At a discussion I had with Stephen Green and Quentin Peel at Chatham House recently, a member of the audience put it to me that German policy in Europe was normal for a creditor country in a debt crisis. In particular, he suggested that it was playing in a similar role in the euro crisis as the United States did in the Latin American debt crisis in the 1980s. “The thinking in Berlin is no different from the thinking in Washington during the Latin American debt crisis”, he said. It was an interesting point, which prompted me to think more about the similarities and differences between the two crises and between the role of Germany in Europe and creditor countries in other debt crises. It is also relevant to the question of the relationship between ordoliberalism and neo-liberalism, which I discussed in my previous post.
At a recent discussion with Simon Tilford of the Centre for European Reform about my new book, The Paradox of German Power, I was asked about the role of ordoliberalism in Germany’s response to the euro crisis. A couple of years ago, my colleagues Sebastian Dullien and Ulrike Guérot wrote an excellent brief for ECFR in which they argued that ordoliberalism – an economic theory that goes back to the so-called Freiburg School in the 1930s but is little known outside Germany – cast a “long shadow” over current German economic thinking. I think they’re right, but I wasn’t really able to give a good answer about exactly what role ordoliberalism plays in the German economic policy process. The more I thought about it after the discussion, however, the more it struck me that there is a parallel with the role of Ostpolitik in the German foreign policy process.
Is the European Union a utopian project? Right-wing Eurosceptics often see it as one. In her book Statecraft (2002), for example, Margaret Thatcher called the EU a “classic Utopian project, a monument to the vanity of intellectuals, a programme whose inevitable destiny is failure.” More recently, left-wing Eurosceptics such as Wolfgang Streeck have begun to describe the EU as a different kind of utopian project. In an influential book published in Germany last year (to be published in English in May as Buying Time: The Delayed Crisis of Democratic Capitalism), Streeck argues that the EU is evolving into (or perhaps revealing itself as) a kind of Hayekian utopian project – a vehicle for endless liberalisation without interference from democratic politics. But is this the right way to think of the EU? Does it really seek to make Utopia a reality?
Europeans, particularly “pro-European” Europeans like me, often make the argument that it is only by pooling their collective resources that can they compete in the emerging world of continent-sized powers such as China, India and the US. By jointly pursuing their interests, the 28 member states of the European Union – the world’s largest trading bloc – can have greater impact than any of them can have individually. In particular, this argument is often deployed to show why it would be a mistake for the UK to leave the EU: to do so would commit it to “geopolitical oblivion”, as a French official put it to me. The idea, in short, is that size matters, as Peter Mandelson put it at a dinner I attended a year or so ago. But interestingly (and perhaps slightly worryingly), this discourse about size echoes the one in Europe at the end of the nineteenth century.
A couple of weeks ago I took part in the Frankfurter Allgemeine Zeitung’s Tendenzwende conference – a small gathering in Berlin of historians, economists, constitutional lawyers and philosophers, that has been held annually since 2009. It is named after a famous academic conference held in 1974, which coined the term that is often used in Germany for the shift in the 1970s from the post-war settlement to a new phase of slow growth and high inflation after the oil shock of 1973. After the financial crisis in 2008, Andreas Rödder (a historian) and Günther Nonnenmacher (one of the five publishers of the Frankfurter Allgemeine) had the idea of holding a similar conference to discuss whether a new paradigm shift was now taking place. The big question was: what comes after neo-liberalism? This year’s conference (which took place under the Chatham House rule) was on Europe.