtle rather than direct ones. The task for analysts of the present, as the historian Charles Emmerson put it in a thoughtful essay, “is to listen for those rhymes and to calibrate our hearing to catch them.” The implication is that history is somehow like poetry. It is an intriguing idea. But if one takes it seriously, it raises lots of further questions. How, exactly, does history “rhyme”? Are there rules of what we might call “historical prosody”? If history rhymes, does it also have something like metre?

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The West and the anti-West

Last month I took part in a workshop run by the Transatlantic Academy in Washington on the development of the relationship between China and Russia – and its consequences for the West. Immediately after the European Union and the United States imposed sanctions on Russia following the annexation of Crimea, President Vladimir Putin signed a series of trade deals with China, including a $400 billion deal to export Russian gas to China. Since then, the two countries have also agreed to “co-ordinate” the development of the Eurasian Economic Union and the Silk Road Economic Belt. Beyond China’s need for energy and Russia’s need to replace trade with, and investment from, Europe, the two countries also share an interest in challenging U.S. power and in creating a “multipolar world”. So should the West worry about a relationship? And if so, how should it respond?

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Germany, the east and the south (2)

In my book, The Paradox of German Power, I argued that, since the euro crisis began in 2010, EU member states seemed to have adopted a mixture of bandwagoning and balancing in relation to Germany. In particular, I suggested that the countries of central Europe, whose economies had been integrated with Germany’s since reunification, seemed to be forming “a kind of geo-economic equivalent of a German sphere of influence”. Meanwhile, the eurozone “periphery” seemed to be under pressure to form what George Soros called a “common front” against Germany. In short, the east was bandwagoning and the south balancing. However, since then, I’ve started to wonder whether perhaps I underestimated the complexity and fluidity of coalition building within the European Union. Instead of two blocs within Europe, there seems to be an even more complex and fluid dynamic of shifting coalitions.

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Parallel pasts

A few weeks ago I attended a conference in Berlin, organised by the European Council Foreign Relations (where I worked for five years), on relations between Europe and Japan. What particularly struck me as I listened to the discussions during the course of the day was the lack of common ground between the German and Japanese participants. There are striking parallels in the histories of the two countries – one in Europe, the other in Asia – that go back a century and a half. As a result, policymakers in the two countries now face similar challenges. But instead of creating a sense of empathy between participants from Germany and Japan, the history they share seemed to create tension between them. I wondered whether, because the history that the two countries share is such a difficult one, it may separate them rather than bringing them together. In other words, perhaps Germany and Japan are divided by their parallel pasts.

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Schäuble and Greece

Over the last few weeks, as Greece has edged closer to leaving the European single currency, there has been much speculation about the different positions of German Chancellor Angela Merkel and Finance Minister Wolfgang Schäuble. Schäuble, who is generally thought to be more “pro-European” than Merkel but has paradoxically taken a tougher line towards Greece, is usually said to believe the single currency can only succeed if everyone abides by the rules. Merkel, on the hand, is said to worry about more the geopolitical costs of “Grexit”, particularly in the context of Russian revisionism since the annexation of Crimea in 2014. Others speculate that the difference between the positions of Merkel and Schäuble is merely tactical: a good cop/bad cop routine in order to extract concessions from Greece.

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