Four Scenarios for Europe

In light of forthcoming Brexit, changes on domestic political scene, Emmanuel Macron’s plans to reshape European order and growing interdependence with economies of Visegrad Group countries, Germany has four European strategies it can choose from. In the short term, however, the only approach that can be seriously considered is… defending status quo.

This never-ending Brexit is itself a good sign of a political earthquake in Europe and the whole transatlantic world. The tectonic plates of European politics are shifting covertly and slowly, but consistently, in a still unforeseen direction. Not so long ago, in 2007, the brand new German chancellor Angela Merkel announced a new concept for a European leading triumvirate – Berlin, Paris and London. Hardly anyone could have expected then that after just a few months the global crisis of 2008 would come. France and the UK got into economic troubles. As a result, in the early ’10s we started to speak about a German Europe. In terms of Franco-German relations alone, we have quite smoothly moved from the Merkozy duo (Merkel and Sarkozy) to the aptly nicknamed Merkollande (Merkel and Hollande) or simply Merkelland, a concept that was understandable even for non-German-speaking people.

The fear of Germany’s rising power within the EU has spread across the continent. Berlin, with its hawkish monetary policy, has been facing misunderstandings and anger in many European capitals and, among southern European societies, even hatred. People on the streets of Athens perceived the incoming German officials representing the European institutions responsible for supervising the Greek government as occupiers. However, this reaction was not universal. The Central European states looked upon Germany with hope and admiration: let me recall a statement by Radosław Sikorski, the Polish MFA, that he made in Berlin in November 2011:

I fear German power less than I am beginning to fear German inactivity. You have become Europe’s indispensable nation. You may not fail to lead; not dominate, but to lead in reform. Provided that you include us in decision-making, Poland will support you.

That statement was cited in many European capitals and aroused a lot of controversy. However, the commentators did not catch the key point. I think that Sikorski, too, did not. He probably thought that German inactivity was routed in a lack of political will among the Berlin elites caused by the German post-war fear of hegemony. The truth is, Germany has been structurally unable to lead Europe. The German empire of chancellor Merkel is becoming a “paper tiger”. The symbolic breakeven point came in 2015. Firstly, Dieselgate showed that the German Exportwunder is mostly based on traditional car and machine industries that in coming years will face existential challenges. Secondly, the Chinese company Midea started the process of taking over KUKA, Germany’s world-leading robot-making enterprise. The process was finalised one year later and raised a truly serious debate about the ownership structure of German companies. In this context we should not forget the dozens of Russian investments and informal acquisitions. Finally, due to a deficit on the labour market Angela Merkel decided on Willkommenskultur and invited in almost one million migrants. This decision was taken without any consultation with either the CDU, or the SPD – their coalition partner. As a matter of fact, it has ultimately weakened the position of Ms Merkel and added political fuel to Alternative für Deutschland. At the same time, it didn’t solve the problem of the labour force shortfall – according to demographics, 2050 Germany will still be the oldest society in Europe (alongside Poland). Last autumn’s decision for Angela Merkel to resign from the leadership of the CDU party was therefore purely a direct consequence of the above-mentioned problems. The moment that Frau Kanzlerin loses her position and ability to run European politics is getting closer and closer.

Nevertheless, even in Merkel’s belle epoque she was avoiding hard decisions, though at the European level this could especially be observed after Emmanuel Macron’s victory in the presidential campaign in France. Mr Macron began from the very beginning to push chancellor Merkel to introduce some profound changes in the EU, with a structural reform of the Eurozone at the forefront. Macron intentionally postponed the presentation of his European vision to 26 September 2017, two days after the general elections in Germany. The agenda presented in his Sorbonne speech might have become the new European agenda of the newly-elected German ruling coalition. This is what Macron at least believed. This belief was not fully unjustified. The economic adviser to the SPD in the coalition negotiations was professor Henrik Enderlein from the Delors Institute, one of Macron’s trusted men. While reading the Great Coalition’s agreement, Macron’s touch might even be recognised. However, reality did not conform to the political statements and the French president’s plans. The next German–French declarations from Meseberg (June 2018) and Aachen (January 2019) led, rather, to frustration and helplessness in Paris. To cut a long story short, Angela Merkel has again and again agreed to French proposals, but for now has done nothing to turn them into a reality. The reason is quite simple – any realisation of Macron’s plan requires an abandonment of fiscal discipline (so-called schwarze Null), the last bastion of CDU’s traditional platform and an element of the German political DNA. If the Christian Democrats, who in recent years have acquired so many elements from their political rivals’ platforms (e.g. Energiewende, minimum wage, same-sex marriage, etc.), sacrifice schwarze Null, they might remove the last incentive for the electorate to vote for them.

On the other hand, since 2004 we have been witnessing a growing economic interdependence between Germany and the Visegrad Group. German industrial companies are becoming increasingly dependent on economic cooperation with Poland, Czechia, Slovakia and Hungary. In the last year, the volume of trade between Germany and V4 countries reached almost 300 billion EUR and was 50% higher than trade between Germany and its biggest trading partner, China. Poland itself jumped into the group of five biggest trading partners. Even if the new German economic strategy that was launched in February 2019 calls for the establishment of the so-called European champions and in fact supports fostering of the French–German cooperation, representatives of German industry will not agree to any decision that might harm their Visegrad counter partners. This simple fact might explain why in recent years Berlin has, despite the dispute over the rule of law, invested so much diplomatic effort into building bridges with Warsaw. However, it should be mentioned that due to the narrative of the Polish government on the one hand and the German investment in the Nordstream 2 project on the other, Polish–German political relations are as deadlocked now as they were then. Nevertheless, it is no secret that, so far, no single party in the German Bundestag Berlin has had a real political interest in changing it.

Therefore, although the forthcoming changing of the political guard in Germany is being carefully watched by observers all over the Europe, it is drawing special attention in Paris and Warsaw. After Brexit, which will eventually come to pass at the end of January 2020, Berlin has theoretically four basic European strategies. It can choose Macron’s vision and sacrifice close cooperation with Central European partners, who will be pushed out from the first circle of European integration (strategy no. 1). At the same time, this might mean a final transatlantic split. They can also do the opposite – choose V4 as a substitute for the UK in counterbalancing the rising expectations of France and the whole European south (strategy no. 2). This strategy might also be considered as the establishment of a new political division of Europe – not east–west, but north–south. Such a scenario without Poland is rather unlikely to happen – the Nordic states are politically too weak. A new European triumvirate based on the Weimar triangle is the next hypothetical option (strategy no. 3). However, it requires a profound revision of political, economic and security issues in both France and Poland (e.g. Poland will have to join the Eurozone and change its attitude towards the US). Finally, Berlin might decide to follow the well-known and so far safe, but totally ineffective strategy of defending the status quo (strategy no. 4).

Even a simple analysis of the German political scene leads us to assume that at this very moment only strategy no. 4 can be seriously considered. In fact, it is negative for the whole EU because, in the longer run, the status quo will lead to still hard-to-predict disintegration processes in Europe. However, and hopefully from the perspective of V4, the political situation not only in Germany, but also at the European and global level, is so dynamic that even the less likely scenarios should be taken into account. We believe that initiatives such as V4-Germany Round Table  might shine new light on the future of European integration.