Source: European Trade Union Institute of Research (ETUI)

Ten years after the onset of the eurocrisis, how does the eurozone look today? It has survived as an entity, and weathered most—if not all—of the crises that cropped up over the last decade. But even as shaky debt holdings and threats of national default recede from the headlines, is the eurozone any more secure financially than it was? Here’s a demand side view of the situation.

Overall, the union has recovered, albeit in fits and starts. GDP growth has bounced back from its 2009 low of -4.34 percent, hitting a high of 2.44 percent in 2017; but within that time period, there have been several worrisome dips, with the eurozone experiencing a fresh recession in 2012 as Europe’s GDP shrank by 0.43 percent. With new worries arising about the stability of several of the member states—especially Italy, where a new populist government has clashed with Brussels over budgetary policy—growth projections for 2018 have been cut to 2.1 percent, a slowdown from the previous year.

But as is often the case when it comes to the European economy, results have varied significantly between member states. Many countries are still treading water: In Greece, for example, GDP growth was only 1.4 percent in 2017, and Italian GDP growth only 1.5 percent. Meanwhile, some of the EU’s newest member states are dramatically outpacing the eurozone as a whole: Latvia, for example, experienced a contraction of 14.4 percent in 2009, but growth of 4.5 percent in 2017; Lithuania’s GDP shrank by 14.8 percent in 2009, but grew 3.8 percent in 2017; and Estonia’s GDP dipped by 14.7 percent in 2009, but grew at 4.9 percent in 2017.

On a per capita basis—and accounting for inflation—many of the member states have hardly experienced growth at all, and some of those who were hit the hardest a decade ago have yet to even recover to pre-crisis levels. In constant 2010-dollar terms, EU-wide GDP per capita has grown from 34,663 in 2008 to 36,593 between 2008 and 2017, an increase of only 5.5 percent over a decade. In Greece and Italy, GDP per capita is still below pre-crisis levels (23,074.40 vs. 29,874.70 and 34,877.80 vs. 37,585.3, respectively), and in Spain GDP per capita has barely shifted at all (32,405.80 vs. 32,303.20). France isn’t doing so well either: French GDP per capita has barely budged since 2008, and stagnant or deteriorating standards of living can easily translate into unstable politics.

A Longer-Term Demand Crisis

Part of the reason is that the broader economic recovery has done little to lift wages in many countries. According to a paper published in March 2018 by the European Trade Union Institute (ETUI), real wages actually declined in nine countries in the decade following the crisis. In Greece, Cyprus, Portugal, Croatia, Spain, Italy, the United Kingdom, Belgium, and Finland, workers still make less than they did in 2009—19.1 percent less in the case of Greece. ETUI lists several factors that have contributed to these drops, the most important being the reforms imposed by creditors in exchange for financial support measures: In many of the hardest hit countries, labor market reforms undermined collective bargaining in the name of competitiveness, rendering it more difficult for employees to push for higher wages as national economies recovered.

The crisis also slowed, and in some cases stopped, the process of economic convergence between countries. In 2000, Greek workers were paid a little over 50 percent of the EU average. That percentage had increased to almost 70 percent in 2008, then dropped to 60 percent in 2012 and had returned to roughly 50 percent by 2017. In Portugal, wages were roughly 50 percent the EU average in 2000, then climbed to 55 percent by 2008 before dropping back to 50 percent in 2012 and remaining there.

One of the problems here is domestic investment spending. The crisis decimated national budgets, and the austerity measures implemented to address it encouraged countries to slash yet further. Ten years on, that trend has yet to reverse. According to the Financial Times, Greece spends about 13 percent less of its GDP on domestic investments than it did in 2007, and Spain about 11 percent less. The only countries to have actually increased domestic spending are Sweden, Austria, Norway, and Germany—some of the countries least affected by the crisis, contributing further to intra-European disparities.

For the euro-skittish, enthusiasm for the European project often hinges on the prosperity European integration is meant to bring; and as the European debt crisis morphs into a longer-term demand crisis, that prosperity could reach fewer and fewer.

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Since right-wing populist parties began gaining power in Europe and the United States, common wisdom has held that their success is owed to the economic hardships endured by their voters. Germany’s Alternative für Deutschland (AfD) is theoretically fueled by the comparatively poor economy in the country’s former East, UKIP’s voters are frustrated with the lack of development in England’s small post-industrial towns, and, across the Atlantic, Trump’s popularity stems from frustrated rural voters who have not felt the benefits of the economic recovery.

The problem is that none of those arguments gels with reality—neither with the economic realities of the regions concerned nor with the subjective realities that emerge from surveys. In fact, according to a survey carried out by the German Savings Bank Finance Group between May and July, Germans are just about as optimistic about their country’s economy as they’ve ever been: 63 percent described their financial situation as “good” or “very good,” better than in any year since 2001. This optimism includes Bavaria, where 68 percent were satisfied with their financial outlook—and where voters recently delivered the governing CSU party its greatest defeat since 1950, while the AfD won enough votes to become the fourth-largest party.

A survey conducted by the Pew Research Center from October to December 2017 may shed some light on the forces that are actually propelling populist parties higher. There is indeed some evidence that economics plays a role: right-wing populists in Germany were eight percentage points more likely to earn below the national median income than the center-right; right-wing populists in Italy were nine percentage points more likely.

But the starker difference was in political engagement. Right-wing populists in Germany were 15 percentage points less likely than center-right Germans to say they were at least somewhat interested in politics; right-wing populists in Italy were 10 percentage points less likely, right-wing populists in the UK 11 percentage points less likely, and those in France were 12 percentage points less likely.

Why are these voters tuning out? The answer may have as much to do with their trust in their political representatives as with economics. In Germany, 62 percent of people who held a favorable view of the Social Democrats, or SPD, said they trusted the country’s parliament “somewhat” or “a lot,” as did 66 percent of respondents with a favorable view of the CDU and 66 percent with a favorable view of the Greens. Among respondents with a favorable view of the AfD, however, only 35 percent said the same—and 37 percent said they didn’t trust parliament at all. Meanwhile, 51 percent of those who had a favorable view of the AfD said they didn’t trust the media “much” or “at all.”

These numbers varied from country to country—UKIP supporters, for example, had more faith in the British parliament than Labour voters, possibly due to the fact that the UK government is visibly (if badly) attempting to implement Brexit; and Italian and British respondents in general distrusted the news media, regardless of their political inclinations. The German example is particularly helpful in light of the political drama the country has experienced over the last year. Even as leaders in the political mainstream have struggled to contain the AfD, they’ve simultaneously been locked in a number of squabbles within and between parties, from the perennial will-he-stay-or-will-he-go act of Interior Minister Horst Seehofer to the recent back-and-forth over the president of Germany’s domestic intelligence service, Hans-Georg Maassen. If German voters with a favorable view of the AfD are predisposed to distrust the parliament, constant infighting within the body itself is unlikely to help.

It’s difficult to say what exactly engendered this mistrust, but it may well be tied to Chancellor Angela Merkel’s everything-to-everyone reshaping of the CDU. In order to grow her party’s base, Merkel has adopted and amalgamated policies that are generally popular, regardless of how well they fit in with traditional conservative CDU values. Doing so has allowed her to win four terms as chancellor—but at the same time led many voters to ask what exactly it is they’re voting for when they vote for Merkel’s party. A vote for the CDU is a vote for stability, rather than for or against any particular policy.

After the federal election in 2017, many German political observers predicted that another “GroKo” government—a “grand coalition” between Chancellor Merkel’s CDU and the Social Democrats—would be the death knell of the SPD, which has struggled to demonstrate to its working-class constituency that it’s still serving their interests while operating within a center-right government. The critics haven’t been disappointed: The SPD has, rather embarrassingly, dropped to third place behind the AfD in several recent national polls. But with the collapse of the CDU and CSU and the continued ascent of the AfD, it’s becoming clear that the coalition isn’t serving either party well—and that, difficult as it might be to believe, German voters might prefer clarity and credibility to stability.

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Source: Pew Research Center

This past summer, refugee policy was once again at the top of Germany’s political agenda. Chancellor Angela Merkel’s government nearly collapsed in June when interior minister Horst Seehofer threatened to quit if stricter laws were not put into place restricting refugee arrivals. In the end, a compromise was reached that allowed Seehofer to stay in office: transit centers will be set up on the German-Austrian border to immediately return asylum seekers to the countries through which they first entered the EU. True, the compromise depends on as yet non-existent deals with Austria and Italy. But more importantly, it danced around an awkward fact: The number of arrivals is already below the levels Seehofer had previously insisted on. In fact, far fewer refugees are arriving in Europe in general; while the crisis cannot be said to have ended, the setting has changed.

According to Germany’s Federal Office for Migration and Refugees (BAMF), ­­­96,644 people applied for asylum for the first time in Germany from January to end of July 2018. At that rate, the figure for 2018 will be well below that for 2017, when there were 198,317 first-time applications. That was already a dramatic fall from 2016, when the corresponding figure was 722,370. Migrant arrivals are down for Europe as a whole too. The International Institute for Migration reports that 79,043 migrants have arrived this year through August 19th, compared with 186,768 in the year 2017.

In sum: Germany is on pace to stay well under the 220,000 limit for refugees that Seehofer has been demanding.

The epicenter of the refugee crisis continues to be outside the borders of Europe, in the countries directly neighboring Syria. According to Pew Research, there were 530,000 Syrian refugees in Germany in 2017 and 110,000 in Sweden; at the same time, there were 3.4 million Syrian refugees in Turkey, one million in Lebanon, 660,000 in Jordan, 250,000 in Iraq, and 130,000 in Egypt. There were also nearly six and a half million Syrians internally displaced within their own country. While incorporating hundreds of thousands of newcomers was a huge challenge for Germany, many of Syria’s neighbors had no real absorption capacity to begin with: neither Turkey nor Lebanon is as rich or stable as Europe’s biggest countries, and Iraq and Egypt are both in more or less perpetual crisis.

A UNHCR update issued in June reported that 85 percent of Syrian refugees in Jordan live below the poverty line, as do over 75 percent of Syrian refugees in Lebanon; and according to a UNICEF report issued in January, 67 percent of Syrian refugees live below the poverty line in Turkey. Even maintaining these meager conditions hasn’t been cheap: The Turkish government says that it has spent $30 billion building up support capacities, and the Lebanese government $20 billion.

Since the beginning of the crisis, European policymakers have called for addressing the “push factors” encouraging emigration—meaning that even as European governments take steps to limit the ability of refugees to enter their countries, they should also be making it easier for refugees to stay in their own (or as close as possible). Yet the funding needs of these destination countries are going largely unmet: Turkey has complained that the EU has not provided the €3 billion it promised as part of a 2016 deal to limit the number of refugees arriving in Greece. And a conference hosted by the EU in April and co-chaired by the UN secured promises for only $4.4 billion in aid, far short of the $6 billion UN High Commissioner for Refugees Amin Awad said would be necessary to avert a second wave of mass migration to Europe.

At this point, Seehofer’s insistence on stricter border measures in Bavaria seems like a solution in search of a problem; but if his gambit makes it more difficult for the EU to provide relief to refugees where they are, he may have provided the problem as well.

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Source: Eurostat

US President Donald Trump does not, to put it lightly, have a warm relationship with Germany, nor with German Chancellor Angela Merkel, against whom he has held a deep but somewhat inexplicable grudge since his emergence on the political scene. Among the topics which he likes to needle the chancellor about – a fictional crime wave this week, the disintegration of the EU the next—there is one to which he always returns: trade.

Trump has endlessly bemoaned Germany’s trade surplus, blaming both an artificially devalued euro and high tariffs for what he sees as a tilted playing field. In March, he tweeted: “The European Union, wonderful countries who treat the US very badly on trade, are complaining about the tariffs on Steel & Aluminum. If they drop their horrific barriers and tariffs on US products going in, we will likewise drop ours. Big Deficit. If not, we Tax Cars etc. FAIR!”

The US president—again, to say it diplomatically—does not devote much attention to the finer points of international trade. There are, in fact, trade asymmetries between the United States and the European Union: The average EU customs duty is 5.2 percent, while the average American customs duty is 3.5 percent; the disparity in customs duties applied to cars is particularly stark, at 10 percent and 2.5 percent, respectively.

There are several sectors, however, where steep duties are levied on the American side as well: The US places a 25 percent tax on small truck imports from the EU, for example. More importantly, because of the degree to which American and European industries are intertwined, implementing retaliatory tariffs—rather than negotiating lower trade barriers in general—is completely self-defeating.

But even a stopped clock is right twice a day, and the US president, despite his best efforts, has made a valid point: most of the EU member states are running significant trade surpluses, and these surpluses are becoming dangerous—for the EU most of all. Since all of the member states are trying to sell their way to solvency and cut domestic spending, there’s no one to buy; and if intra-EU consumption doesn’t grow commensurately with productivity, member states will find themselves dividing up an ever-shrinking cake. At its core, a trade surplus is an excess of national saving over domestic investment. Low domestic investment means slower growth and crumbling infrastructure.

The EU’s aggregate trade surplus of about 3 percent of GDP is not spread evenly across all the member states, but nearly all member states run a surplus: According to the OECD, Germany’s 2016 trade surplus was 8.57 percent of GDP, the Netherlands’ was 8.46 percent, Hungary’s 6.01 percent, Sweden’s 4.25 percent, and Italy’s 2.56 percent. Incidentally, European regulations stipulate that no country’s surplus should surpass 6 percent of GDP. France and the United Kingdom were among the few member states with deficits, at -0.85 percent and -5.78 percent, respectively.

This would be less of a problem for Europe if these countries were trading primarily with external partners. The trouble is that, for the most part, they are not: most EU member states count other member states among their primary trade partners. And as they have all more or less diligently followed the prescribed course of austerity and export-orientation—largely following Germany’s model—the EU has become a shop with 28 salespeople and no customers. By cutting domestic spending, member states are reducing domestic demand for goods other member states might want to sell. And export-led growth has a tendency to merely reinforce existing imbalances in the union: Any eurozone-wide policy to stimulate exports from Greece cannot help but do the same for exports from Germany, preventing the member states with lagging economies from ever catching up.

The countries that have global trade surpluses tend to have surpluses within the EU as well: In 2016, the Netherlands had an intra-EU surplus of €177 billion, Germany €73 billion, Hungary €9 billion, and Italy €10 billion; meanwhile, France had an intra-EU trade deficit of €87 billion, and the UK €115 billion.

Europe’s focus on foreign markets also extends to investment: as the Financial Times reported last year, there’s been a steady drop in investment within the EU since the summer of 2012. Part of this stems from a lack of domestic spending during the various economic crises; but a great deal can also be attributed to the European Central Bank’s decision to maintain near-zero interest rates and the insistence that individual member states reduce their deficits. In an attempt to simultaneously spur growth and balance the books, the EU seems to have plugged some of the leaks in its member states’ coffers, but it’s made itself a less attractive place to invest and reduced the debt instruments with which interested parties might do so.

It should be noted that the Germans themselves have called attention to the problem. German Finance Minister Wolfgang Schäuble told the Tagesspiegel last year that he believed the euro was undervalued, saying, “When ECB chief Mario Draghi embarked on the expansive monetary policy, I told him he would drive up Germany’s export surplus.” But Germany also shoulders a great deal of the blame: Citing its “debt brake,” Berlin has resisted running a deficit even when it could have borrowed at near-zero interest rates, choking off one of the potential sources of liquidity—and demand—within the common market.

Trump’s actions will almost certainly do more harm than good, to his own country most of all. But he is not wrong in pointing out that the game is unfair.

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Source: IP-Forsa poll, April 2018

At first glance, the results of a recent Forsa poll for our sister publication Internationale Politik may seem puzzling. The survey asked Germans whether they agreed with the following statement: “Germany should pay more into the EU budget if the EU were to take on more responsibility in certain areas.” After being told for years that they were indulging profligate southern European countries—and in the aftermath of an election that saw significant gains for the euroskeptic Alternative für Deutschland (AfD)—one would expect Germans to be leery of promising yet more money to Brussels. And yet, 58 percent of Germans agreed, even accounting for the 77 percent of AfD voters who felt otherwise.

What is behind this strong support for Europe? After all, the question was not asking how Germans felt about the EU, but whether they’d be willing to pay more for it.
The annual Eurobarometer survey initially offers little insight. Compared to fellow member states, Germans were not particularly likely to say they had a positive image of the EU. Forty-five percent said they did, a higher percentage than in France and Greece, but a lower one than in Ireland, Luxembourg, Poland, and Portugal. Less than half of Germans said that they trust in the EU, lower than the corresponding percentages in Belgium, Sweden, the Netherlands, and Portugal, as well as in many of the newer eastern member states.

One clue can be found in how much respondents felt their respective countries influenced EU policy. Here, Germans were more enthusiastic: roughly two-thirds agreed with the statement “My voice counts in the EU,” more than in any other member state except Denmark (in fact, a full ten percentage points more than in every other country but Sweden and Austria). For better or for worse, Germans feel like they have influence over the EU’s journey—and it’s possible that this is making them more amenable to chipping in for gas.

Further, Germans see the EU’s priorities aligned with their own. When asked about the most important issue facing the EU, most respondents EU-wide said immigration (39 percent), followed by terrorism (38 percent). This breakdown was mirrored in individual member states, almost all of which described immigration and terrorism as the EU’s top two priorities (with the exception of Austria, Slovakia, and Sweden, which also emphasized member state finances, crime, and climate change, respectively).

These priorities rarely reflected what respondents saw as the most pressing problems affecting their own nation: the Dutch said their biggest problem was health and social security, Lithuanians said inflation, the Irish and the Luxembourgers both worried about housing scarcity, and many of the crisis-hit countries said unemployment remained their biggest issue. Not so in Germany: pluralities in Germany (40 percent), Belgium (29 percent), and Austria (28 percent) listed immigration as their country’s greatest concern. The average German, in short, sees Germany’s problems as Europe’s problems—and is willing to pay a bit more to have these dealt with in an EU-wide capacity.

What is particularly interesting is the party breakdown of the Forsa results. Voters of the conservative Christian Democratic Union (CDU) and their Bavarian sister Christian Social Union (CSU), together representing the largest bloc in Germany’s governing coalition, were ambivalent: only 56 percent agreed with providing greater funding for the EU. Voters of the centre-left Social Democrats (SPD), junior partner in the coalition, had no such qualms, with just below three-quarters (70 percent) saying the country should increase its contributions. No great surprise given that the SPD’s last candidate for chancellor, Martin Schulz, was a long-serving president of the European Parliament.

But 70 percent of Free Democrats (FDP) said the same, seemingly undermining a fundamental stance of its party chairman, Christian Lindner. The young FDP leader walked out of one of several rounds of coalition talks in a huff, claiming he could not in good faith agree to a coalition agreement that would have Germany contributing more to the European budget. While he characterized his behavior in coalition talks as good-faith negotiating, there was significant speculation that he had been seeking an excuse to walk out from the beginning. Julia Klöckner, one of the CDU’s negotiators, called it “well-planned spontaneity.”

Whatever Linder’s motives, he seems to have misjudged voters. An ARD-DeutschlandTrend poll from December 2017 showed his national popularity dropping by 17 percentage points following his auto-da-fé, and a 10-percentage-point drop within his own party. It seems that even within the FDP, a majority continues to see the EU as an efficient way to share the burden of Germany’s problems.

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© Landesvertretung Baden-Württemberg

Artificial Intelligence (AI) offers exciting potential but also requires policy oversight—the kind of policy oversight that, unfortunately, no government can realistically provide on its own. When Volker Ratzmann, state secretary for the federal state of Baden-Württemberg, opened the Aspen Institute’s “Humanity Disrupted: Artificial Intelligence and Changing Societies” conference at Baden-Württemberg’s representative offices in Berlin, he started with what would become an oft-repeated theme.

“AI presents huge challenges that we have to manage and regulate together,” Ratzmann said. “No country can manage this individually.” Kent Logsdon, the American Embassy’s chargé d’affaires, echoed this sentiment, saying that while governments should not centrally direct AI, there are also “serious issues to be discussed, and many will require leadership to seize benefits while managing risks.”

Over two days, a mix of researchers, industry representatives, and policymakers returned again and again to what humankind could achieve with AI and machine learning over the next several decades —the potential advances in medicine, transportation, and manufacturing, to name only a few—but also to the dangers it could unleash if left unregulated.

Joanna Bryson, a professor at the University of Bath and the Princeton Center for Information Technology Policy, emphasized the complete decoupling between productivity and wages that technology has contributed to, pointing out that as tech disassociates work from the location it is performed in, it will have to be regulated more by international treaty than national regulation. Nicola Beer, a German lawmaker and secretary general of the Free Democratic Party (FDP), added that AI would create as many jobs as it destroyed—or even more—but that it would also call into question the most basic functions of government, changing how we look at concepts like taxation and finance.

But oh, those self-driving cars. Autonomous vehicles also took center stage in several discussions. Anne Carblanc, the head of the OECD’s Digital Economy Policy Division, noted that self-driving cars could cut transportation costs by 40 percent, but will endanger 2.2 million to 3.1 million jobs in the US alone over the next two decades. From the industry perspective, meanwhile, Jeff Bullwinkel, an Associate General Counsel with Microsoft Europe, said the international computing giant shares these concerns—is optimistic that, with proper oversight, the benefits could be enjoyed even as the trade-offs are managed.

It was unclear, however, how exactly that oversight would work, or where it would come from. The researchers working on AI pointed out that artificial intelligence is itself only a tool, and that its ramifications will depend largely on how human beings apply it; in other words, AI doesn’t displace people, people do. Thus, it would be essential that policymakers take the lead on monitoring the development of our increasingly automated society and ensure that any threats that arise are addressed.

The policymakers, on the other hand, often pushed the same responsibility back to the tech sector, saying that it was the duty of companies to regulate their technological advances, and the responsibility of researchers to build accountability into their machines.

The Innovation Gap

In a panel titled “Driving Innovation: Autonomous Vehicles and the Future of Rail and the Open Road,” the consensus—as one might expect from a panel composed of AI researchers and transportation specialists—was that machine learning will dramatically enhance the efficiency of transportation networks. Yet Magnus Graf Lambsdorff, a partner at the venture capital company Lakestar, said he was less worried about the ramifications of autonomous vehicles and more worried that Germany, famous for its automotive industry, will not be the primary beneficiary: “The amount Germany invests [in AI research] is vanishingly small compared to in France or the United States.”

That was a sentiment heard often at the conference—Germany in particular has the skills to be a major global player in AI but, as a late adopter to all things digital, has failed to invest funds, time, and energy in the field. In a panel titled “Is Germany Ready for the AI Revolution?” there was much hand-wringing over why Silicon Valley and China have surpassed Berlin in shaping the technology of the future (and present, for that matter). MP Thomas Jarzombek noted that Germany lags behind in data processing and knowledge transfer, adding: “The problem is Germans love hardware. We’re a great engineering country but we’re behind on software.” (sic)

That might be headed for change on the European level, at least. A European Union representative delivered the news that the Commission will set up a European AI alliance as a multi-stakeholder forum, hoping it will become a global platform that will, among other developments, generate a comprehensive set of ethical guidelines for deploying AI. How to implement those guidelines (and get all 27 EU members to sign on) is another question.

In one of the more ominous sessions, a panel of defense representatives and researchers discussed whether AI has brought about the third revolution in warfare; Toby Walsh, a professor of computer science at the University of New South Wales, warned of the dangers of allowing “stupid machines the right to decide over life and death,” adding that autonomous weapons systems will be weapons of terror: “You can ask them to do anything, however evil.”

Both the head of the German military’s future analysis branch, Olaf Theiler, and Frank Sauer, a researcher at the Bundeswehr University in Munich, appeared to agree that the use of AI in analyzing data or visualization was welcome—anything beyond, however, including operational decisions and tactical planning, needs humans to play an active role. It remains to be seen how governments like Germany can and will react when adversaries—whether they be non-state actors or other governments—choose to employ autonomous weapons systems and other AI applications in conflict and warfare.

There was broad consensus, across all the discussions and panels, that AI has already become a part of our lives—think search engines, as Joanna Bryson pointed out, or transcription software. Now it will take inclusive dialogue between society, politics, research, and industry to decide what we want to do with artificial intelligence, and quickly. Because as Frank Kirchner of the German Research Center for Artificial Intelligence in Bremen put it: “There is no law of nature that says that robots can’t become more intelligent than us—we have to make sure we don’t become less intelligent.”

NB. Berlin Policy Journal was a media partner for the Aspen AI2018 Berlin conference.

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Source: Pew Research Center

A Forsa survey conducted for our German-language sister publication Internationale Politik in February produced a result that basically confirmed earlier polls: a fairly wide plurality of Germans (46 percent) consider the rise of “Asian countries” an opportunity, while only a third (33 percent) consider it a threat. This mirrors findings from other surveys over the past few years: Growing numbers of Europeans, especially Germans, have been describing China more positively, seeing it more as a potential partner than a potential competitor.

In a Pew Research Center global attitudes survey conducted in spring 2017, the United States and China were neck and neck in terms of favorability, with China more popular in the Netherlands and Spain and just about tied with Germany, France, Sweden, and the United Kingdom. A fifth of Germans (21 percent) described “China’s power and influence” as a threat – but then, a third said the same of the US (35 percent).

And as far back as 2013, the German Marshall Fund’s Transatlantic Trends survey showed a transatlantic divide on the issue: While almost two thirds of Americans viewed China as a threat, Europeans were nearly evenly divided, with Germany, the Netherlands, Sweden, and the UK more likely to see China as an opportunity and France, Italy, Poland, Portugal, and Spain more likely to see it as a threat.

Are Germans simply more optimistic? That seems unlikely.

Two things are important to establish when looking at survey data on Asia in general or China in particular (and it’s worth noting that the two often serve as proxies for each other in survey questions—ask about Asia and your respondent will likely think of China).

First, even the people who view the rise of China as an opportunity haven’t necessarily liked it that much. In the same Transatlantic Trends survey, 60 percent of Europeans—including 71 percent of Germans and 65 percent of Swedes—said their opinion of China was “unfavorable,” and 65 percent of Europeans described a strong international leadership role for China as “undesirable.” The more recent Pew poll shows that people have warmed up to China since then, but it should be clear that seeing China as an economic opportunity does not necessarily correlate with seeing it as a friend.

Second, demographics matter. A closer examination of the Forsa poll reveals two details worth examining. First, there is a significant education divide between Germans who view China as an opportunity and Germans who view China as a threat: 51 percent of Germans who studied beyond high school see China as an opportunity, compared to only 40 percent of those who did not study beyond high school and 31 percent who attended the less prestigious Hauptschule. In other words, the more educated a German is, the more likely he or she is to see China as an opportunity.

Second, there is no clear difference between the responses given by Germans from different political backgrounds. A supporter of Merkel’s CDU was just as likely (allowing for a 3 percent margin of error) to see China as an opportunity as a supporter of the center-left SPD, and even the outliers—the Greens at 57 percent and the FDP at 47 percent—were not that far apart. The only exception is the right-wing populist Alternative für Deutschland: AfD voters were considerably more likely to see China as a threat, and considerably less likely to see it as an opportunity.

What does this mean? Voters from very different parties with very different ideas regarding international trade held basically similar views regarding the economic rise of Asia.

Here’s one possible explanation for these attitudes: China has become such a political symbol in both the US and Europe—a stand-in for foreign competition, and globalization in general—that questions about China elicit answers about economic security. If a European is asked how they feel about the rise of China (or Asian nations in general), they will answer by estimating their own likelihood of being displaced—an educated German whose job is reasonably secure will see China as an opportunity, while a less educated German (or a French or Spanish respondent) with an uncertain economic future will see China as yet another competitor in the workplace.

These respondents would be hard-pressed to name any of China’s policies, or indeed to point to the sectors where it offered either a threat or an opportunity. But they know how relatively precarious their own economic positions are, and how likely any new factor is to be one or the other. In other words, when we ask about China, we are really asking: How prepared do you feel for competition?

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Youth unemployment in Europe has been one of the major political, economic, and social challenges of the last decade. Even though statistics indicate progress on youth unemployment, young people still have problems in accessing the labor market.

This is not only a major challenge for the long-term competitiveness of the European economy. Also, the younger generation’s lack of prospects is also likely to fuel social malaise and trigger generational conflicts.

Join us for our European Encounter on youth unemployment Brando Benifei (MEP), Claire Dhéret (Senior Policy Analyst, European Policy Center), and Beata Nagy (Art Director, JobAct Europe, Projektfabrik) on Tuesday, January 30,  2-4 pm at the EPC Conference Center, 14-16 Rue du Trône, 1000 Brussels.

Register your interest to attend by e-mailing n.news [at] epc.eu

We’re looking forward to seeing you there!

The post “A Lost Generation?” appeared first on Berlin Policy Journal - Blog.

Yet here we are again. Italy is set to hold an election no later than May 20, and opinion polls show the center-right in the lead, with the populist Five Star Movement not far behind. If the election were held today, the center-right coalition would take 34 percent of the vote, the center-left would take 33.1 percent, and the Five Star movement would take 25.4 percent.

Europe should prepare for a more difficult relationship with Rome, whether the country leaves the union or not. The Five Star movement, founded by stand-up comedian Beppe Grillo, is explicitly euroskeptic and demands that Italy leave the euro. It has also advocated the country’s withdrawal from the passport-free Schengen travel area, the expulsion of immigrants, and turning away refugees who arrive by sea.

Meanwhile, the center-right is led by Silvio Berlusconi – yes, that Silvio Berlusconi. The 81-year old four-time former prime minister (his last stint was 2008-11) has recently made pro-European noises – even expressing his support for the deeper economic and defense integration suggested by Macron – but his party, Forza Italia, would govern with the far-right, anti-European Lega Nord and the nationalist Brothers of Italy.

There is one thing might save the EU from having to deal with a populist party in control of one of its largest economies: a law passed this year called the “Rosatellum”. Designed to finish the electoral overhaul begun by Matteo Renzi before he resigned last December, the Rosatellum awards 36 percent of legislative seats on a first-past-the-post system, and the remaining 64 percent proportionally. In theory, this would reward established parties that are able to form large coalitions by giving them a supermajority, while punishing smaller fringe parties. Understandably, the Five Star movement has protested bitterly against this change, calling the law the “anti-Five-Star-ellum.”

One thing is certain: With a former prime minister, media mogul, and convicted bunga bunga connoisseur on the center-right, and 31-year-old waiter Luigi Di Maio at the head of the Five Star movement, Europe is in for an exciting campaign season.

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Our colleague and friend, Sylke Tempel, passed away on October 5, 2017, at the age of 54. She was struck by a tree and killed in Berlin during Xavier, a flash storm. Tempel served as editor-in-chief of Internationale Politik since 2008 and founded this publication, the Berlin Policy Journal, in 2015.

Tempel was one of Germany’s most prominent foreign policy thinkers. She was a regular guest on the political talk show circuit; she moderated panels at conferences across the world; she lectured students at Stanford University’s Bing Overseas Studies Program in Berlin; she worked with leading policy-makers on shaping international relations; and she chaired the German chapter of Women in International Security (WIIS).

Her sharp intellect and critical thinking resonated on the global stage. She thrived in debates, engaging opinions from across the political spectrum and fearlessly confronting high-ranking politicians, thinkers, and analysts. She loved a good argument, but she was never intransigent. She did not waver on her values – staunch advocate of democratic ideals and open, tolerant societies that she was – yet she listened to and engaged with other views.

Sylke Tempel was not merely erudite; she was also able to communicate complex topics to a broad audience in straightforward, unambiguous language, free of the jargon that so often clouds political discussions.

“She always thought about how to communicate the debate surrounding foreign and security policy here to a wider audience, not just in Germany but also abroad,” said Thomas Bagger, Director of Foreign Policy in the Office of the Federal President and a former director of the Federal Foreign Office’s policy planning staff. “Her ability to view things from the outside, to understand what people saw and expected of Germany, earned her particular prominence because there are so few in Germany who do so.”

Emily Haber, State Secretary in Germany’s Interior Ministry and a friend of Tempel’s over many years, recalls her immense desire to examine an issue from all sides – not to reaffirm her own beliefs, but to truly understand intricacies and nuances. It was a trait that set her analysis and coverage of Israel apart, for example. Her deep love and sympathy for the country did not prevent her from taking account of the various perspectives of the region’s political struggle, or building close friendships on all sides of the conflict.

“She wasn’t able to lie to herself. She wasn’t able to embellish things if they weren’t there to be embellished. She was extremely honest,” said Haber.

•••

Sylke Tempel was born May 30, 1963, in Bayreuth in northern Bavaria. As a young woman, she aspired to study medicine in the city of Augsburg. She was waitlisted, however, and enrolled at Munich’s Ludwig-Maximilians University instead. It was there that her love for history, political science, and Israel blossomed. She wrote her thesis on “The Reparations Question: Relations between the German Democratic Republic and Israel between 1945 and 1988.” She never did return to medicine.

After receiving a grant from the Volkswagen Foundation, Tempel conducted research for two years at Columbia University in New York – freelancing for the German-Jewish Aufbau – and then completed her Ph.D. on “The Relations between Jewish-American Organizations and the Federal Republic of Germany after 1945” at the University of the Armed Forces in Munich.

She moved to Israel where she would spend more than a decade reporting on the Middle East for various German, Austrian, and Swiss publications, including Die Woche and Jüdische Allgemeine Zeitung, Germany’s leading national Jewish weekly. Fluent in Hebrew, she covered a vast range of stories in the region, including the Oslo Peace Process and the assassination of Yitzhak Rabin in 1995.

Tempel authored six books, including Freya von Moltke: Ein Leben. Ein Jahrhundert, a portrait of an anti-Nazi resistance fighter, and Wir wollen beide hier leben. Eine schwierige Freundschaft in Jerusalem, featuring letters of correspondence between an Israeli and Palestinian student. She was honored with the Quadriga Prize for the latter.

She was also a dedicated transatlanticist, contributing to numerous American and international publications and lecturing at the Institute for German Studies at Stanford in California. Just before her death, she joined a group of leading German foreign policy experts to pen a transatlantic manifesto titled “In Spite of it All, America.”

“She had strong faith in her values,” said Joachim Staron, an editor at Internationale Politik. “Not even Donald Trump could shake her belief that the transatlantic relationship was fundamentally important.”

“A German With a Sense of Humor”

Throughout her life, Tempel remained passionately curious. She was a voracious consumer of books, articles, and films on the most varied of topics, from ancient history to contemporary satire, Harry Potter and the latest Tarantino movie. She drew upon a rich reservoir of knowledge, making her one of the most sought-after moderators and commentators in her field.

Despite the prestige and many honors bestowed upon her, Tempel also remained unfailingly kind, generous, and funny – so very funny, in a disarming, mischievous way. Her broad smile and warmth filled the room, and even the busiest of days were punctuated by the sound of laughter emanating from her office. She delighted in silly YouTube videos that she circulated among her colleagues and Loriot sketches she would recall in editorial meetings – and the Minions, a particular favorite. She drew parallels between Asterix and Obelix and Mickey Mouse and mankind’s most fundamental conflicts with a twinkle in her eye.

“She said it was always her advantage to be a German with a sense of humor because no one expected that,” said Rachel Tausendfreund, editorial director at the German Marshall Fund in Berlin, who worked with Tempel at Internationale Politik. “She was elegantly charming.”

Tempel had a penchant for jewel-toned jackets and brightly hued purses and shoes, a jolt of color in the often-drab foreign policy world of black and gray suits. Of her many projects, one was to update the IP and BPJ offices on the top floor of the German Council on Foreign Relations. When renovation work unexpectedly stalled (after a week, inexplicably, only two of six doors had been sanded and painted) she and her colleagues rolled up their sleeves and went to work painting themselves.

She ensured that all birthdays were celebrated with singing and generous portions of cake. She treated her colleagues’ children as her own, welcoming them to spend time in the office and share in her appreciation for Donald Duck. And she actively mentored younger colleagues, serving as a role model particularly for women trying to find their feet in male-dominated domains like foreign policy or defense.

Her long-time colleague, Uta Kuhlmann, said Tempel remained so firmly grounded due to her upbringing in the countryside in southern Germany and her close relationship with her family. She built her life upon three pillars: friends, family, and work. If professional commitments grew difficult, she would draw joy from her private life, surrounded by a small circle of good friends, her parents, her godchildren, or her partner.

“Sylke was just happy. She chose what she surrounded herself with in life, and she managed to do so because she was so clever and smart and optimistic,” said Kuhlmann.

Despite her professional commitments and busy travel schedule, Tempel was also deeply devoted to her nephew and her godchildren. She and her partner spent hours helping with homework assignments and traded in their convertible for a family car. Tempel also served as a reading ambassador, reading to students in a Berlin school in the morning before going to the office. She was generous with her time and attention, regardless of her audience.

“Sylke would completely concentrate on the person she was talking to at the moment. She gave you all her attention and concentrated on what linked her to you, and what would interest you,” said Emily Haber. “She would get the best of people because she took interest in what they could offer. That’s rare.”

Tempel led the push to turn Internationale Politik into a leading political affairs magazine, growing the brand and sharpening its profile to include IP Wirtschaft, or IP Business, in 2012. She had been working with the head of the German Council on Foreign Relations (DGAP), Daniela Schwarzer, on plans to restructure the think tank as well. She was also selected to be among the first class of Thomas Mann fellows, a program bringing leaders from across German society to the US to foster dialogue and exchange with intellectuals and institutions in the US.

Sylke Tempel is survived by her parents, her sister, her nephew, her partner, and her friends and colleagues.

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