September 15, 2010


Germany goes global: farewell, Europe: The great engine both of Europe’s economic strength and its political unity is falling out of love with its creation. The challenge to the continent is profound (Ulrike Guérot, 9/14/10, OpenDemocracy)

The huge gap between what other countries expect Germany to do and what Germany is ready to do has left its mark. But it looks now as if the real autumn scenario will be different from the anticipated one. There are three reasons for this.

The first is a change in the economic weather. Germany at least is in full recovery mode. The annualised growth-rate is back to 3%, in comparison to 2.2% in the first quarter of 2010 (and Deutsche Bank even forecasts 3.5% for the year); this would be the highest rate since German reunification in 1990, and is already enough for some local hyberbole (the press entitled the moment the “up-turn XL” [Aufschwung XL], and economy minister Rainer Brüderle referred to “a second German economic miracle”.

The job-creation and unemployment figures are also hopeful: the number of unemployed people is predicted to remain below 3 million for the rest of the year, which would be the lowest figure for a decade. Germany’s famous exports are strong, especially of the automobile industry (Volkswagen alone sold 4 million in May 2010). The overall figures for June 2010, at €86.5 billion ($110bn), were an increase of 28.8% over June 2009; and exports for the first half of 2010 are 11%-12% up. German-Chinese and German-Russian trade and export figures are as good as ever.

These figures have dissipated the fear of another financial meltdown. The mood in Germany is already post-crisis - to the extent that people take pride in German economic instruments such as Kurzarbeit, and even wonder if the crisis ever really shook the country.

The second reason is a change in the political weather. The economic recovery has ended the speculations about the end of Angela Merkel’s government. The defeat of the Christian Democrat Union (CDU)-Free Democrat Party (FDP) coalition in the North-Rhine-Westphalia regional elections on 9 May 2010, and its poor performance over the election of a successor to Horst Köhler as the country’s new president (with Merkel’s favoured candidate, Christian Wulff, needing three election-rounds finally to be elected on 30 June), created widespread doubts over the government’s ability to lead and even survive. The criticism of Angela Merkel herself also increased. That moment too has passed.

The third reason is a new clarity about German national ambitions or at least the perception that they exist. At best, it became a little clearer that Germany has no ambitions at all to lead the European Union any longer; but that, as much as any other state, it seeks to benefit from its international links without caring overmuch about European politics. The New York Times has even characterised Germany’s real aim as to become a great Switzerland: wealthy and not politically responsible for Europe.

This combination of economic revival and international clarity confirms that there is indeed, no German national “masterplan” - but there is a definite tendency towards what might be called “going global alone”. This leaves other European countries with a key choice - which is no longer a German problem, as many in Germany think that ultimately Germany can do its own business in the world. To be sure, this is more a policy by default than a strategic vision; and if it is probably good for Germany, it is not necessarily so for Europe. In short: Germany is outgrowing Europe!

The implication of this shift is that Germany is replacing foreign policy - including European - by trade policy.

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Posted by Orrin Judd at September 15, 2010 5:24 AM
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