Germany’s unwavering ambition.

By Anthony Coughlan.

The EU establishes a post-war arena where European Nation State interests continue to work themselves out.

Take Germany for instance. That great realist Germany’s own Otto Von Bismarck once said:  “I have always found the word ‘Europe’ on the lips of those powers that wanted something from others which they dared not demand in their own names”.

The myth of origin of the European Union is that it is a peace project to prevent wars between Germany and France – as if a collective tendency to go to war were somehow genetically inherited.

Historically in fact the EU’s origins lie in war preparations. The first step towards supranational economic integration in Europe, the European Coal and Steel Community of 1951, was to facilitate German rearmament at the start of the Cold War between the USA and its allies on one side and the USSR and its allies on the other, and to reconcile France to that fact.

The USA wanted a rearmed West Germany inside NATO on its foundation in 1949. This greatly alarmed France, which had been occupied by Germany just five years before. Jean Monnet was America’s man in the affair. To assuage French fears of German rearmament Monnet drafted the Schuman Declaration proposing to put the coal and steel industries of France, Germany and Benelux under a supranational High Authority as “the first step in the federation of Europe”. The EU celebrates the anniversary of this Declaration each year as “Europe Day”.

In his memoirs French President Charles de Gaulle characterised the ambitions of the first President of the  European Commission, Walter Hallstein, for Germany and the then European Community as follows: “ I think that if in his own way  Hallstein is a sincere ‘European’, this is only because he is first of all an ambitious German. For the Europe that he would like to see would contain a framework within which his country could find once again and without cost the respectability and equality of rights that Hitler’s frenzy and defeat caused it to lose; then acquire the overwhelming weight that will follow from its economic capacity; and, finally, achieve a situation in which its quarrels concerning its boundaries and its unification will be assumed by a powerful coalition”.

Forty years later a major shift in Franco-German power, Germany’s reunification in 1991 as a side-effect of the collapse of the USSR, led the two countries to establish the European Economic and Monetary Union and its single currency, the euro.

The increase in Germany’s size and population consequent on its reunification greatly alarmed France. But France possessed nuclear weapons, which the reunification treaties debar Germany from having. The deal between the two of them, set out in the 1992 Maastricht Treaty, was EU Monetary Union for Political Union or, put crudely, the Deutschmark for the Euro-bomb! Germany would give up its national currency, the symbol of its post-war economic achievement, and share the running of a new supranational EU currency with France, while France agreed to work jointly with Germany towards a supranational EU political union with its own common foreign, security and defence policy, and in time a common EU army.

This would give Germany a central role in running a potential EU world power, with its finger eventually on a European nuclear trigger. France in turn hoped the euro would give it a political lock on Germany. A Franco-German army brigade, with joint officers and a joint command, was established simultaneously as symbol and prototype of the EU army of the future.

France and Germany are often said to share a common interest in being joint motors of the EU integration “project”. As Charles De Gaulle once remarked: “Europe is France and Germany. The rest is just the trimmings”.

But Chancellor Helmut Kohl, who pushed through the euro in face of a reluctant German public opinion, was less bifocal: “The future will belong to the Germans when we have built the House of Europe. In the next two years we will make the process of European integration irreversible. This is a really big battle, but it is worth the fight”.

Germany’s post-war political elite saw economic success as the way back to great powerdom. The Eurozone allows Germany free rein to pursue a mercantilist strategy of seeking export domination (“Export Weltmeister Deutschland”) by enjoying a significantly lower currency exchange rate with the euro than it could enjoy on its own were it to retain the Deutschemark. This is a consequence of the internal imbalances within the Eurozone whereby Germany, with its persistent trade surpluses, can avoid an upward currency revaluation and thus enjoy a stimulus to its export economy, while countries like Italy, Spain and France, with persistent trade deficits, cannot enjoy a downward currency devaluation and are thus condemned to permanent economic stagnation domestically. This grounds the Eurozone austerity regime we now live under.

In 2009 inflation-obsessed Germany amended its Constitution to adopt a balanced budget regime forbidding the Federal Government from running a structural deficit – that is, a surplus of government spending over government revenue leaving aside the cost of national debt service – of more than 0.35% of GDP in any year.  Chancellor Merkel then pushed the Stability Treaty embodying a similar rule on the rest of the Eurozone.  Irish voters adopted this by constitutional referendum in 2012.

The Stability Treaty is a constitutional ban on Keynesian-style deficit budgeting by EU governments. It means that Ireland and the other Eurozone States are legally bound to balance their budgets or run budget surpluses each year. It ordains that the maximum underlying gap between public revenue and public spending, excluding debt interest, which a national Government can have in any one year is 0.5% of GDP if its total debt is over 60% of GDP. Ireland’s national debt is currently double that. The treaty requires national debts of over 60% of GDP to be reduced by one twentieth of the excess each year.

On 1 November this year the most important power-political change to be made by the 2005 EU Constitution, now implemented by the 2009 Treaty of Lisbon, came into force. This doubles Germany’s relative voting weight in making supranational laws in the EU Council of Ministers, while simultaneously halving Ireland’s.

Until this month the four largest EU States – Germany, France. Italy and Britain – had 29 Council votes each (i.e. 8%) in making EU laws and Ireland had seven (i.e. 2%) out of a total of 345 – 255 votes being a qualified majority for adopting an EU law. The new post-Lisbon system puts EU law-making on a primarily population basis, which naturally favours the bigger States, Germany above all. Henceforth a qualified majority for making EU laws on the Council of Ministers will consist of 55% of the States – which means 15 out of the current 28 – as long as those 15 comprise 65% of the total EU population of 500 million people.

Germany’s voting weight in making EU laws will double from its pre-Lisbon 8% to 16%, because that is its proportion of the total EU population. The six largest EU States will increase their combined share of Council votes from 49% to over 70%. Ireland’s will fall from its present 2% to 0.9%.

With Germany and France between them having one-third of the EU’s population, and half the population of the Eurozone, this provision of the Lisbon Treaty gives these two States a blocking minority on any issue if they can get one or two smaller allies. It gives them a powerful say in pushing through whatever laws or policy measures they want.

What of Germany and the EU in the coming decades?

At bottom, reunified Germany no longer needs the EU in the way West Germany did when there were two German States. The euro-currency makes Germany the effective controller of the 18-member Eurozone and it helps German exporters. At the same time it stimulates anti-German feeling in the countries suffering under Berlin-backed austerity, while German citizen consumers are denied the cheaper imports, cheaper foreign holidays and cheaper foreign assets that they could buy if they reverted to the Deutschmark and no longer had to operate with an implicitly under-valued currency.  The new Alternative for Germany party points this out continually.

France is proving an economically weak partner for Germany nowadays. The alternative is Russia. Germany is an economic powerhouse that needs to import gas and oil, of which Russia has limitless amounts. A German-Russian deal has a long tradition in German history – against Napoleon in 1815; and in Bismarck’s Reinsurance Treaty of 1887, Rapallo in 1922, the Nazi-Soviet Pact in 1939. It used be said that NATO’s prime purpose in Europe was “to keep America in, Russia out and Germany down”.  The EU provided an economic basis for NATO in Europe during the Cold War, but what is NATO’s rational justification now?  Recently the USA, followed by the EU, has sought to find a new role for NATO and justify a continuing American military presence in Europe by intervening in Ukraine, imposing economic sanctions on Russia and seeking to launch a new Cold War on that country. A central issue of European politics today is how long will the EU States, Germany in particular, allow themselves to be used by the USA, Brussels and NATO in this way, against the real economic and political interests of their own peoples.

Now that America’s moment of historical supremacy has passed and mankind is moving to a more multipolar world, what is needed in Europe is moves “to get America out, Russia in and Germany up” – or at least Germany acting independently, naturally with appropriate respect for its neighbours. A German-Russian coming together is desirable to that end and is inevitable in time. That will shatter the EU, get the US out of Europe and restore the natural and realistic European order of the balance of power as the alternative to EU supranationalism.  Maintaining a balance of power is the only sensible course for the foreign policy of Europe’s States. Problems only arise when that balance is destroyed, as has occurred with Germany’s predominance in the EU. •

Anthony Coughlan is Director of the National Platform EU Research and Information Centre and is Emeritus Professor of Social Policy, Trinity College Dublin. [Nov ’14]