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.
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.
One of the things that has persistently puzzled me over the last few years is the disconnect between the Anglo-Saxon and German debates about the euro crisis. The mainstream view among Anglo-Saxon economists is broadly Keynesian: they see surpluses as a problem as well as deficits and therefore argue it is not only debtor countries that need to adjust. But the only German economists you hear making such arguments are those such as Heiner Flassbeck who are perceived as being on the far left. (Flassbeck was the state secretary in the German finance ministry during the short-lived tenure of Oskar Lafontaine at the beginning of the Schröder government. Lafontaine subsequently left the German Social Democrat party and became one of the leaders of the Linke, or Left party.) It seems as if, in this respect, Germans are to the right of the Anglo-Saxons.
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.
In an essay I wrote in 2011, I argued that Germany should no longer be thought of as a “civilian power” but rather as a “geo-economic power”. I argued that the weakening of the Federal Republic’s commitment to multilateralism during the previous decade and its increasing economic assertiveness, particularly within the eurozone, undermined its claim to be a “civilian power” – that is, one that used multilateral institutions and economic co-operation rather than military power to achieve its foreign policy goals. The concept of “civilian power” was originally used by François Duchêne to describe the European Union and was applied to the Federal Republic by Hanns W. Maull, who, in one of his first essays on the subject in the early 1990s, described Germany and Japan as “new civilian powers” – “prototypes” of “a new type of international power”. So if Germany is no longer a “civilian power”, what about Japan?
Last week I spent a few days in Helsinki, where I took part in a panel discussion about European foreign policy organised by the Finnish Institute of International Affairs. It was an interesting time to be there. The issue on everyone’s minds, just like everywhere else right now, was the Ukraine crisis and in particular the implications of the Russian annexation of Crimea last month. St. Petersburg is less than 200 miles away from Helsinki and Finland was part of the Russian empire for 108 years until it became independent in 1917. Russia still feels very present in Helsinki – for example a statue of Tsar Alexander II stands in front of the neo-classical Lutheran cathedral in the centre of the city. So during my time there, I was particularly interested to hear from officials, analysts and journalists about the complex relationship between Finland and Russia.
As Europe commemorates the 100th anniversary of the outbreak of World War I this year, a re-assessment is taking place in Germany of what is called Europe’s Urkatastrophe, or “original catastrophe” – in other words, the one that led to all the others. In particular, influenced by books such as Christopher Clark’s Sleepwalkers (published in Germany in 2013) and Herfried Münkler’s Der große Krieg (also 2013) – both best sellers in Germany – many are rejecting the once widely held idea that the war was caused above all by German aggression. A poll in January showed that only 19 percent of Germans thought Germany was chiefly responsible for the outbreak of war. It seems to me that this is part of a broader trend in collective memory and national identity in Germany since around the Millennium that I have written about previously: Germans now think of themselves less as “perpetrators” and more as “victims”.