© REUTERS/Yves Herman

During the last few years, there has been much discussion about “European sovereignty.” In particular, the concept is associated with French President Emmanuel Macron, who, as early as in his 2017 Sorbonne speech, has made it central to his own vision for Europe and its role in the world. Other leading “pro-European” figures have also embraced the concept—in particular after the Trump administration abandoned the nuclear agreement with Iran and imposed new sanctions that would affect European companies that continue to do business in Iran. In 2018 European Commission President Jean-Claude Juncker even entitled his State of the Union speech “The hour of European sovereignty,” and German Chancellor Angela Merkel demanded “greater strategic sovereignty” for the EU as recently as May 13.

However, although the concept is now widely used, it is far from clear what it means. It is often just another term for a strong, united Europe or the vague idea that Europe must “take its destiny into its own hands.” It tends to be used almost interchangeably with “strategic autonomy,” though sometimes with a greater focus on economic power rather than just military power. Given the lack of clarity about what “European sovereignty” means, it is tempting to simply ignore the concept. But the way it has been used in the last few years actually tells us a lot about “pro-European” thinking and illustrates some of the problems with it—in particular in debates about European foreign policy.

Historically, “pro-Europeans” tended to be anti- or post-sovereigntist—that is, they saw “sovereignty” as an anachronistic and dangerous concept—and were always slightly dismissive of other “sovereigntist” powers. In particular, of course, it was national sovereignty that those considered “pro-Europeans” opposed. They have had a tendency to think concepts that are problematic at the national level are somehow unproblematic at the European level. But until recently most “pro-Europeans” would have also seen the idea of “European sovereignty” as problematic—the whole point of the European project was to move not just beyond national sovereignty but also beyond the concept of sovereignty altogether.

Remaking the World in Europe’s Image

What “pro-Europeans” wanted was to transform international politics by moving beyond a world of power politics to one based on the rule of law—and central to this was a rethink of what sovereignty meant. “Until the European Union was created, the idea of statehood, of being ‘sovereign,’ meant independence from external intervention, maintaining your secrecy, keeping other countries at bay,” wrote Mark Leonard in his 2005 book Why Europe will run the 21st Century. But, he went on, after World War II Europeans had embraced interdependence instead of independence. “Instead of jealously guarding their sovereignty from external interference, Europeans have turned mutual interference and surveillance into the basis of their security.”

For “pro-Europeans” like Leonard, the EU was a kind of blueprint for global governance. They believed that the whole world should become like Europe. Reflecting a somewhat deterministic current in “pro-European” thinking, many saw a kind of inevitability in this remaking of the world in the image of Europe. The inexorable logic of interdependence undermined sovereignty and necessitated transnational governance structures like the EU. Thus the rest of world would eventually catch up with the radical post-sovereigntist vision on which the EU was based. The whole world would eventually pool and share sovereignty among themselves just as Europeans had done, and something like the EU would become a kind of world government.

The idea of “European sovereignty” is a manifestation of the way that “pro-Europeans” have essentially given up on this idea—at least for now. After the series of crises the EU has faced over the last decade, beginning with the eurocrisis in 2010, the idea the EU is a model looks much less compelling than it did in the mid-2000s. Meanwhile, in the context of the rise of China, Russian revisionism, and uncertainty about the commitment of the United States to Europe, the continent feels much more alone and threatened than it did back then. Instead of a transformation of international politics, there has been a transformation of “pro-European” thinking. “Pro-Europeans” no longer see the EU as a model, but as a competitor—that is, as a power that has to compete with others. In order to do so, they say, it needs “sovereignty.”

Only Big Is Truly Sovereign

The idea of “European sovereignty” is based on a distinction between two definitions of sovereignty in international politics: a narrow, legal definition and a wider, strategic definition. In the narrow sense—the conventional definition—all states are sovereign. It is in this legal sense that it is a violation of sovereignty when one country invades another without a mandate from the United Nations Security Council—for example, when the United States invaded Iraq, or Russia invaded Ukraine and annexed Crimea. But when the concept of sovereignty is used in this conventional sense, the secondary impact of US sanctions is hardly a “massive assault” on the sovereignty of Europe, as former Swedish foreign minister Carl Bildt claimed. It is simply one power using the size of its market to pursue its interests.

However, there has long been a sense in “pro-European” thinking that this kind of sovereignty is a kind of illusion. A state may legally be able to make its own laws, but is in practice unable to resist the pressures of international politics. In particular, “pro-Europeans” have long argued that small states are not really sovereign, even though they may possess sovereignty in the legal sense. The only way to be truly sovereign, they argued, is to be big. Thus European integration did not really undermine the national sovereignty of EU member states. “The choice is not between national and European sovereignty,” wrote Jean Pisani-Ferry, a former advisor to Macron, in December 2019. “It is between European sovereignty and none at all.”

This wider definition clearly reflects an aspiration or even an expectation among many Europeans that they should be as powerful as China and the United States—a kind of third pole in a multipolar world. This is why the concept of “European sovereignty” gained momentum following the US withdrawal from the Iran nuclear deal and the imposition of sanctions that could impact European companies. The concept expresses the sense that the EU ought to be able to stand up to great powers like China and the US—indeed, that the EU ought to itself be a great power, as opposed to the “normative power” it once aspired to be.

A Question of Power?

However, this wider concept of sovereignty tends to collapse into the concept of power—to be sovereign is simply to be powerful. It also sets a very high threshold for sovereignty. If that threshold lies above the level of power that big European states like Germany, France and the United Kingdom have on their own, as many “pro-Europeans” argue, it means that only a handful of the world’s 195 states are sovereign. Clearly, the US and China are sovereign, and perhaps India and Russia. But it is not even clear whether Japan—a country of 125 million people with one of the biggest economies and most advanced militaries in the world—is sovereign. Is this really a meaningful definition of sovereignty?

Moreover, if sovereignty is a function of size, and Europe is going to become sovereign in this wider sense and will therefore be able to protect itself from “violations” of sovereignty like the secondary impact of US sanctions, then European sovereignty will  “violate” the sovereignty of other smaller states. The EU has long been able to impose its will on states in its neighborhood—for example, it has reshaped accession countries through conditionality. If one understands sovereignty in the narrower sense, this is again just one power using the size of its market to pursue its interests. But if one understands sovereignty in the wider, strategic sense, it must surely be a “violation” of sovereignty analogous to US sanctions.

Of course, few “pro-Europeans” would accept this. Advocates of the idea “European sovereignty” tend to alternate between the two definitions of sovereignty based on what suits them best. When it comes to the EU’s interactions with its neighborhood, in particular accession countries or countries that are part of the European Neighborhood Policy—in other words: weaker powers—they use the narrower, legal definition of sovereignty. But when it comes to the EU’s relations with great powers like China and the United States—in other words: stronger powers—they use the wider, strategic definition of sovereignty. In short, “pro-Europeans” want to have it both ways.

Who’s the Sovereign?

There is also an even deeper problem with the idea of “European sovereignty.” So far we have been discussing the international political dimension of the concept of sovereignty, that is, questions of power in international politics. But there is also a domestic political dimension of the concept of sovereignty, which concerns the question of who has power within states. This dimension is entirely missing from discussions around “European sovereignty.” “Pro-Europeans” want Europe as a whole to be powerful relative to other powers. But the concept of “European sovereignty” says very little about power within Europe. In other words, who exactly is sovereign in a sovereign Europe?

The concept of “European sovereignty” focuses on state sovereignty—or perhaps quasi-state sovereignty, since the EU is not actually a state—rather than popular sovereignty. The concept is being driven by foreign-policy elites who want Europe to be handlungsfähig, or capable of acting, and therefore want to increase the power of a European executive. However, there is little discussion of the legitimacy of this executive power, little discussion of whether it expresses the will of the people of Europe. In fact, the European people are almost completely missing from the debate about “European sovereignty.” Do they actually want “European sovereignty”?

The Lisbon Treaty is a good example of this. It was a major step forward in empowering a European executive to pursue a more coherent, effective foreign policy—to act strategically. In particular, it created a European foreign minister (the “high representative”) and a diplomatic service that “pro-Europeans” hoped would enable the EU to pursue a more coherent and effective foreign policy. The Lisbon Treaty was welcomed by the “pro-European” foreign policy establishment. But it was essentially a repackaged form of the European Constitution that was rejected by Dutch and French voters in 2005 and was thus deeply problematic in democratic terms. It remains far from clear that even these steps toward a more strategic—or “sovereign” —Europe had the support of the people of Europe.

Countervailing Pressures

When one compares the debate in continental Europe about “European sovereignty” with the parallel debate in the United Kingdom in the last four years since the June 2016 referendum, this absence of the domestic dimension of sovereignty is particularly striking. The British debate has been almost entirely about popular sovereignty and what it means. Indeed, part of the reason why many “pro-Europeans” and Remainers, particularly among foreign policy elites, are so frustrated about Brexit and the debate around it is that questions around British power in the world have been so marginal to it. In focusing on questions of popular sovereignty, Britain seems to them to have abandoned its traditional strategic thinking.

What the existence of these two debates—one about (quasi-)state sovereignty and the other about popular sovereignty—illustrates is that there are two countervailing pressures on European countries today. There is a top-down pressure, which is pushing Europeans toward forming a bigger unit—and it is this pressure that motivates those who call for “European sovereignty.” But there is also a bottom-up pressure, which is pushing Europeans toward smaller units. Ultimately, Europeans need to reconcile the two. In other words, the questions around European power that foreign policy analysts debate must be linked much more closely to debates about democracy in the EU.

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The German question seems to be back yet again. With speculation about the end of the Atlantic alliance and the liberal international order, there are renewed fears of German dominance at the heart of Europe.

German power now takes a different form than in the past. While before 1945, the German question was geopolitical, the current German question is geo-economic, as I outlined in my book The Paradox of German Power. But things have changed since it was published in 2015—in particular with the election of Donald Trump as president of the United States. In a recent thought-provoking essay in Foreign Affairs, Robert Kagan suggests that we should now be less certain that Germany will remain “benign” in geopolitical terms. In other words, for Kagan, the old German question is back.

However, this underestimates the deep cultural change in Germany since World War II. It’s hard to imagine any circumstances that would lead to the country reverting to an old-fashioned kind of German nationalism and militarism. The commitment of ordinary Germans to the idea of peace is simply too strong. For better or worse, this is the lesson that Germans have drawn from their experience in the 20th century.

Moreover, focusing on a remilitarization of Germany actually obscures a more likely—and interesting—possibility. If the United States were to actually withdraw its security guarantee to Europe, or if the liberal international order were to completely collapse, Germany might defy the expectations of realist international relations theorists and simply choose to be insecure rather than abandon its identity as a Friedensmacht, or “force for peace.” In other words, even in this worst-case scenario, Germany might in effect do nothing rather than either develop its own military capabilities, including nuclear weapons, or exchange dependence on the US for its security for a new dependence on France.

How Germany Harms the EU

Meanwhile, those, particularly Americans, who warn about the danger of the return of the old German question underestimate how problematic today’s Germany already is in the European context. Germany’s semi-hegemonic position within Europe is one of the main reasons why the EU has struggled to solve the series of crises that began with the euro crisis in 2010. On the one hand, Germany lacks the resources to solve problems in the way a hegemon would. On the other, it is powerful enough that it no longer feels the need to make concessions to other EU member states, and in particular to France. As a result, the EU has become dysfunctional.

It’s important not to idealize post-war Germany as acting selflessly. German politicians certainly look out for German interests in Europe. In fact, since the beginning of the euro crisis, much of the debate about Germany’s role in Europe has centered on exactly this question of the relationship between Germany’s national interest and the wider European interest. From economic policy and the management of the single currency itself to the refugee crisis and the Nord Stream 2 gas pipeline, Germany has again and again been accused of putting its own national interest ahead of the interests of Europe as a whole.

Nor has Germany exactly rejected nationalism altogether. Although—or perhaps because—Germans rejected militarism, they found new sources of national pride. In particular, a kind of economic nationalism developed in Germany and increasingly focused on Germany’s success as an exporter—what I have called “export nationalism.” During the Obama administration—long before Trump “targeted” Germany, as Kagan puts it, for its huge, persistent current account surplus—the US treasury had already put Germany on a currency-manipulation monitoring list.

Restoring the Franco-German Balance

Today, the dire state of trans-Atlantic relations and the threat of the withdrawal of the US security guarantee have raised concerns about how Germany might respond. Historically, American power has pacified Europe—that is, it “muted old conflicts in Europe and created the conditions for cooperation,” as Josef Joffe wrote in 1984. There are therefore good reasons to worry that a withdrawal of the security guarantee could lead to European disintegration and even the reactivation of security dilemmas. Yet a US withdrawal could also help to resolve the German question in its current, geoeconomic form—without necessarily re-opening the classical, geopolitical German question.

This is because Germany’s semi-hegemonic position in Europe is dependent on the configuration of the US-led liberal international order, and the particular form it took in Europe, that allowed Germany to “free ride.” In particular, the US security guarantee meant that Germany didn’t need France’s military capabilities and therefore had little incentive to make concessions to France on other issues like the euro. Whatever Trump’s intentions, his threat to withdraw the US security guarantee has given France greater leverage over Germany and thus gone some way to restoring what Harvard’s Stanley Hoffman called “the balance of imbalances” between the two countries. If the United States were actually to withdraw its security guarantee, it would further restore this balance and could mean the end of German semi-hegemony.

Power Politics Persists

In particular, increased German dependence on France for security might—and I emphasize might—force Germany to make concessions to France on other issues like economic policy and the euro, which would be good not just for France, but for Europe as a whole. In this way the removal of the US security guarantee could potentially enable Europe to finally deal with the crisis that began in 2010. The crucial question, however, is whether even this dramatic scenario would be enough to force Germany to rethink its approach to economic policy and the euro. It’s also perfectly possible that Germans would still not feel sufficiently threatened to make concessions to France on these issues as a quid pro quo for a more explicit or extensive French commitment to German or European security.

There is a tendency at the moment to view the world in extraordinarily binary terms. But the situation in Europe today is much more complex. While commentators like Kagan worry that a collapse of the current order would lead to a return of power politics within Europe, in reality power politics never really went away, even if it was no longer pursued using military tools. Within the peaceful, institutionalized context of the EU, member states continued to pursue their own national interests. In short, Europe may not have been quite the Kantian paradise that Kagan famously suggested it was in Of Paradise and Power.

Similarly, since the beginning of the euro crisis, it has become apparent that the Atlantic alliance and European integration did not resolve the German question quite as conclusively as was once thought. Given the ongoing reality of power politics within the EU, the unequal distribution of power among member states continued to matter, though that power was largely economic rather than military. After reunification and enlargement increased German power within Europe, a familiar dynamic emerged—though it only really became apparent after the beginning of the euro crisis. In other words, in resolving one version of the German question, the EU and the United States may have simply created another.

The post Red Herring & Black Swan: Is the German Question Back? appeared first on Berlin Policy Journal - Blog.

© REUTERS/Jim Young

The third chapter of The World As It Is, the memoir by Barack Obama’s former speechwriter Ben Rhodes, is entitled “A Community of Fate.” The title refers to a phrase that Rhodes proposed to include in Obama’s speech in Berlin in July 2008, but removed at the last minute. Rhodes had hoped the speech would be comparable to the famous addresses delivered by John F. Kennedy and Ronald Reagan in Berlin during the Cold War. Rhodes’s speechwriter colleague Jon Favreau had been reading a book about the Berlin airlift. In it, a German woman who experienced American “candy bombers” air dropping supplies into West Berlin said of Germany and the United States: “We are a community of fate!”

Rhodes loved the phrase “community of fate,” which he felt “echoed” the Obama campaign’s message—and JFK—and planned to use it to end the speech. Obama loved it too—in fact, Rhodes writes, it was “the one thing in the speech Obama loved the first time he read it.” Obama was even meant to try to say the original German word—Schicksalsgemeinschaft—with the help of phonetic spelling, just as JFK had said “Ich bin ein Berliner” in German in Berlin in 1963.

However, just before the speech was to be delivered at the Victory Column, Rhodes was told by a German who was translating the speech on behalf of the Obama campaign that “Eine Schicksalsgemeinschaft” was the title of one of Hitler’s first speeches to the Reichstag. Rhodes immediately pulled the phrase and considered it a lucky escape. “How had I gotten so close to such a huge mistake?” he asks himself in the book. When he told Obama why they needed to drop the phrase, Obama joked about the headlines they might have got: “Obama echoes Hitler in Berlin speech.”

The implication of the story Rhodes tell in The World As It Is is that Schicksalsgemeinschaft is one of the many German words that has been contaminated by the Nazis. Yet the word is used all the time in debates in Germany—particularly in the context of the European Union. Chancellor Angela Merkel and former Finance Minister Wolfgang Schäuble have frequently talked about the EU and the eurozone as a Schicksalsgemeinschaft. So what’s going on here? Would going ahead and using the phrase “community of fate” really have been such a huge mistake as Rhodes concluded?

All In it Together

The word Schicksalsgemeinschaft expresses the idea that a particular group of people shares a common fate. Originally, it was used to describe coal miners, hostages, or the survivors of a shipwreck—in other words, groups of people that shared the possibility or experience of a disaster of some kind. But has also been applied to political communities. Put simply, it expresses the idea that we—whoever that is—are all in it together.

The Nazis used the phrase mainly in the context of the nation—Germany as a community of fate. If anything, it’s this application of the term in a national context rather than the term itself that the German political establishment seems to have rejected. the implication being that it’s not so much the concept of a “community of fate” that is problematic, but rather the idea of nation as an exclusive political community.

Yet the term is still sometimes used even in the national context without apparent consequences for the user. For example, in 2006, Christian Democrat parliamentary group leader Volker Kauder said in an interview: “Wer Deutscher werden will, muss sich auch zur deutschen Schicksalsgemeinschaft und damit zur deutschen Geschichte bekennen.” (“Anyone who wants to become German must also commit to the German community of fate and with it to German history.”) The interview was controversial not so much because of Kauder’s use of the word Schicksalsgemeinschaft but because of his use of the concept of Leitkultur—a difficult-to-translate term that suggests a monocultural vision of German society.

Rhodes was planning to describe Germany and the United States—and by implication the West—as a “community of fate.” In other words, he was planning to use the term in exactly the kind of international or transnational context that seems to be completely acceptable in Germany. It seems that he needn’t have been so worried.

However, the confusion about the term raises the question: when, exactly, should be acceptable to speak of a “community of fate” at all? There is a tendency in Europe, and in particular in Germany, to believe that the application of a concept at the European level somehow immunizes it from the problems it poses at the national level. It seems there is some feature of the European project that somehow transforms a problematic concept into an unproblematic one, but this is rarely made explicit, let alone explained. So if it is unacceptable to describe Germany as a “community of fate,” why is it acceptable to describe Europe as one?

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© REUTERS/Francois Lenoir

Pro-Europeans” in Brussels and elsewhere tend to think of European integration in a somewhat linear way: Integration is good, and disintegration is bad. So they also see the European Commission’s proposal to create a common finance minister and budget and turn the European Stability Mechanism into a European Monetary Fund as a step forward.

There are two quite different ways of thinking about the Commission’s proposals, however. For Macron, they are part of a vision for a “Europe qui protege” (Europe that protects) with greater solidarity between citizens and member states. In this context, the new European Monetary Fund would be a kind of embryonic treasury for the eurozone. But many in Germany, including former finance minister Wolfgang Schäuble, seem to support the same idea for entirely different reasons. They see it as a way to increase control over EU member states’ budgets and more strictly enforce the eurozone’s fiscal rules, thus increasing European competitiveness. If that vision were to prevail, more Europe would mean more Germany―as in many of the steps already taken in the last seven years since the euro crisis began.

These different visions illustrate how deepening European integration is not automatically or inherently a good thing. In fact, turning the ESM into a European Monetary Fund may be part of a troubling transformation of the EU that was rooted in the euro crisis. Although integration has continued since then and EU member states have agreed to pool sovereignty in ways that would have been almost unthinkable otherwise, there are reasons to think that this integration is qualitatively different from previous phases of the European project. In the name of more Europe, it may well be that a very different EU will emerge.

Mirroring the IMF

As well as becoming more German, the EU has also grown more coercive since the beginning of the euro crisis in 2010: Further integration has fallen somewhere on the spectrum between voluntary and forced. As Chancellor Angela Merkel put it during the debate over the first Greek bailout in 2010: “There is no alternative.” Instead, Brussels has put in place a more domineering system of rules and enforcement of those rules―particularly in the eurozone. The “Maastricht III” system that emerged from the crisis is based on the series of measures taken since 2010; it is more intrusive and imposes stricter conditionality and greater homogeneity than its two predecessors.

It is particularly striking how, in the process of taking these measures, terms such as “budgetary surveillance” and “fiscal discipline” have become increasingly central to the functioning of the EU. As one typical German finance ministry document proudly put it: “European countries have created a powerful fiscal surveillance system by introducing the enhanced Stability and Growth Pact, the fiscal compact and the European semester. The new system will improve budgetary discipline in the individual countries and help to ensure that public finances remain healthy.” Following the European summit in December 2011 at which the fiscal compact was agreed, the late journalist Ian Traynor―hardly a euroskeptic―wrote that what was emerging from the euro crisis was “a joyless union of penalties, punishments, disciplines and seething resentments.”

Developments since then have only confirmed and advanced this transformation. The emergency summit held in Brussels in July 2015 to discuss the Greek debt situation may turn out to be a critical juncture in the history of the EU. Just before the summit, Wolfgang Schäuble proposed to place €50 billion of Greek assets in a trust in Luxembourg before being privatized, and to temporarily eject Greece from the eurozone if it did not agree to the creditors’ terms. Greece eventually capitulated and received another bailout. But Brussels’ heavy-handed approach may have had a transformative effect on the EU.

The use of conditionality is a central part of that transformation. Conditionality, or attaching conditions to benefits, was originally used in the context of the accession process. EU member states that wanted to adopt the euro were also subject to conditionality through the Maastricht Treaty and the Stability and Growth Pact. After the euro crisis began, internal conditionality on eurozone countries was tightened, but it still seemed softer than “external conditionality” because threats against EU member states lacked credibility. That changed, however, with the threat to eject Greece from the euro in July 2015.

This increased use of internal conditionality has transformed the meaning of solidarity within the EU. During the euro crisis, debtor countries demanded solidarity but felt abandoned when creditor countries resisted further debt relief. Meanwhile creditor countries felt they had shown solidarity by agreeing to bailouts in the first place. The truth lies somewhere in the middle: There has indeed been some solidarity in the eurozone since the crisis began, but it is the kind of solidarity that the International Monetary Fund (IMF) preaches―that is, loans in exchange for structural reform. This is not how solidarity was previously understood in the EU.

It is as if the EU is in the process of being remade in the image of the IMF. It increasingly seems to be a vehicle for imposing market discipline on member states—something quite different from the project that the founding fathers and indeed today’s “pro-Europeans” envisioned. In discussions about debt relief for crisis countries, the European Commission has often been even more unyielding than the IMF. As Luigi Zingales put it in July 2015: “If Europe is nothing but a bad version of the IMF, what is left of the European integration project?”

The Core and the Peripheries

The tough approach to member states is also being applied in other policy areas. When central European partners resisted pressure from Germany and the European Commission to accept a mandatory quota of asylum seekers in the autumn of 2015, then-German Interior Minister Thomas de Maizière threatened to cut EU cohesion funds. There is also now discussion of using the same approach to punish Hungary and Poland for violations of EU norms on democracy and the rule of law; when the rules governing structural and investment funds are revised ahead of the next budget cycle, it is likely they will include what Budget Commissioner Günther Oettinger has called “reinforced conditionality.”

It may well be that this approach is necessary―again, there appears to be no alternative. It is even easier to make the case for applying tough conditionality on respecting the rule of law because one can argue that it is being done in the name of European values. But it is nevertheless part of a wider trend of expanding coercion in the EU. The prospect of conditionality has sparked resentment in eastern European member states. Even EU member states, who worry about democratic deconsolidation in countries like Hungary and Poland wonder if it could also be turned on them.

Conditionality here is particularly problematic because of the political dynamic. Whether in the case of eurozone or refugee policy or the rule of law, it is a “core” Europe that is using conditionality to discipline a “periphery.” In the case of the eurozone, the periphery consists of the debtor countries. In the case of refugee policy and the rule of law, the periphery is represented by central and eastern European countries that joined the EU in 2004. In each case, however, Germany is at the heart of the core. And the danger is that the EU is increasingly seen as a vehicle for the imposition of German preferences.

Many “pro-Europeans” still think of the core as a continuation of the idea of a “Kerneuropa” that goes back to the 1994 paper published by Wolfgang Schäuble and Karl Lamers. At a time when the EU still had only twelve member states, Schäuble and Lamers argued that some should be able to move ahead with integration even if others were unwilling to do so. Member states such as Denmark and the United Kingdom, which had negotiated opt-outs on various issues, would be outside this core of a multi-speed Europe. But Schäuble and Lamers hoped that the core would act as a kind of magnet, and other member states would eventually follow.

However, a different core has emerged. In the case of the eurozone, it consists not of countries prepared to go furthest in terms of integration but rather of creditor countries within the eurozone, including Finland, Germany, and the Netherlands. Meanwhile, the debtor countries within the eurozone are now commonly referred to as the periphery―a term that, until the crisis began, was mostly used to describe countries that were located on the geographic edges of the EU. In this new Europe where the core is based on competitiveness rather than willingness to integrate, Italy – a founding member and, at least until the crisis began, one of the most “pro-European”―is part of the periphery.

A Competitive Europe

Chancellor Merkel embodies this transformation of the EU more than any other European leader―and has done more than anyone else to make the case for it. She has spoken repeatedly of making Europe competitive economically, and perhaps also geopolitically, with other regions in the world. But in the process, “pro-Europeans” are now increasingly thinking of the EU in terms of competition. Supporters of this approach will argue that in order to be a model, the EU needs to be competitive. But in order to become competitive, the EU may be hollowing out the values it once represented.

In particular, Merkel believes that Europe needs to revisit its spending habits: She likes to say that Europe has seven percent of the world’s population, 25 percent of its GDP and 50 percent of its social spending, suggesting that “it cannot continue to be so generous.” This logic is behind the imposition of harsh austerity measures on crisis countries. However, this competitive Europe bears little resemblance to the one “pro-Europeans” imagined, with their emphasis on the social market economy.

Perhaps the most striking―and disturbing―image for the new, emerging EU comes from Mark Leonard’s book, Why Europe Will Run the 21st Century. In it, he evokes the Panopticon―a circular building and system of control designed by Jeremy Bentham―as a metaphor for the EU. The idea was to illustrate how the EU used power in such an efficient way that rules ultimately become internalized. But the idea of the EU as panopticon may turn out to have been prescient in a somewhat darker sense. What seems now to be emerging is not so much a “Europe qui protege” as―to quote Michel Foucault―a “Europe qui surveille et punit.”

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Germany has been flexing its economic muscle while remaining deeply reluctant to use military force – acting as a “geo-economic power”. The response to Russian aggression in Ukraine has not changed that.

© REUTERS/Mikhail Klimentyev/RIA Novosti/Kremlin

Since the Ukraine crisis, many observers have perceived a dramatic change in German foreign policy. According to some analysts, Germany has even rediscovered “geopolitics”. Even if there had been a “primacy of economics” in German foreign policy before the Ukraine crisis, that had been a temporary aberration, and the “primacy of politics” had now been restored. That in turn showed that Germany was not really a “geo-economic power”, as I argued for the first time in an essay that appeared in the Washington Quarterly exactly five years ago.^[1] I had “improperly extrapolated from the foreign policy of Chancellor Angela Merkel’s CDU-FDP coalition government between 2009 and 2013,” as Hanns W. Maull put it at a discussion at the German Council on Foreign Relations (DGAP) in Berlin in February 2015. But is it really that simple? Or could it be that Germany is still a “geo-economic power” after all?

First of all, it is worth recalling why I tried in that first essay in the summer of 2011 – in the middle of the acute phase of the euro crisis and shortly after Germany had abstained in the United Nations Security Council on a vote on military intervention in Libya – to find a new concept to describe Germany as an actor in international politics. Before reunification, and even in the first decade after it, the Federal Republic had come closer than any other state (apart, perhaps, from Japan) to the ideal typical role of a “civilian power” that Maull had described in 1990.^[2] But in the context of the changes in German foreign policy after 2000, this concept no longer seemed to capture Germany as an actor. Yet at the same time, Germany was a long way away from becoming a classical great power with a “normal” attitude toward the use of military force, as some realist theorists such as John Mearsheimer had feared it would after the end of the Cold War.^[3]

Whether or not Germany is still a “geo-economic power” depends crucially on how exactly one understands that term. It was not entirely clear in that essay in 2011, because I did not distinguish sufficiently between two meanings of the concept. A “geo-economic power” in what might be called a “hard” sense is one that uses economic means to pursue strategic objectives. This is the definition that Edward Luttwak had in mind when he coined the term “geo-economics”.^[4] A “geo-economic power” in what might be called a “soft” sense, on the other hand, is one that simply pursues economic objectives. The contrast between a “primacy of economics” and a “primacy of politics” is based on this second definition – it is about the ends rather than means.

Imposing Preferences

It seemed to me that, even before the Ukraine crisis, Germany was already acting as a “geo-economic power” in a “hard” sense within Europe because it was willing to use its economic power to impose its preferences on other eurozone countries, particularly since the crisis that began in 2010. In particular, with the help of financial markets, Germany had used strict conditionality in order to force countries of the so-called periphery to implement structural reforms. But beyond Europe, it had seemed to pursue economic rather than strategic objectives – in other words, it seemed to be a “geo-economic power” in a “soft” sense. In my essay, I wanted to explore this unusual mixture of economic assertiveness within Europe and military abstinence beyond Europe, which was particularly striking after the abstention on Libya in the UN Security Council in the spring of 2011.

German policy toward Russia has certainly changed since the Ukraine crisis began. Going back to SPD Chancellor Gerhard Schröder’s time in office, Russia had been the paradigmatic case of a tendency in German foreign policy to pursue economic objectives beyond Europe. But after the annexation of Crimea, Chancellor Merkel was prepared to overrule large sections of the German business community and impose tough sanctions against Russia. Thus Germany’s subordinated its extensive economic interests in Russia to the strategic interest of protecting the European security order, now under threat from Russian revisionism. In other words, Germany’s response to the Ukraine crisis seemed to suggest it was re-prioritizing strategic objectives over economic ones.

It is not yet clear whether Germany has the stamina for this new, tough strategy toward Russia. Could it be that my critics are themselves extrapolating from the current moment in German foreign policy? What will happen, for example, when Merkel is no longer chancellor? Moreover, the new toughness of German Russia policy is based almost exclusively on economic means. While Merkel supported sanctions against Russia, she blocked various other attempts to use military means as part of a new strategy of containment against Russia. For example, ahead of the NATO summit in Wales at the beginning of September 2014, Berlin opposed plans to create a permanent presence in Central and Eastern Europe. In February 2015, when a debate started in the United States about providing direct military assistance to Ukraine and reports suggested that the Obama administration was taking a “fresh look” at the issue, Merkel immediately and publicly opposed it.^[5] To be clear, the point here is not whether German policy was right or not, but that even after the Ukraine crisis, Germany continued to be very reluctant to use military means.

Maintenance, Not Expansion

The strategic shock of the Ukraine crisis did lead to a new focus on defense policy, but it is not yet clear what its outcome will be. In January 2016 Defense Minister Ursula von der Leyen asked for an investment of €130 billion in defense equipment over the next 15 years. Even if this sum is actually approved, defense spending as a proportion of GDP will not significantly increase, let alone reach the 2 percent NATO target – about which von der Leyen has long expressed skepticism. Some security policy analysts argue that this figure does not tell us much and we should therefore focus instead on capabilities. But in terms of capabilities, the picture is not much better. Much of the extra spending that von der Leyen is asking for will be used to repair existing equipment: as a series of reports have revealed, only a fraction of Germany’s jets, tanks, and helicopters are operational as a result of cuts in spending on maintenance since 2010.

It is often also pointed out that in the last two years Germany has made a significant military contribution to the fight against the so-called Islamic State. For example, in the summer of 2014 Berlin supplied machine guns, anti-tank rockets, and five armored personnel carriers to the Kurdish Peshmerga in northern Iraq and sent 150 Bundeswehr soldiers to train Kurdish security forces. After the terror attacks on Paris in November 2015 Germany provided six reconnaissance Tornados and sent a frigate to the Mediterranean to support France, and expanded the deployment of the Bundeswehr as part of the UN mission in Mali, to which it has contributed since 2013. But what exactly is new about these steps, apart perhaps from the supply of weapons to a “conflict region”, is not clear. After all, the Bundeswehr has taken part in peacekeeping operations since the 1990s and even took part in combat operations in Afghanistan and Kosovo.

Thus it seems that Germany has not so much rediscovered geopolitics (as some have claimed since the beginning of the Ukraine crisis) as discovered the hard version of “geo-economics”. Berlin may now be re-prioritizing strategic objectives over economic ones and therefore may be becoming a “harder” kind of geo-economic power beyond Europe. But it remains skeptical of the use of military means. Moreover, even this shift from economic to strategic objectives seems for the moment to be limited. While the Ukraine crisis shattered illusions about the possibility of “partnership” with Russia, German policy vis-à-vis China – now a much bigger export market than Russia – remains to a large extent based on the same assumptions on which policy towards Russia was based. In other words, Germany’s new hard “geo-economic” approach only seems to apply to Russia policy.

“Submit To German Rule or Leave”

In addition, Germany continues to assertively use its economic power within Europe in order to impose its preferences on others. Indeed, in the summer of 2015, Germany seemed to go even further than it had earlier in the euro crisis. After the July 2015 summit, at which German Finance Minister Wolfgang Schäuble threatened Greece with a “time-out” from the euro, Belgian economist Paul de Grauwe said that a new template for eurozone governance had been created: “submit to German rule or leave.”^[6] Germany has also sought to use economic means to get what it wanted in the refugee crisis – in this case, a “fair” distribution of refugees within Europe: Interior Minister Thomas de Maizière threatened to cut EU funds to those countries rejecting binding quotas. Once again, the point is not whether German policy in this case was right or wrong, but rather how Germany exercises its power.

Thus the shift in German foreign policy since 2014 is neither as simple nor as dramatic as is often claimed. Unlike in the past, Germany is now acting as a “hard” geo-economic power in relation to Russia, although it is not clear that it will continue to do so forever – in particular, the Nordstream II gas pipeline project shows that the old tendency in Germany’s Russia policy still exists. Elsewhere in the world, however, Germany is still acting largely as a “geo-economic power” in the “soft” sense – in other words, as a power that primarily pursues economic objectives. Meanwhile Germany is continuing to use economic means to impose its preferences within Europe. German foreign policy continues to be characterized by the same contrast between economic assertiveness and military abstinence to which I pointed in my essay in 2011.  Five years on, the description of Germany as a “geo-economic power” seems to me to still fit.

^[1]     Hans Kundnani, “Germany as a Geo-Economic Power,” The Washington Quarterly 34:3, Summer 2011, 31–45.

^[2]     Hanns W. Maull, “Germany and Japan. The New Civilian Powers,” Foreign Affairs 69:5, Winter 1990/91, 91–106.

^[3]     John J. Mearsheimer, “Back to the Future: Instability in Europe after the Cold War,” International Security 15:1, Summer 1990, 5–56.

^[4]     Edward Luttwak: “From Geopolitics to Geo-Economics,” The National Interest, Summer 1990, 17–24.

^[5]     For the US debate see Michael R. Gordon and Eric Schmitt, “US Considers Supplying Arms to Ukraine Forces, Officials Say,” New York Times, February 2, 2015. On Merkel’s opposition to sending arms to Ukraine see Michael R. Gordon, Alison Smale, and Steven Erlanger, “Western Nations Split on Arming Kiev Forces,” New York Times, February 7, 2015.

^[6]     Tweet by Paul de Grauwe (@pdegrauwe), July 12, 2015.

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What is less clear is whether the post-Ukraine rethink will extend to other areas beyond Russia policy. Of particular importance is Germany’s approach to China: over the last decade, China and Germany have developed an increasingly close relationship based on the exponential growth of German exports to China, which are now almost double the volume of its exports to Russia. But while illusions about the possibility of “partnership” with Russia have been shattered during the past year, German policymakers have not yet demonstrated an awareness of the need to formulate a new China policy. Even as China has become increasingly aggressive in its neighborhood, Germany’s policy toward it remains based on the same assumptions as its former policy toward Russia – in particular, the idea that increasing economic interdependence can slowly but inexorably transform authoritarian powers into democracies, and revisionist powers into “responsible stakeholders.”^[1]

China and Germany have recently begun to widen the focus of their relationship to discuss security as well as economic issues. So far, their discussions have focused on urgent issues for Germany and Europe such as the Ukraine crisis – last October, for example, Merkel sought to persuade China to mediate with Russia.^[2] But as tensions increase in Asia, there is an increasing need for Europeans to think about the role they want to play – if any – in Asian security.

Given its close relationship with China, Germany will be crucial for the development of a coherent European approach to Asian security. Although its new security dialogue with China could be an opportunity for Europe, it could also undermine a coherent European approach to Asian security.

An “Asian Crimea”?

Over the last few years, tensions in Asia have dramatically increased – so much so that last year it became commonplace to compare the situation to that in Europe in 1914. The tensions center above all on unresolved territorial disputes in the region. The most explosive are those that China has with nearly all of its neighbors, based on territorial claims that go far beyond the United Nations Convention on the Law of the Sea (UNCLOS) – the key piece of international law covering maritime disputes. China claims the area enclosed by the “nine-dotted line” – in effect, most of the South China Sea – and the Japanese-governed Senkaku Islands (which the Chinese called the Diaoyu Islands) in the East China Sea. In the last five years it has become more aggressive in its neighborhood and more open in its bid for regional hegemony.

Chinese revisionism has the potential to lead to a kind of “Asian Crimea” crisis. One possible spark is Chinese aggression against Japan: In recent years, the danger of miscalculation has increased as Japanese fighters have been scrambled to deal with increasingly frequent Chinese incursions into Japanese airspace.^[3] Any conflict between China and Japan would risk pulling in the United States. During his visit to Asia in April 2014, President Barack Obama made it clear that Article 5 of the Japan-US Security Treaty “covers all territories under Japan’s administration, including the Senkaku Islands.” Although Europeans are not formally obliged to take sides with Japan, a failure to support it diplomatically could damage relations with the US and undermine Europe’s claim to stand for the rule of law – particularly if China violates international law as clearly as Russia did in Crimea.

A second possibility involves Chinese aggression in the South China Sea. China moved an oil rig into Vietnamese waters near the Paracel Islands in May 2014, leading to clashes between Chinese and Vietnamese ships. Then-US Defense Secretary Chuck Hagel subsequently criticized China’s “destabilizing, unilateral actions.” Over the past year, China has also been reclaiming land around islands that it controls in the South China Sea – and, in at least one case, built a runway.^[4] There are now fears that China could impose an Air Defense Identification Zone in the South China Sea, as it did in the East China Sea in November 2013. Any crisis in the South China Sea would threaten European trade.

Tensions in East Asia have eased to a certain extent over the last few months, and China and Japan agreed to talk about their territorial dispute ahead of the Asia-Pacific Economic Cooperation meeting in November 2014; Chinese President Xi Jinping and Japanese Prime Minister Shinzo Abe have met twice since then. In addition, China has softened its rhetoric toward its neighbors – in March 2015 Xi spoke of Asia as a “community of common destiny” – and begun to reach out to its neighbors in East Asia through its 21st Century Maritime Silk Road initiative.^[5] But the sources of tensions have not disappeared, and China’s military spending continues to increase; in March, it announced that its defense budget would rise by ten percent to roughly $145 billion in 2015.

The European Dilemma

The EU has a number of interests in East Asia, including the preservation of peace, the promotion of a rule-based international system, the development and consolidation of democracy, the rule of law, human rights, non-proliferation of weapons of mass destruction, and regional integration.^[6] In statements made during her term as High Representative for Foreign and Security Policy, Catherine Ashton emphasized that territorial disputes should be resolved on the basis of the rule of law, and in particular UNCLOS. But the EU has so far stopped short of calling out China for its aggression in the way the US has – or in the way the EU has called out Russia – let alone begun thinking about how it might use its collective resources to prevent or respond to a possible “Asian Crimea.”

While the EU itself emphasizes the international rule of law, member states seek above all to avoid antagonizing Beijing as they compete with each other for Chinese investment. A few years ago, it was the countries of the so-called eurozone periphery that were desperately seeking Chinese investment; now, however, it is nearly all member states, including “core” countries such as France, which agreed last year to sell a stake in the port of Toulouse to a Chinese consortium.^[7] The UK has similarly sought Chinese investment and agreements to make the City of London a center for offshore renminbi trading. In March, the UK became the first EU member state to express its intention to join the Asian Infrastructure Investment Bank.

At the same time, however, France and the UK – the EU’s two permanent members of the United Nations Security Council – have also quietly begun to play a more active role in Asian security. In particular, the French – who, uniquely along EU member states, have over a million citizens in the Indian Ocean – have followed the US in “pivoting” to Asia.^[8] France has increased security cooperation with Japan, which is seeking to strengthen its security ties with EU member states in response to the rise of China. In 2014 France and Japan created a “2+2” framework for regular talks between the two countries’ foreign and defense ministers, and have begun to cooperate on weapons development, including “unmanned systems.”

The UK has similarly intensified security cooperation with Japan. In 2013, after Japan relaxed its restrictions on research, development, and trade in defense equipment, it signed a defense cooperation agreement with the UK. Since then, the two countries have signed a number of further agreements and are negotiating an Acquisition and Cross-Servicing Agreement that will allow the armed forces of the two countries to provide each other with logistic, technical, and administrative support. Japan and the UK also set up a “2+2” framework for security dialogue between their foreign and defense ministers. After the first meeting in this format in January, Tokyo and London announced they had agreed to undertake joint research in air-to-air missile technology.

Meanwhile, the instinct of most other EU member states is to remain “neutral.” Some argue that, although Europeans may have increasing economic interests in Asia, they do not have any substantial stakes in faraway conflicts between Asian countries over apparently insignificant rocks, shoals, and reefs or in the emerging strategic rivalry between China and the US. Others think Europeans could play a mediating role between the parties in territorial disputes. In order to boost their chances of success, they argue, Europeans should avoid being seen taking sides. Thus while the EU institutions make statements, member states pursue their own interests. A crisis could even lead to a European split, with France and the UK increasingly aligned with Japan and the rest of the EU seeking to remain “neutral.”

Germany’s Role in Asian Security

Given its weight within the EU and its close relationship with Beijing, Berlin is of crucial importance. Germany and China see each other as their most important partners in each other’s regions: the Germans see China primarily as a market for their exports, while the Chinese are interested in technology transfer from German manufacturers. At their third government-to-government consultation, held in Berlin in October 2014, China and Germany announced an “innovation partnership” focusing on the joint development of “industry 4.0.”

But the two countries are increasingly talking about more than business. They have upgraded their “bilateral strategic dialogue” to include representatives of the two countries’ defense ministries – making it somewhat like the “2+2” framework France and the UK have established with Japan.

Until now, German officials have been somewhat skeptical of the attempts made by France and the UK to play a role through defense cooperation with countries such as Japan. Tokyo suggested increasing defense cooperation with Germany as it has with France and the UK, but Berlin’s response was tepid, in part because the country is skeptical about the ability of military means to shape the international environment and enhance security. Further, Japan may be a like-minded country, but Germany does not have any particular obligation to it. “NATO is not in the Pacific,” said one official. Others stress the need to avoid “thinking in terms of blocs.”

Some German officials even consider the statements by the previous EU’s High Representative for Foreign and Security Policy misplaced – in particular the joint statement by Lady Ashton and then-US Secretary of State Hillary Clinton in 2012.^[9] In the opinion of these officials, the EU should not take a position on the substance of individual territorial disputes but rather on process: “We are not interested in what the dispute is about, but in how it is handled.”

The problem, however, is that taking a robust stand on process – and in particular on the need to resolve territorial disputes on the basis of the rule of law – could in practice lead to taking sides on substance. China’s territorial claims are based on history rather than UNCLOS or broader international legal norms. Thus a principled insistence on the rule of law could lead to a confrontation with China – which Germany has been keen to avoid.

Berlin has often stressed its desire to develop a common European approach to Asian security. It may be flattering when Washington, Moscow, and Beijing ask Germany to play a privileged role, wrote Steinmeier in the final report of the foreign ministry’s 2014 review of German foreign policy, but it “must always turn it in a European direction.”^[10] But reaching agreement among the 28 EU member states – each with different economic and strategic interests – is extremely difficult. For example, Germany tried to include a statement on maritime disputes in the South China Sea in the declaration following the Asia-Europe Meeting last November, but other member states opposed it, worrying that they would be punished for criticizing China.

A European Division of Labor

A solution to this collective action problem could be a division of labor between EU member states. Instead of seeking to remain “neutral” – an ultimately unsustainable and self-defeating position – Europeans should seek to use their collective resources as part of a common approach to Asian security based on the rule of the law. Germany has neither the naval resources nor the strategic culture of France or the UK, and is therefore unlikely to be able – or willing – to emulate the role they are playing today in Asian security. But its relationship with China gives it economic leverage that it could use as part of a coordinated approach. In short: Berlin should be prepared to use its economic power to further European interests in Asia.

The shift in Germany’s Russia policy in 2014 could function as a kind of model for the role it could play in a European approach to Asian security. After the annexation of Crimea, Germany backed tough sanctions and persuaded reluctant EU member states to agree to them. In other words, instead of simply pursuing economic objectives in relation to Russia, it used its economic power to attain a strategic objective: the maintenance of the European security order. Although Europeans understandably still want to see China as a partner – just as they wanted to see Russia as a partner – they should be prepared for the possibility that they may at some point need to take a tougher approach.

This does not automatically mean imposing economic sanctions against China, though it is possible that Europeans may be forced to reluctantly consider such a step in future if Chinese aggression does lead to an “Asian Crimea.” In the meantime, to prevent such a dramatic crisis – and risk a split within the EU, or between the EU and the US – Europeans should plan a coordinated approach to Asian security that fully utilizes economic, diplomatic, and military leverage. As part of this approach, Germany should use its economic power, alongside British and French defense capabilities, to deter Chinese revisionism in Asia. In other words, instead of simply assuming that trade is transformative – the assumption of German policy so far – German policymakers should think about how they can use trade to actively encourage China to moderate its actions in Asia.

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^[1]     See Hans Kundnani, “Die Ostpolitik-Illusion,” INTERNATIONALE POLITIK, Januar/February 2014.

^[2]     See for example Tom Mitchell and Stefan Wagstyl, “Merkel looks to China to mediate with Russia,” Financial Times, October 9, 2014.

^[3]     Martin Fackler, “In a Test of Wills, Japanese Fighter Pilots Confront Chinese,” New York Times, March 8, 2015.

^[4]     Jane Perlez, “China Building Aircraft Runway in Disputed Spratly Islands,” New York Times, April 16, 2015.

^[5]     Xi Jinping, “Towards a Community of Common Destiny and A New Future for Asia”, speech at the Boao Forum for Asia Annual Conference, March 28, 2015; Jacob Stokes, “China’s Road Rules,” Foreign Affairs, April 19, 2015.

^[6]     Council of the European Union, “Guidelines on the EU‘s Foreign and Security Policy in East Asia,” June 15, 2012.

^[7]     See François Godement and Angela Stanzel, “The European Interest in an Investment Treaty with China, European Council on Foreign Relations,” February 2015.

^[8]     François Godement, “France’s ‘pivot’ to Asia,” European Council on Foreign Relations, May 2014.

^[9]     European Union, “Joint EU-US statement on the Asia-Pacific region,” July 12, 2012.

^[10]     German Federal Foreign Office, “Review 2014,” Final Report, 11.

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