Source: Eurostat

As European governments debate whether to allow Huawei to build critical 5G infrastructure, fears of economic retaliation by China play a major role in their thinking. While this is a legitimate concern, it would be a mistake if such concerns were allowed to dominate decision-making on strategic issues.

China certainly has serious economic weight, and its market is increasingly important to some European countries, but its real retaliatory power is often overstated. Governments across Europe tend to overlook an obvious fact: the EU single market—not China—is by far their most important source of economic growth.

Following the Chinese Call

As part of accelerated Chinese Outbound Foreign Direct Investment starting around 2012, Europe began to emerge as a preferred investment destination. A surge in Chinese companies’ activities to diversify their portfolio abroad resulted in mergers and acquisition of technology assets in the wealthiest European countries, and infrastructure investment in Europe’s periphery.

Against this backdrop, China sought to institutionalize political and economic cooperation with EU members, both bilaterally and through sub-regional formats. In the aftermath of the eurozone crisis and in the context of rising euroskeptic movements, Beijing benefited from the perception that China could offer attractive economic opportunities in the face of weak GDP growth and be an alternative to Brussels. The launch in 2013 of China’s global trade and infrastructure project, the Belt and Road Initiative (BRI), further reinforced this perception. This has prompted European governments to sign Memoranda of Understanding (MoUs) with Beijing in hopes of securing economic benefits.  At the same time, they made sure to avoid criticism of China for fear of losing out on such opportunities.

Now, the threat of Chinese retaliation if governments decide to exclude or limit the role of telecom equipment provider Huawei in their countries’ 5G is making countries that are more dependent on the Chinese market think twice. However, a look at the numbers shows that European nations have less reason to be afraid than one might expect.

A Narrative of Dependency

In 2018, the EU single market accounted for on average 66.1 percent total exports of the individual EU 27 members plus the United Kingdom, against an average of 2.4 percent going to China.  For member states (and the UK) exports outside the single market, the share of exports to the US was on average 9.3 percentage points larger than those going to China.

These figures should help put the importance of the Chinese market for European economies in perspective and debunk the narrative that China is a source of unlimited economic opportunities. By the same token, these figures show the limits of China’s retaliatory power vis-à-vis European countries and indicate an untapped potential for the EU to leverage its economic power in relations with Beijing. In some states, the narrative about economic dependency on China is likely driven by an over-exposure of some large corporates, such as the German automotive industry, which is heavily invested in the country.

Despite this reality, the economic opportunity/retaliation argument is still disproportionately affecting how governments think about China, including on issues that have strategic and national security implications. It is possible that Chinese ambassadors’ activism across Europe is contributing to this perception.

Ambassadorial Pressure

In December 2019, Beijing’s envoy in Berlin, Ambassador Wu Ken, said that “If Germany were to make a decision that led to Huawei’s exclusion from the German market, there would be consequences. The Chinese government will not stand idly by.” Members of the Bundestag are convinced that in case of an unfavorable decision on Huawei, Beijing would go after the German car industry in China.

It turns out that Germany–which along with France has promoted itself as a leading force behind a coordinated European China policy—may be the EU member state most vulnerable to Beijing’s pressure in bilateral economic relations. In Europe, Germany has the highest share of exports to China (7.1 percent of its total exports, and 17.3 percent of its exports outside of the EU in 2018 according to Eurostat), far above the EU member state average of 2.4 percent and 7.3 percent respectively. German investment in China is also the highest in the EU. The Chinese market is particularly vital to German carmakers. Volkswagen, for example, generates almost half of its revenue in China. All together BMW, Daimler, and Volkswagen made over one-third of their car sales in the People’s Republic in 2018. In January 2019, the influential Federation of German Industries (BDI) urged companies to reduce their dependence on the Chinese market in response to China’s selective market opening and its ambitious industrial policy, which aims at reducing its reliance on foreign companies.

However, while China and the US are Germany’s single most important export markets outside the EU (7.1 percent and 8.7 percent respectively), its export markets are highly diversified, with the EU single market accounting for 59 percent of exports in 2018. So even though Germany is far more exposed than other member states to both the United States’ and China’s retaliatory power, its overall economic dependency on China is smaller than it is often made out to be, and not enough to justify an accommodating position on strategic issues.

Growing Disappointment With China

For years, European governments’ China policies were based on the premise that maintaining friendly political relations, even at the expense of standing up for their own values and interests, was key to unlocking special economic treatment in bilateral relations. Euroskeptic governments have been especially keen on showing Brussels that they had an economic alternative in China. This has made them  cautious not to upset Beijing—an approach that has occasionally extended to economic policy, for example when the previous Italian government worked to water down and eventually abstained from voting on the EU investment screening framework that its predecessors in Rome had asked the European Commission to draw up.

Different European countries are now starting to be more clear-eyed about the gap between China’s promises and the trade and investment reality. For example, the Chinese market still only plays a minor role in the economy of the twelve eastern EU states that are part of the 17+1 framework for cooperation with China. They all joined the China-led format and signed BRI MoUs to cash in on Beijing’s promises for trade and investment. But on average, exports to China still only account for 1.4 percent of their total exports, and Chinese investment has continued to flow to western Europe, neglecting their region. Some of the format’s members, like Poland and the Czech Republic, have voiced their disappointment. Importantly, an average of 72.4 percent of these 12 countries’ total exports go to the EU internal market.

Italy finds itself in a similar situation. The previous euroskeptic government signed a BRI MoU with the stated goal of exporting more to China. However, Italian exports to China declined in 2019, and the Chinese market still accounts for just 2.8 percent of its total exports, compared with 56.6 percent of exports that go to the EU single market. Rome is now also taking a more realistic approach to China and has joined Berlin, Paris, and Warsaw in the push to revise EU competition policy to stand up to China and the US.

Learning from China’s Neighbors

While countries like Germany, the UK, and Finland are slightly more reliant on the Chinese market, lessons from Japan, South Korea, and Taiwan show that economic dependency does not have to translate into an accommodating position toward China.

Beijing’s East Asian neighbors depend much more strongly than European countries on China (individually, their export share to China was between 20 and 30 percent in 2018). However, they are forced to adopt a comprehensive approach that goes far beyond economic interests and factors in national security considerations, not least because of their proximity to China, which they see as a strategic rival. When Beijing weaponized its economic power against them in the past—for example over the Senkaku/Diaoyu islands dispute with Japan or over South Korea’s deployment of the THAAD missile shield—they took measures to foster economic sovereignty in response, effectively limiting China’s economic leverage instead of giving in to Chinese pressure.

European governments should learn from East Asian nations. They should put strategic considerations first and not be overly worried about China’s economic retaliation. This requires growing more comfortable with compartmentalizing the relationship into areas of cooperation and competition. In addition, while the Chinese backlash temporarily hit individual companies (e.g. South Korea’s Lotte), economic ties between China and the three East Asian nations have remained stable overall.

Indeed, another lesson from China’s immediate neighbors is that while Beijing would quickly take advantage of a Europe that was being too accommodating, it is unlikely to substantially follow through on its threats. If Europe took more measures to promote economic sovereignty, China would most likely adapt its own approach in order to continue profiting from good relations with the EU and its members instead of jeopardizing this crucial relationship.

After all, European countries shouldn’t forget that close economic ties run both ways: the EU is China’s most important trading partner. China needs the EU bloc economically and geopolitically in its competition for global leadership with the United States. As Brussels works to rebalance its economic and political relationship with Beijing, leveraging the EU’s economic power should be part of the solution.

The post Exposure to China: A Reality Check appeared first on Berlin Policy Journal - Blog.

By winning 365 of the 650 parliamentary seats, Boris Johnson’s Conservatives have changed Britain’s political landscape for the next five years, possibly for the next decade. After the last three to four years of knife-edge votes and parliamentary paralysis, the coast will be clear for them to introduce whatever legislation they wish.

The 80-seat majority at the December 12 election was at the very top end of predictions, indeed beyond the expectations of most Tory strategists.

Johnson will move quickly. He will have learnt the lessons of Tony Blair, who failed to capitalize on his landslide in 1997. Brexit will take place on January 31, this time without any last-minute hiccups. A budget will be introduced in March that is likely to include spending commitments on the National Health Service and infrastructure, particularly to reward his new-found voters in the North of England and the Midlands. Expect also early decisions on a series of ideologically driven challenges to the civil service and the BBC, two right-wing pet hates.

A detailed analysis of the results suggests, however, that overall support for the Conservatives is by no means as comprehensive as may initially have seemed.

Leave United, Remain Divided

Their big margin of victory can be attributed to three factors—the demographic particularities of Brexit, the electoral system, and clever strategizing.

Brexit: the Conservatives were clear winners in constituencies that voted Leave in the 2016 EU referendum. They won almost three quarters of all these seats. The writing was on the wall for pro-Remain groups when Nigel Farage’s Brexit Party announced at the start of the campaign that it would not compete in constituencies that the Tories were defending.

The Leave caucus found itself united. By contrast, the Remain one was not. Some small-scale alliances were formed involving the Liberal Democrats, Welsh nationalists, and Greens; but these were marginal and had very little effect. The fact that the Lib Dems (who had advocated revoking the original Article 50 decision) and Labour (who couldn’t quite work out what its position was) fought furiously against each other was a gift to Johnson.

As a result, the Remain vote was split, with a crowded field of parties sharing the seats between them.

The Conservatives won an impressive 294 of the 410 seats that had opted to get out of the EU. Labour secured only 106, in spite of Jeremy Corbyn’s refusal to accede to the demands of most of his parliamentary party to endorse a second referendum.

Corbyn Trumped Brexit

His equivocation on the issue didn’t do him an enormous amount of good on the other side of the divide either. Of the 240 seats that had a majority opting to remain in 2016, Labour won only 96. The Conservatives trailed, but not by much, with 71, confirming the assertion that Johnson’s role in securing Brexit was regarded as less of a threat to voters than the prospect of a Corbyn government. In heavily pro-Remain Scotland, the SNP pro-independence and pro-EU party won a hugely impressive 48 of the 59 seats available.

The constitution: Britain’s first-past-the-post electoral system was designed to ensure “strong” government. This is in direct contrast to, say, Germany or other countries, where consensus is regarded as the goal. That is why the UK has had so few coalitions. Even though the one it had between 2010 and 2015 involving the Conservatives and Lib Dems was stable, conventional wisdom has been hostile to any change in the way votes are distributed.

One can understand why any governing party would be resistant. The winner has a disproportionate amount of power. On a purely proportional system, the UK would have had a hung parliament, and the Tories’ 43.6 percent share of the vote would have required them to try to create an alliance with another party. The Lib Dems and Greens have long been the biggest losers in the present system. This time was no different.

The message: Conservative strategists realized long before Johnson called the election that they did not need to be popular. They needed merely to emphasize the unpopularity of Corbyn. The plan worked perfectly. Labour had their worst return of seats in any general election since 1935. They fell backwards in every region of the UK, declining by an average of 8 percentage points. In the northeast of England, their previous heartland, they shed 13 points—almost all of the swing going to the Tories. Even in the most affluent London and the southeast, they lost over 6 percentage points—mainly to the Lib Dems.

The following figures perfectly demonstrate the unfairness of the system. The Lib Dems gained an extra 4 percent of voters, yet lost one seat, ending up with a paltry 11. The Greens and the SNP went up too. The Tory vote only increased by 2 percent overall, but in spite of that small rise, they are seen to have triumphed.

Thanks therefore to a skewed voting system, an unpopular Labour leader, smart Tory strategy, and the failure of pro-EU parties to unite, the UK faces a long period of hegemony by a right-wing populist-nationalist party voted in by less than half of the population. That is the depressing state of Britain’s constitution and political culture.

A More Diverse Parliament

Yet some other data suggest that long term trends may be different. Northern Ireland, on the front line of the Brexit battle, now has for the first time more nationalist than unionist MPs. Parliament will have a record 63 members who come from an ethnic minority, an increase of 11 from two years ago. And a total of 220 women have been elected. This is 12 more than the previous high of 208 in 2017 and constitutes just over a third of the total number. Labour and the Lib Dems have more female than male MPs.

A more diverse parliament, just like a more diverse corporate boardroom, is a good thing in itself. Whether it produces a different mindset is much harder to say.

What is clear from these results is that the United Kingdom is a patchwork of voters with very different backgrounds and priorities. That one party and prime minister have acquired unbridled power, in effect able to do whatever they like for a minimum of five years, is the most dangerous of the many quirks in the British system.

The post Europe by Numbers: A Very British Election appeared first on Berlin Policy Journal - Blog.

Europe’s Lack of Military Transport Aircraft; sources: IISS, EDA

The German Defense Minister’s proposal for a protection zone in Northeast Syria, voiced just after Turkey and Russia reached an agreement in Sochi that allowed Turkey to invade the north of the country, met with a lot of criticism within Germany and abroad. Indeed, Annegret Kramp-Karrenbauer left out the details. How did she imagine such a mission playing out?

On top of that, it was too late for the mission: now that Turkey and Russia already have forces on the ground in northeast Syria, the situation has become quite difficult. On the one hand, the Europeans cannot push them out because doing so would require threatening the use of force against Moscow or Ankara. Europe is unlikely to do that. Yet running the mission jointly with Russia or Turkey would only provide a fig leaf of de facto recognition for Turkey’s plan for ethnic cleansing in northern Syria and Russia’s support for Assad’s reign of terror. This needs to be avoided both for moral and political reasons. If the proposal had been in 2018, after Trump expressed his desire to leave Syria and abandon the theater, the proposal would have been more interesting—and perhaps more feasible.

But how practicable is such a proposal really? It is worth digging a bit deeper into what such a mission would have meant for Europe, whether in 2018 or 2019. Could the Union’s member states have replaced the US in Syria as guardian of the Syrian Democratic Forces (SDF)? What would it have meant for European capabilities? The Syrian civil war has raged since 2011. While the refugee crisis in 2015 shook the political landscape in Europe, the war continued another 5 years without the Europeans coming to terms with what to do and how to do it. Although the war now might end with the victory of the Assad regime (and more refugees fleeing repression), Syria is not be the only unstable country in the Middle East and North Africa. Iraqis are protesting en masse. Algeria has to manage a transition of power. Egypt is only stable due to severe repression. Before 2015, the rationale of the German elite was that the traumatic experiences of World War II, in other words the prevailing pacifist and anti-interventionist political environment, would make it easier for Germany to accept one million refugees than to send 1,000 soldiers abroad into a risky combat operation. After the sharp rise of the AfD and the political turmoil the crisis caused in other European states, this rationale may no longer be valid. Thus the “what if” game is a useful exercise to remind us what could be done and what could not.

Shape and Ambition

Before one can determine whether the Europeans could have pulled out such a mission, one needs to think about what would the force have to look like and what the determining parameters would have been. The protection force would have to have multiple aims: to ensure the survival of the SDF and a non-Assad governed Northeast Syria, to deter both Turkey and Russia from an armed incursion, and to provide security assistance to fight Islamic State fighters and other insurgent groups.

The American military footprint in Northeastern Syria was relatively small—1,000 to 2,000 special forces that trained and advised local SDF fighters. However, in order to take over this mission, the Europeans would have had to deploy substantially more forces on the ground to perform the same function. Why? First, because American firepower is outsourced to the US Air Force—which has bases in Kuwait, Turkey (although no strikes are launched from there), United Arab Emirates, and Qatar—and the US Navy, which has a carrier presence in the Mediterranean and the Persian Gulf. It can call in heavy strategic bombers from overseas bases—an asset Europeans don’t have. And more importantly, it conducts continual (electronic) reconnaissance flights from these bases, using both unmanned and manned aircraft to gain as much situation awareness as possible. Europeans do not have these assets, or only in very limited numbers. They would then have to rely on physical presence on the ground to be aware of new developments and threats, and they need conventional ground-based fire support to make a punch (tanks, artillery). Increased physical presence also means more logistics on the ground, and in a counter-insurgency theater, such logistical movements need to be protected against mines and ambushes, again expanding the number of ground forces needed to do the same job.

What’s more, the United States is an offshore balancer that can draw in sizable forces from beyond the horizon if necessary. Russia would ultimately risk nuclear escalation if it engaged US forces in serious manner. Hence even a very limited number of US troops would be able to deter any Russian-Turkish military incursion into Syria. By their mere presence, they create “no-go” zones for Moscow and Ankara. With European powers, things are not that clear. They might considerably hurt Turkey in the case of confrontation, but not at least because of the refugee issue, Erdogan believes he has as much leverage over the Europeans as they have over him. Russia could out-escalate any conflict with minor nuclear powers in Europe, although it is still be doubtful whether Moscow would really want to risk such an escalation over Syria (probably not). Still, the Europeans would have to field heavy forces, including a sizable number of armored maneuver forces into the theater to successfully deter an armed incursion by one of the neighboring states. This force could not just be the usual peacekeeping force. It would have to be able to stand its ground in major fights, such as those between US Special Forces and Russian-mercenary led Syrian forces in May 2018.

What Would the Mandate Be?

The mandate would have been another issue. Since Russia and China have continuously blocked any UN presence in Syria (including fact-finding missions on chemical weapons), such a mission would have to be carried out without a UN mandate. One way to legitimize a military presence in Syria without an UN mandate would be to recognize the SDF leadership as legitimate government and seek its consent. However, that would probably spark a Turkish full-scale invasion to start with, as preventing exactly this is Erdogan overall war aim. The third option would be to cite Europe’s responsibility to protect, as the extension of the rule of both Assad’s regime or Erdogan’s Turkey over the region would have dramatic consequences for the civilian population. While it is possible to make this, one should not believe that all European member states would follow this line and contribute troops. Even in Germany, where the idea originated, the political establishment would have to fight an uphill battle. And most smaller states would probably decline to send troops under any circumstances (their contributions usually are only symbolic, so in the end it would hardly matter).

Logically, the European force could not deploy and supply itself via the shortest and most convenient route, through Turkey. Doing so would create a logistical Achilles heel and make Europe politically dependent on Ankara—think of how the West has had to go through Pakistan to supply forces in Afghanistan. If Israel and Jordan granted the Europeans the right to fly over their territory (which is likely as neither Tel Aviv nor Amman has much interest in strengthening Assad in Syria) and conduct air operations from Jordan, there would be an air-bridge close to the theater of operation. But the bulk of the mission would need to be deployed and supplied via Iraq. The theater of operations in North-Eastern Syria does not have a large operational airport (Dei es Zur is on the other river-bank). Therefore, due to the lack of transport aircraft, the heavy equipment would have to be shipped to Kuwait via the Suez Channel and then transported via the land route. And those transport ships would have to be leased from the private sector or the US Sealift Command because Europeans do not have capacities on their own.

The Numbers Don’t Add Up

Do the Europeans have enough forces to mount the mission? Well in theory yes, but it would still be tricky. According to the European Defense Agency, EU member states have 405,000 deployable land force soldiers. On paper only of course! Unfortunately, the most recent data set compiled by the EDA does not list the troops per country. The 2013/2014 booklet was the last to cite numbers for each country and hence provides an opportunity to check the numbers.

Overall, 276,395 land forces soldiers were deemed deployable in 2014, but due to reorganization in their armed forces, Italy and Germany at the time did not provide numbers. Both are professional armies, and assuming they would declare the bulk of their land forces deployable, the figure could well end up at 400,000. But that also illustrates how useless this number is, as no country would be willing or able to commit its entire army to one mission. Still, one should also look at the Eastern-Flank armies like Poland, Romania, or Sweden: their number of deployable troops plummeted in 2014, because most—even high readiness troops—got re-assigned to tasks of national deterrence and defense. This is a limited factor that needs to be taken into account: these states will keep the bulk of their forces, and particularly heavy, mechanized forces in their own country and not send them abroad – they simply fear a Russian incursion into their own country more than a Russian incursion into Eastern Syria.

Another, more useful number is that of sustainably deployable land forces. As there needs to be an alternation between training/formation, recreation, and deployment, only a limited number of soldiers can be deployed at the same time. This number should indicate how many forces a country could deploy over longer periods of time in a theater. In 2016, the 94,000 soldiers were earmarked as sustainably deployable. In fact, for many countries (like France, Germany, or the United Kingdom) this number represents the maximum number of personnel they could possibly deploy. During the heyday of Western interventionism in 2008, when most European soldiers were deployed, the EU member states mustered roughly 80,000 deployed soldiers, particularly in Iraq and Afghanistan. In 2011, 71,000 soldiers from EU member states were still deployed abroad. But since then, defense budgets have plummeted due to financial difficulties, and in 2014 additional tasks of deterrence, reassurance and national defense against Russia were added. So while the number cited above looks fine on paper, the actual number of deployable troops will be considerably lower.

Again, a look into the 2014 data set provides an overview over the national distributions. Assuming roughly 20 percent of German and Italian forces are sustainably deployable, adding them would give us approximately the numbers of 2016. Hence one may assume that between 2014 and 2016 (and most likely now), there was very little change as armed forces are quite large bureaucratic apparatuses.

This has to be measured against existing commitments. In 2016, EU member-states had 35,000 soldiers deployed in missions. Existing missions could hardly be abandoned, so any new mission would have to come on top.  Again, comparing this to 2014 figures (if the German deployments were added, it would add up to roughly the same number), one can see the heavy commitment of France in particular to missions in Africa. The drawdown of troops in Afghanistan has, though, likely made more UK troops available.

Another problem would be the composition of these forces. Most deployable forces of smaller nations are light infantry units best suited for peacekeeping. They would be rather ornamental contributions in this scenario, without much practical value. Special forces would still be useful to fight ISIS, paratroopers, marines, and other elite-infantry units good at training and advising local SDF fighters. But then there is the issue of who would commit heavy armored forces to deter Russian and Turkish incursions. This would not only be the most expensive deployments; these forces would also face the greatest danger.

Here, only France, Germany, the UK, Italy, and Spain have heavy mechanized forces that are not immediately committed to national defense tasks. But given the dire state of real readiness (in contrast to strength on paper) of the Bundeswehr and the Spanish and Italian armed forces, as well as the already high commitment of French forces, it would to a large extent come down to London’s willingness to commit forces.

When it comes to the air war, the situation is similar. On paper, the EU has enough fighters. But in practice, the air forces of smaller nations are only capable of domestic air-policing. They are not meant to be deployed. Those air-forces who do have the capabilities to fight and be an effective air-support force in Syria already have existing commitments in many overseas territories. And aircraft and their crews need to rotate too.

Lacking Air Power

Nevertheless, judging purely theoretically, on the basis of readiness, roughly 180 tactical fighters (Eurofighters, F-16, Mirage 2000, Rafale, Tornados, F35) could probably be scrambled across the entire continent for an air campaign. Here the availability of airbases would be the most restraining factor. Only France has an aircraft carrier with full strike capability; all other planes would need to be based in Cyprus (extensively air-refueled), Jordan, Iraq, and with air-refueling, in the Gulf. So in fact there would be fewer fighters used, but Europe could provide them.

But the status of other key enabling factors is weaker. Only the UK has (a handful of) C-17 Globemaster transport aircraft, which can carry a battle tank. With 50 percent readiness assumed for the A-400, 57 of them could transport other armored vehicles. The various C-130s have a lower payload and would only be suitable for light vehicles and follow-on supplies. Hence the bulk of the force would have to deploy by ship. This would take time and would give Russia and Turkey the opportunity to preempt such a mission.

Air refueling is an even bigger bottleneck. Assuming that heavy-loaded transports and fighters from distant bases need mid-air-refueling to transit to the theatre of operations, and assuming 60% readiness for its tankers, Europe could muster 15 A-330 MRTTs, and 2 KC-767s, and if France’s deterrence forces can spare it, then a single KC-135. Most of these aircraft would be British. Europe is even more reliant on London in terms of electronic reconnaissance aircraft and drones, where the UK either has unique capabilities or French counterparts are already committed. Still, even if London did weight in, it could only muster a tiny fraction of what the United States currently fields in the Middle East.

Now while this is just an approximation based on available data (EDA defense data and the IISS Military Balance 2019), the exercise is worth doing just to remind Europeans how precarious the situation regarding power projection and deployment is. Europe’s shortfalls on intelligence, surveillance, reconnaissance, air-transport, mid-air refueling, drones, etc. have been known for decades. But grand speeches about European strategic autonomy, a European Defense Identity, and a Defense Cooperation do not provide these assets—only hard money in procurement budgets does. Given the continuous unrest in the Middle East, the unreliability of the commander in chief in the White House, and the specter of Brexit, one should look twice at this theoretical game-play and ask oneself whether Europe can still afford to just muddle through in defense matters.

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Although it was largely absent from the European election campaign, the negotiations over the next so-called Multiannual Financial Framework (MFF)— the EU’s budget—will take up a prominent place on the European agenda in the coming months. The European Council and the European Parliament have just 18 months to reach an agreement on the next seven-year MFF, and this has to be done in parallel with the finalization of 45 regulations that provide the legal basis for the various EU spending programs.

Agreeing on the EU’s budget has always been difficult, but the current MFF negotiations are particularly tough. The post-2020 budget has to make up for the Brexit gap caused by the United Kingdom’s departure, a financial shortfall estimated at €84-98 billion over seven years. It can do this either by making unpopular cuts to cherished programs (agriculture, cohesion policies, etc.), getting larger contributions from the member states, or both.

On top of that, the EU is confronted with new spending needs in areas such as migration and border control, external security, and digital transformation, which require anything between €91 and €390 billion of additional resources between 2021-2027, according to the commission.

Member States Are Digging In

The outgoing commission led by Jean-Claude Juncker did a good job in trying to “square the circle.” The original MFF proposal, presented in May 2018, offered an intelligent political compromise to member states. Richer countries would agree to moderately increase their contributions to the EU budget to keep EU spending for the remaining 27 member states roughly at the same level (in real terms) after Brexit.

Poorer countries, in exchange, would consent to a certain degree of spending re-allocation, with significant increases in new spending priority areas (an 80 percent increase for security and defense, a 160 percent increase for migration and border control, a 60 percent increase in research, innovation, and digital), and moderate increases or reductions in cohesion and agriculture (+6 percent and -4 percent respectively).

Finally, new sources of revenue, such as a small levy on corporate profits and a share of the proceeds from the EU Emissions Trading System, would be introduced to make the numbers work and partially offset the impact of Brext on member states’ net contributions.

The commission’s balanced proposal, however, has failed to change the dynamics of MFF negotiations in the European Council. After roughly one year of discussions, various net-payer member states made clear their opposition to any increase in net contributions. Meanwhile, the countries that benefit most from agriculture and cohesion funds have built up coalitions to preserve the existing envelopes in these two areas, and a majority of member states continue to reject any reform of the system of EU own resources. There is thus a strong risk of ending with a European Council compromise on an EU budget close to 1 percent of EU GDP, with no increases in new spending areas and agriculture largely preserved from cuts.

One crucial factor is the new European Parliament’s reaction to the council proposal. An absolute majority of elected MEPs must approve the MFF. In a more fragmented parliament, obtaining this majority could be difficult, particularly if the council comes up with a not-so-ambitious proposal.

An Opportunity

This leads us to another, related factor. A particularity of the current MFF negotiations is that they coincide with a change in the EU executive. This is in fact the first time this has happened since the creation of EU multi-annual financial frameworks in 1988—and it offers an opportunity for the new EU commission to try to align EU spending with its political agenda.

The Juncker commission did not get this opportunity. It took office in November 2014, less than a year after the adoption of an EU multi-annual budget covering its entire executive term (2014-2020). As a result, it had very little capacity to influence EU spending choices and had to struggle to finance one of its main flagship priorities, the “Juncker investment plan.”

While the Von der Leyen Commission cannot remake the MFF proposal from scratch, it will have some leverage on MFF negotiations if it allies with the parliament. The commission and MEPs can also work to introduce some modifications to the 45 legal regulations that are the basis of the various EU spending programs. For some of these programs (for instance, the new EU research program Horizon Europe) there is already a partial agreement between the council and the parliament, but as long as the regulation has not been formally adopted, the new parliament is not legally bound on issues agreed by the previous parliament and can always re-open the agreement. In other cases (for instance, the Common Agriculture Policy) neither the parliament nor the council has taken a position, and thus it is easier for the parliament and the new commission to introduce changes to the original proposal.

The question is how much appetite Ursula von der Leyen’s commission will have to modify the MFF proposals tabled by its predecessor. Von der Leyen has taken various positions in her wide-ranging candidature speech to the European Parliament. Some of them have no budgetary implications—for instance, completing the Capital Market Union or relaunching the Dublin asylum rules reform. Others do not imply a major break with the budgetary proposals tabled by the previous commission, like the creation of a Budgetary Instrument for Convergence and Competitiveness for the eurozone.

Testing Times

In some areas, however, von der Leyen has called for budgetary changes that would require amendments to the existing MFF proposals. An example is the promise to triple the Erasmus+ budget, as requested by the parliament (going beyond the Juncker Commission’s proposal to almost double it), or to create a European Child Guarantee to combat child poverty.

Another area in which the new commission’s ambitions may require new or different funding is on climate. Achieving climate neutrality by 2050, a goal endorsed by the von der Leyen, will not be possible without significant additional investments in energy and transport, a major disinvestment in fossil-fuel energy and high-carbon infrastructure, and a serious commitment to support territories and individuals most affected by the transition.

No-one knows yet what will be included in the “sustainable Europe investment plan” announced by von der Leyen, but she has already committed to set up a “Just Transition Fund” to support people and regions most affected by the energy transition, an idea which is cherished by the parliament but not included in the Juncker Commission’s MFF proposal. It is also possible that the new commission backs the parliament’s demand to increase the percentage of EU budget funds dedicated to climate action from 20 to 30 percent (instead of the 25 percent proposed by the Juncker Commission). This would require, in turn, re-adjusting the specific climate engagements set for the different programs and funds.

MFF negotiations may well be the first “litmus test” for Commission President von der Leyen. If she is capable of partnering with the new parliament and delivering on her budgetary promises, she will demonstrate to her critics that she has the necessary skills to head the commission—of which only a small majority of MEPs were convinced back in July.

The post Europe by Numbers: The Von der Leyen Budget appeared first on Berlin Policy Journal - Blog.

Source: EuropeElects

With Germany’s political landscape in upheaval, observers of German politics may be excused for thinking that the world is caving in.

In late May, the troubled Social Democrats (SPD), one of the main political parties both in Germany and in Europe’s wider center-left, suffered a disastrous double blow that underscored the party’s existential crisis. The Social Democrats won only 15.8 percent of the vote in the European Parliament elections, down from 27.3 percent in 2014, finishing behind the Greens for the first time ever in a national election. On the same day, the SPD failed to top the poll in Bremen, coming second to Angela Merkel’s center-right Christian Democrats (CDU) in the northern state it has governed for more than seven decades. Shortly afterwards, party leader Andrea Nahles announced her resignation after just a year in office.

The SPD’s collapse has been accompanied by the rising fortunes of the German Greens, who won nearly 21 percent of the vote in the European elections—double their previous result. Crucially, the Greens won the youth vote. Among those under 25, the Greens attracted more voters than the combined tally for the SPD and the CDU, together with their Bavarian sister party the Christian Social Union (CSU). The success of the Greens and the losses of the governing parties were well predicted in the polls, but the results are still bewildering. Opinion polls conducted since have even seen the Greens pushing ahead of the CDU/CSU to 27 percent, making them the main center-left force and the most popular political party in Germany for the first time in history.

The “Greta Effect”

The crisis of the Social Democrats and the rise of the Greens are not unique to Germany, though both effects are particularly strong there. The overall European picture after the elections is marked by a curious divide: In several countries in the north and the center of Europe, the Greens have successfully taken votes away from Social Democratic parties; whereas in the southeast, the Social Democrats seem to be recovering, and the Greens have not done particularly well.

In a similar trend as in Germany, the British Labour Party, the Romanian PSD, and the Austrian SPÖ all suffered disappointing results. The French Socialists (PS), which secured 14 percent of the vote in the 2014 election, were nearly obliterated. In contrast, the French green party EELV surged to a surprising third place, scoring from 8.9 percent to 13.5 percent of the vote. The Greens also reached double figures in several other countries, coming in second in Finland and third in Luxembourg. In the United Kingdom, the Green Party finished ahead of the ruling Conservatives with a score of 11.8 percent. Ireland’s Green Party’s vote trebled in comparison with the 2014 elections, putting it in line to send representatives to the European Parliament for the first time in 20 years. Greens in Denmark, Belgium, and the Netherlands also did well in the wake of recent electoral successes in regional polls, as many young voters increasingly turn away from the center-left to vote for the environmentalist parties.

Only a couple of years back, opinion polls suggested that the Greens were going to see their support halved in the European Parliament. Instead, their total of seats has now gone from 52 to 75, pushing them into a position of influence. Analysts explain this “Green wave” with the “Greta effect,” referring to the teenage Swedish climate activist, Greta Thunberg. What is certain is that Green parties have benefited from the fact that it was climate change, rather than migration, that dominated the political agenda and the election campaign in many countries.

Europe’s Southeast is Different

Yet not all member states have been hit by the green wave. In fact, it was largely confined to countries in north-western Europe. The Greens’ gains there masked losses in Austria, Spain, and Sweden in the European elections, and the total wipeout of Green MEPs in Croatia, Estonia, Hungary, and Slovenia, leaving the Green group unrepresented in 12 out of 28 member states. Indeed, most Green parties across the EU failed to make significant gains compared with 2014.

With a few exceptions, Green parties have not been able to consolidate their presence in the south and east of the EU, “a political reality that even the latest wave of stunning European electoral success has not changed,” according to an analysis by the economic news service Eurointelligence. The Greens won no seats in Eastern Europe and only a handful in southern Europe, where a number of Social Democratic forces have co-opted environmental concerns into their platforms, and thus resisted the green trend, including the main center-left parties in Portugal, Spain, Malta, and Italy.

In Spain, a decisive win for the center-left PSOE, taking 33 percent of the vote, seems to provide evidence of a recovery. This result has made the PSOE the largest national delegation in the S&D group, with 20 MEPs, ahead of the Italian Democratic Party (PD), which is also starting to climb back up according to the latest polls. In Portugal and Malta, the governing parties of Prime Ministers António Costa and Joseph Muscat won by a landslide with 33.4 percent and 54.3 percent of the vote respectively. Polls predict an even bigger win for Portugal’s Costa when he stands for re-election in the fall. The Danish center-left Social Democrats also won the European elections and the subsequent general election held on June 5, though the party’s focus on a more restrictive immigration policy is probably not a model for Europe’s other Social Democrats in crisis. Nonetheless, their win is the third in less than a year for center-left parties in Nordic countries after successes in Sweden and Finland.

Environmentalism may primarily be a concern in north-western Europe, and the Social Democrats may yet experience a comeback in other countries and regions of the the EU. Nevertheless, it is likely that this moment will be remembered as a turning point for the Greens: for the first time, they have taken a place among the big players in the European Parliament.

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EuropeElects; Data as of April 24, 2019

From May 23 to 26, 2019, voters across the European Union will head to the polls to elect a new European Parliament. With party politics undergoing a revolution at the national level and uncertainty over the future of the United Kingdom’s withdrawal from the EU, the European elections come at a pivotal time. How will these elections change the EU’s political and institutional dynamics? It’s up to the EU’s 400 million voters (not counting Britain) to decide.

Will the Center Hold?

The elections will likely end the long era of big party dominance of the parliament’s business and of its committees. Mainstream center-right and center-left parties have traditionally retained a comfortable majority in the EU’s main institutions, including the European Parliament. Now, however, the populists are on course to make big electoral gains that could disrupt the Christian Democrat/Social Democrat tandem that have run the chamber for over 40 years.

Rising socio-economic inequalities and the divisive 2015 migration crisis have had a damaging effect on the public’s trust in political leadership. Consequently, disaffected voters are increasingly casting their votes in favor of anti-establishment candidates who promise radical change. If the recent national trends continue, both the center-right European People’s Party (EPP) and the center-left Socialists and Democrats (S&D) are expected to lose many seats.

According to the latest data from Europe Elects (and assuming UK participation), the EPP will come in at 180 seats—a net loss of 41. It will, however, remain the parliament’s largest political group. The S&D is predicted to lose almost as heavily, with a drop of 30 to only 161 seats.
For the first time, the EPP and the S&D then may fail to jointly command a majority, which could empower other groups, especially the liberal ALDE, which is projected to become the third largest grouping. The Europe Elects model projects 104 seats for ALDE, should French President Emmanuel Macron’s projected 23 MEPs from La République En Marche join the group.

The question then arises as to whether the centrist parties will manage to agree on the most important topics. In the new parliament it will likely become more difficult to garner enough votes to pass legislation. While this may decrease the parliament’s legislative efficiency, the pro-EU political groups will still command a clear majority due to the Liberals and the Greens/EFA, who are set to win 51 seats. However, with the right-wing populists surging, all centrist parties will have to pull together to guarantee the regular functioning of the Parliament.

No Business as Usual

A number of reasons make us assume that the European Parliament will be less governable after the elections.

First, it is very difficult to predict the composition of the right-wing political groups after May. At a news conference on April 8, Italy’s Interior Minister and Lega leader, Matteo Salvini, announced his plan to form a new right-wing alliance called the European Alliance for People and Nations (EAPN), which would draw members from existing right-wing groups, among them the far-right Europe of Nations and Freedom (ENF) alliance. Traditionally divided, the populist right will aim to join forces to challenge the power of the governing bloc.

It is too early to say how much influence the new grouping could have, but a strong performance of right-wing populist parties could shake up the dynamics inside the European Parliament. Assuming that all ENF members—which is currently projected to win 62 seats—join the new group, EAPN may be in contention to beat out ALDE and become the third largest parliamentary group, at 85 seats. The right-wing populists would thus be far from commanding a majority, but the resulting polarization may cause uncertainty for policy-making and risks paralyzing the EU.

The creation of EAPN will also lead to the breakup of the right-wing populist Europe of Freedom and Direct Democracy group, which was already likely to collapse following the departure of the British MEPs, and the shrinking of the conservative ECR group (64 seats projected). This would leave large parties like Italy’s Five Star Movement (M5S) and Poland’s PiS in search of new allies, and potentially able to tip the balance of the new parliament. With 49 seats (projected), the left-wing GUE/NGL group will likely repeat its performance of 2014.

These numbers assume that the UK will not leave the EU before May 23. UK participation will prevent the planned reduction from 751 to 705 MEPs—and an eventual UK departure would weaken the social democrats, possibly bringing them down to their worst result in EU history.

Indeed, an average of polls compiled by Europe Elects shows that the UK Labour Party is likely to win a landslide should the UK participate, picking up around 30 seats. Labour would then represent the largest national delegation in the S&D group. This would help close the center-left’s gap with the EPP, which would not gain a single seat from British participation, since the UK has no EPP party.

This swing could even be enough to tip the balance of power in favor of a progressive alliance between the S&D, ALDE, the Greens and parts of the radical left (the GUE-NGL group is more likely to make small losses than gains in May), sending the EPP into opposition for the first time. The UK participating in the European elections would have a disruptive impact, on Brussels as well as Westminster.

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“Freedom of movement for workers shall be secured within the Union,” says the Treaty of Lisbon. This is a core pillar of the EU’s single market and a less controversial issue outside of the Brexit debate, where even former prime minister and liberal Remainer Tony Blair has questioned the fairness of letting EU citizens hunt for jobs in the UK without any “emergency brakes” that go beyond the current qualifications.

The details of freedom of movement change from time to time: in April 2018, for example, French president Emmanuel Macron led a push on the EU level to reduce the amount of time that “posted workers” can work in a member-state without abiding by the (usually more stringent) local labor or pension standards. There are also restrictions on when EU migrants can claim welfare benefits. But the principle of allowing EU foreigners in to work is generally accepted, even if some people consider it a necessary evil of the single market. While Europeans do, in the aftermath of the refugee crisis, tend to want fewer immigrants in general and those already here to integrate better, only 29 percent of respondents in the Spring 2018 Eurobarometer poll said they had a “negative feeling” about intra-EU migration.

So much for receiving countries. The debate is somewhat different in the member states whose citizens are trying their luck abroad. That’s because of one buzzword: “brain drain,” or the emigration of skilled or qualified people.

According to the latest figures from Eurostat, in 2017 six EU member states had more than 10 percent of their working-age population working elsewhere in the EU. Romania (19.7 percent), Lithuania (15 percent), Croatia (14 percent), Portugal (13.9 percent), Latvia (12.9 percent), Bulgaria (12.5 percent)—these are mostly eastern member states and less well off than the EU average. While the stereotypes may be of Polish cleaners seeking higher wages abroad, mobile workers in the EU are more likely to have tertiary education than the resident population.

Other statistics help paint the picture of what is happening in central and eastern Europe, where emigration is high, birth rates are low, and pensions are a huge burden on the social welfare state. The Economist points out that tiny Latvia’s working-age population has fallen by a quarter since 2000. Bulgaria’s population, nearly nine million in 1989, had shrunk to 7.1 million by 2017, creating a massive shortage of qualified labor in the country.

Better Than Walls

The “brain drain” issue is seeping into the politics of these sending countries. At a Visegrád summit in 2016, Polish President Andrzej Duda said, “We must stop the wave of emigration … that makes so many talented, creative young people leave our countries.” Poland, like several of its neighbors, has a program to encourage citizens to return and help them with jobs and housing.

One reason that Viktor Orbán’s Hungarian government recently passed a controversial law giving businesses the right to force employees to work up to 400 hours of overtime per year was that nine percent of the working-age population is abroad, and that Orbán has no interest in allowing non-EU migrants to take their places. Audi workers in Hungary successfully demanded an 18 percent raise in February, showing how much bargaining power they have amid a labor shortage. Meanwhile, the Romanian finance minister Eugen Teodorovici has even called for the introduction of a non-renewable, five-year permit for Romanian citizens to work in another EU country.

But there are also real benefits of skilled labor mobility from the perspecive of a sending country. Portugal, for example, was grateful during this decade’s financial crisis that some unemployed Portuguese could try their luck in the stronger economies of Europe’s north until things improved at home. Mobile EU workers may send remittances home, or return later to start businesses, or make personal and business connections that strengthen the bonds between their home country and its European neighbors. For the workers themselves, freedom of movement is a beautiful thing—indeed, minister Teodorovici was quickly forced to walk back what he called an “ill-formulated proposal.”

The fact that a Romanian nurse or Greek data engineer can move to France in search of better wages is literally the point of a free market in a free, integrated Europe, as is the ability of workers in countries prized for their cheap labor to demand better compensation. Economists tell us that labor mobility is a prerequisite for an optimal currency area, as it helps prices and wages adjust in member states bound by the euro. Difficult as things are in the Polish towns whose young and educated have left, today’s situation is vastly preferable to using walls and visa requirements to stop Europeans from living where they want.

Perhaps it’s illustrative to think of EU brain drain in the context of worldwide migration trends. All across the world, people are moving from poorer, rural areas to the metropolises where most wealth is created. Many of the brightest and most ambitious will never return, increasing the inequality between winners and losers and straining social services. This is a challenge not only across borders but also within countries. There are towns in northern England and eastern Germany whose young graduates flock to London and Berlin. However, that mobility only shows up in national-level statistics—and no national governments are proposing restrictions on it.

The correct response, then, is not to restrict freedom of movement within a member state or within the EU, but to continue the redistributive and investment policies that aim to make underdeveloped regions more attractive, whether we’re talking about a small town in Saxony or the capital of Bulgaria.

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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: 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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