The COVID-19 pandemic has accelerated many of the trends and dynamics underlying recent geopolitical shifts, a new poll conducted by Koerber Stiftung for a special edition of The Berlin Pulse has found. In fact, from a German point of view, the coronavirus crisis has deepened major cracks in each of the three pillars that have underpinned Berlin’s foreign policy almost since World War II: European integration, the transatlantic alliance, and the export-driven economic model.

Each pillar depends on a rules-based order that is increasingly under threat. Recognizing this, Germany has gone to great lengths to promote a renewed commitment to international cooperation: from new initiatives in the UN Security Council, where the country took up its seat as a non-permanent member in January 2019, to the launch of the Alliance for Multilateralism, Berlin has placed multilateralism front and center of its agenda.

But how are these challenges, and the purported solutions, viewed by the German public, particularly in the context of the pandemic?

First off, Germans continue to feel rather comfortable in a deeply interconnected world. A majority of them believe that globalization has benefited their country (59 percent) and them personally (52 percent, compared to 47 and 49 percent, respectively, in the United States, as data gathered by the Pew Research Center shows). In a similar vein, Germans remain staunch supporters of international cooperation: 89 percent favor cooperating with other countries to solve global challenges (there’s been a slight decrease from 96 percent in 2019). When it comes to international challenges, clearly Germans do not like to go it alone.

However, there are limits to the support for global interconnectedness: a strong majority of 85 percent would like to see the production of essential goods and critical infrastructure like 5G technology returned to German soil, even at the risk of higher costs.

So how do these preferences relate to their views on European integration, the transatlantic partnership, and relations with China?

Conflicted on Brussels, Disillusioned with Washington

On Europe, Germans appear rather conflicted: A plurality of 38 percent say that their view of the EU has deteriorated amid the COVID-19 crisis, compared to 33 percent whose view has improved. While nearly three quarters agree that, given its status as a relatively wealthy country, Germany should contribute more than other countries toward solving global problems, it is not clear how this would pan out in Europe: a majority of 59 percent comes down against so-called “coronabonds”, among the most controversial topics over recent weeks.

Support for European integration becomes less ambiguous where tangible benefits are at stake: for instance, an emphatic majority of 85 percent favors a return to the Schengen Agreement, with no border checks among participating states, once the virus is defeated.

German attitudes toward the transatlantic relationship have taken a significant dive. While skepticism predates the pandemic, the Trump administration’s response to the pandemic has clearly accelerated a feeling of estrangement on the German side: 73 percent of Germans say that their opinion of the United States has deteriorated—more than double the number of respondents who feel the same way toward China. And despite the close security cooperation between Washington and Berlin, merely 10 percent of Germans consider the US their closest partner in foreign policy, compared to 19 percent in September 2019.

US out, China in?

The trend of transatlantic estrangement is further underlined by the fact that the number of Germans who prioritize close relations with Washington over close relations with Beijing has decreased significantly, from 50 percent in September 2019 to the current number of 37 percent, almost equal to the number of those who see it the other way around (36 percent).

So out with the US, in with China? Not quite: Yes, the fact that the public is leaning toward a position of equidistance between Washington and Beijing should worry policy-makers. However, this is not to say that Germans are uncritical toward the People’s Republic. Over 70 percent believe that the Chinese government could have mitigated the pandemic by being more transparent in its handling of the coronavirus outbreak. Neither do Chinese propaganda efforts appear to resonate with many Germans. In contrast to Serbian President Aleksandar Vučić, who in March declared that, given a lack of European solidarity, he was putting all his trust in Beijing, 87 percent of Germans believe that the EU is contributing more to the fight against the pandemic than China.

Negative Effects

So, what does all of this mean for the future of German foreign policy? The benefits of EU membership remain popular. However, the results suggest that the pandemic’s net effect on the EU’s image among Germans is negative. Looking west, the Atlantic seems wider than ever. Data from previous surveys suggest that German perceptions of the US closely correlate with their perceptions of the incumbent president and may thus change again. However, the growing gap between public opinion and official German foreign policy provides openings some parties are willing to try and exploit. Some in Germany’s center-left Social Democrats (SPD), Chancellor Angela Merkel’s coalition partner, recently advocated the removal of US nuclear weapons stored on German soil in the context of the NATO’s nuclear sharing scheme—a policy that is essential to Germany’s role within the alliance. This may just be a taster of similar debates coming up.

And China? A number of German policymakers have repeatedly warned that, wherever democratic states retreat from the international stage, authoritarian states will be quick to fill the gaps. In terms of public opinion, China appears to be on the cusp of filling the vacuum resulting from the waning of US popularity. As experts and politicians alike predict that Germany eventually will be forced to pick a side, Beijing’s growing popularity will undoubtedly complicate such a decision.

As the coronavirus pandemic underlines the urgent need for international cooperation, multilateralism appears to be faltering in both spirit and practice. Germans for one remain staunch optimists about the future of international collaboration, however, with 42 percent believing that the pandemic will lead to an increase in international cooperation. They may be in for a rude awakening.

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Germany’s six month presidency of the European Union in the second half of this year could hardly come at a more important moment. As the EU’s largest and most financially powerful member, Germany must rediscover its earlier role as leader and mediator. By doing so, it can help hold the organization together, something also very much in its own interests.

To do this, however, Berlin must face up to the EU’s conflicts, both internal and external. Germany faces three challenges in Europe, all given new urgency by the coronavirus pandemic. It must reestablish cohesion within the EU, bridging the gaping divide between its northern and southern member states; it must stand up for democracy and the rule of law; and it must strengthening the EU’s international role.

Germany’s six month presidency of the European Union in the second half of this year could hardly come at a more important moment. As the EU’s largest and most financially powerful member, Germany must rediscover its earlier role as leader and mediator. By doing so, it can help hold the organization together, something also very much in its own interests.

The presence of COVID-19 in Europe was confirmed early this year. However, since the EU had no relevant powers in health policy, early countermeasures took place on local, regional, and national levels. Basic freedoms of movement within the EU were restricted overnight, in partial contravention of European law. Twelve countries, including Germany, closed their borders. In early March, Berlin imposed an export ban on personal protective equipment (PPE) for medical staff, while the French government requisitioned face masks. The absence of declarations of solidarity, let alone practical assistance, gave rise to profound political disappointment. The early response, in other words, was dominated by national unilateralism, bringing back memories of the eurocrisis.

However, the EU has shown itself capable of correcting course. Management of the outbreak was quickly taken up at the highest levels, more rapidly than during the financial crisis. The European Commission instituted weekly coordination meetings. There were joint rescue flights for European citizens stranded overseas. Coronavirus patients were transferred between EU countries. Once common rules on exporting medical supplies outside the EU had been established, most governments lifted export bans within the single market. European companies began to manufacture face masks and ventilators, while the Commission introduced the joint procurement and stockpiling of medical materials.

As with the financial and migration crises, the early months of the COVID-19 crisis showed that removing internal EU borders only works when accompanied by policymaking at a European level.

Basic Freedoms at Risk

The EU’s “common area of freedom, security, and justice” was created to support cross-border mobility and interconnection. For this integrated space to survive intact, health protection must be guaranteed as a pan-European public good, with open borders balanced against the need to protect the public.

If common health policy instruments are lacking and national health systems cannot successfully deal with the pandemic, the basic freedoms of the internal market will be cancelled out. Moreover, the EU will lose public trust if it can neither defend against dangers to public health nor come to the aid of struggling member states, helping them to help themselves.

Now, as Angela Merkel put it, the EU must confront “the greatest test it has faced since its foundation.” Insufficient preparedness in public health will now be followed by the continent’s most serious economic crisis since the Great Depression of 1929. All industrial nations seem likely to fall into recession in the first half of 2020, with long-lasting and painful consequences for their social fabric.

In March alone, Spain lost over 800,000 jobs, with unemployment expected to soon approach 18 percent. Italy, too, will likely face unemployment well above 10 percent. In France, after four weeks of lockdown, a quarter of all private sector workers are on reduced hours, with half of the economy at a standstill. The crisis threatens to hit Central and Eastern Europe just as hard.

Strengthening the Economy

Cushioning the economic crisis and the resulting social damage will thus be another crucially important responsibility of the German EU presidency that starts in July. This will initially mean rolling back restrictions on the internal market and ensuring that crisis-driven health policy does not undermine the EU. Some governments will take a greater role in industrial policy, seeking to guarantee essential food supplies and critical infrastructure. This could mean a new wave of nationalizations, as well as a more flexible interpretation of EU subsidy rules.

Despite facing the greatest economic crisis in the history of European integration, the EU needs to develop common approaches and principles in order to minimize national protectionism and reestablish European competition principles once the virus dies down. At the same time, it will be all the more important for a united EU to pursue its own global interests, with member states acting together as a common currency area, as well as on trade policy and investment regulation.

The German presidency must also address the question of additional financial cushioning. Short term liquidity has been made available through the European Central Bank and €500 billion in new financial instruments at the disposal of the European Commission, the European Investment Bank and the European Stability Mechanism. Nonetheless, fresh money will probably need to be put on the table to prevent a resurgence of tensions between northern and southern European states. Negotiations on the EU’s next “multiannual financial framework”—due to be finalized under the German presidency—may see a revisiting of more expensive policies, triggered by the COVID-19 crisis. Any revision to the EU budget would likely prioritize investment in research, technological competitiveness, and health protection, as well as measures against climate change.

Finally, the German presidency will also look to use greater international cooperation to alleviate the negative impacts of national austerity. Defense policy will be one such key area. Uncoordinated budget cuts could weaken the pooling of national defense capacities, as they did in the aftermath of the 2008 financial crisis. For this reason, Berlin will likely encourage its NATO partners and the EU to focus on defense capability, the arms industry, and their general technological competitiveness in light of the pandemic.

Social Resilience

In spite of the financial efforts undertaken by the EU, it is quite possible that the virus’s economic and social effects will promote political instability and undermine social resilience. That will intensify Europe’s vulnerability to hybrid threats. The post-2008 era saw populists, many opposed to the EU and to globalization, take their place in parliaments and even in governments. The Hungarian prime minister Viktor Orbán has used the coronavirus as a pretext to strengthen his autocratic power. Like Hungary, Poland is the subject of an EU investigation, triggered by its judicial reforms. Former Italian prime minister Enrico Letta has warned that his country could become the “Hungary of the eurozone” if Europe fails to offer adequate assistance. Even before the crisis, popular support for the EU in Italy was on the decline. In Spain, the position of Pedro Sánchez’s minority government could be significantly weakened.

At a time of increasing political polarization, weakened social resilience and  burgeoning foreign influence, basic democratic principles and the rule of law must be more actively protected across Europe. Along with existing European procedures against member states, the EU budget will be a key instrument: spending should be dependent on states upholding human rights and democratic principles, in addition to the rules of the internal market. At the same time, we must keep close tabs on how technology is used to monitor the virus, ensuring it complies with basic European rights. The definition of common criteria for ending the state of emergency will be another concern.

Europe’s vulnerabilities will need particular attention if the European economy collapses while China enjoys a comparatively rapid recovery. In a bid to boost its foreign influence, China could make liquidity available to selected European companies, banks, and governments, buying up strategic elements of European supply chains, including in Germany. The question of how much protection the EU and national governments should offer domestic companies will thus be highly political.

The coronavirus has made Europe’s international context even harder to assess. Under Donald Trump, the United States continues to undermine the structures of the international order, for example by the president’s recent decision to stop US funding for the World Health Organization. Meanwhile, reaction to the crisis has sharply highlighted the systemic conflict between China and the West. Its ongoing power struggle with China is taking the United States further down the path of isolationism. But Europe must also think about its own future supply chains, deciding which elements should be based on its own territory, particularly in pharmaceuticals and other systemically vital sectors.

No Way Around Conflict

As the international system continues to gradually unravel, the pandemic has shown the importance of close cooperation on health policy. When Germany takes over the EU presidency on July 1, it faces the acutely important task of driving short-term crisis management in the EU and among its member states. But it must also continue to develop European and international instruments able to cope with the challenges confronting us. The aim should be for Europe to emerge strengthened from the crisis. To achieve this will inevitably mean conflict, both within the EU and in its relations with other countries.

For this reason, Berlin cannot limit itself to the role of honest broker, the typical approach of the country holding the EU presidency. Germany, France, other members states, and the presidents of the various EU institutions must all energetically promote European interests and the core principles of the Union. Only in this way will it be possible to lead the EU through these complex and testing times.

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Isabel Schnabel is no dove. Germany’s nominee for the European Central Bank’s executive board is eloquent and persuasive; she holds strong opinions, and she knows how to make her views heard in a field still dominated by men. As an economist, Schnabel has often sharply criticized the ECB’s policies, especially its controversial asset purchasing program.

Yet the 48-year-old, who is a member of the influential German Council of Economic Experts, doesn’t represent German monetary orthodoxy. She may disagree with specific aspects of the ECB’s loose monetary policy, but she doesn’t oppose low interest rates on principle. Ideologically, she is probably much closer to the bank’s new president, Christine Lagarde, than previous German central bankers have been.

In addition, Schnabel takes a different view on fiscal policy from many mainstream economists in Germany. In the latest annual report of the Council of Economic Experts, which was published in early November, she gave a dissenting opinion on two key issues of budgetary policy: first, she argued that Germany should lower some taxes and increase public investment to support the lagging economy.

Schnabel’s second dissenting opinion concerned the Schuldenbremse or debt brake that sets strict limits on public deficits in Germany. In the longer term, Schnabel said, this debt brake should be reformed to allow for more public investment.

End of the Balanced Budget?

Such views are increasingly popular in Berlin, where the economic slowdown means that tax income is not increasing as quickly as in earlier years. Chancellor Angela Merkel’s coalition of conservative Christian Democrats and Social Democrats (if it survives, which is an open question) will find it much more difficult than in the past to spend its way out of internal disagreements. The days of a balanced budget seem numbered.

This makes Schnabel a very interesting choice for the German government—and a very different one from earlier appointments to monetary top jobs, Jens Weidmann, president of the Bundesbank and as such a member of the ECB’s governing council, and Sabine Lautenschläger, Schnabel’s predecessor on the bank’s executive board.

Weidmann is the ECB’s most outspoken critic of extremely low interest rates. He served as Merkel’s economic adviser before being appointed to the Bundesbank at the height of the euro crisis in 2011.

At that time, Germans—Merkel’s conservative bloc in particular—were deeply worried about the bailout programs that had been set up to save the eurozone. Risking German taxpayers’ money in order to keep spendthrift countries afloat was extremely unpopular. In that context, a Bundesbank president with strict views on monetary and fiscal discipline seemed like a last line of defense.

Lautenschläger joined the ECB’s executive board three years later, in 2014, when Spain and Portugal had already managed to exit the bailout programs, but Greece and Cyprus were still regarded as vulnerable. Again, Berlin chose a proponent of monetary and fiscal conservatism.

During her time at the ECB, Lautenschläger was as fiercely opposed as Weidmann to continuing the bank’s policy of easy money. While both did have some allies on the governing council, notably the central bank presidents of the Netherlands and Finland, the majority of southern European countries generally backed outgoing president Mario Draghi’s policies.

A Constructive Influence

Lautenschläger stepped down at the end of September, three years before the end of her term, following an ECB announcement that it would lower interest rates even further and resume its controversial asset purchase program. Draghi had pushed through those decisions just six weeks before the end of his mandate, causing an outcry in Germany.

At the time, Schnabel was still a professor at Bonn University, albeit a specialist on eurozone reform and banking regulation, and had no inkling that she might be asked to join the ECB in the near future. Yet in an interview with the business daily, Handelsblatt, she strongly defended the central bank.

“Of course, you can disagree about specific measures,” Schnabel said. “But if politicians, journalists and bankers reinforce the narrative that the ECB is stealing German savers’ money—that’s dangerous. It will come back to haunt us one day.” Schnabel pointed to Britain, where the EU was used as a scapegoat for many years. This was now leading to Brexit, she said. “In Germany, the ECB is constantly being made into a scapegoat.”

Such opinions certainly won’t hurt Schnabel in her new job. More importantly, her differentiated approach toward the ECB’s monetary policy may gain her more influence than Weidmann and Lautenschläger had. Schnabel is a good communicator, and it helps that she is an economist while both Lautenschläger and Lagarde are lawyers by training. If she teams up with Lagarde, the only other woman on the bank’s executive board, both could benefit.

“The ECB’s Executive Board is running out of economic skills,” ING analyst Carsten Brzeski wrote in late October. “With Schnabel, Germany would have an excellent economist on the board, who has been rather supportive of the ECB’s monetary policy decisions of the last years (…) Schnabel could also emerge as a Lagarde whisperer, giving Germany a much better and much more constructive influence on ECB decisions than the traditional nein.”

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When NATO celebrated its 70^th anniversary in early April, feelings in Germany were mixed.

Chancellor Angela Merkel’s government dutifully praised NATO’s achievements but could not hide its embarrassment when US President Donald Trump once again criticized Germany for failing to keep its promises on military spending.

Yet Merkel’s government is doing exactly what most Germans want. A clear majority says that NATO is important to secure peace and useful to Germany, according to a recent infratest dimap poll. Yet the same poll also shows a majority opposed to increasing military spending to the two percent of GDP to which all NATO members committed, Germany included.

Have-your-cake-and-eat-it is not an unusual attitude anywhere. But what is striking is the extent to which Germany indulges in it. After more than 70 years of peace and a decade of economic growth, this whole nation has wrapped itself deeply into the comfort zone. Germans do not want to know about threats or conflicts that might necessitate any kind of action. Close your eyes, and those conflicts might go away.

Renouncing Strategic Thinking

By blinding itself to the risks and threats around it, Germany has also renounced strategic thinking: about its role today and in the future; about defining who its friends and enemies are, and anything in-between; and about resolving conflicts between its economic interests and its political and moral code.

There are three areas where this refusal to think strategically is particularly noticeable: first, in the relations with the United States and Russia; second, concerning military matters; and third, in Germany’s failure to lead Europe. In all three areas, there is a pronounced lack of leadership from the chancellor and the political elites. The effect is a slow erosion of the political loyalties and convictions that hold the country together.

Take the dramatic rise of anti-Americanism, fueled not only by US President Donald Trump’s dreadful politics but also by Merkel’s refusal to define Germany’s core interests in a continuing relationship with Washington. In February, a ZDF Politbarometer poll that showed that 86 percent of Germans do not believe that under Trump’s leadership, the United States is a reliable partner for Europe’s security.

In fact, Germans are far more worried about Trump (82 percent) than about Vladimir Putin (56 percent)—despite the Russian president’s aggression against Ukraine and his continuing efforts to undermine democracy and social cohesion in the West. Merkel, in the meantime, continues to support the controversial Nord Stream 2 pipeline, but the chancellor makes little effort to explain her reasons for doing so. Nor does she encourage a debate on the future relations between Russia and Europe.

Don’t Mention the Bundeswehr

Germany’s highly ambiguous relationship with its military follows a similar pattern. Merkel never talks about the Bundeswehr or NATO, if she can avoid it—it’s a topic she personally doesn’t much care for and which won’t win her any votes. If the German armed forces today are underfunded and ill-equipped, it’s largely due to her governments’ profound lack of interest.

Lack of commitment also means that Germany’s elites have failed to build any kind of popular consensus around the Bundeswehr: why it exists, what it should do, and how much that should be worth to the taxpayer. As a result, a sizeable part of the population considers the use of hard power illegitimate on principle.

A fine example of that kind of thinking was recently set by the Social Democratic Party, Merkel’s junior partner in government. At an SPD congress in Berlin, the local party delegates decided that the Bundeswehr should be banned from visiting schools in order to inform students about its mission. If implemented, this would be a break with a long-standing tradition throughout Germany.

“Military organizations will be prohibited from advertising at Berlin schools for serving and working in the military domain,” the Berlin SPD declared. The proponents’ main argument was that school children were at an age where “they are vulnerable to military propaganda and the minimization of the real dangers of a military mission.”

A side effect of this anti-military current is the strong public opposition against arms exports. While from a moral point of view, this is certainly a viable choice, it carries a price: without exports, the German or European arms industry cannot produce weapons systems in sufficient numbers to make them affordable for the Bundeswehr.

This also causes huge strain in Franco-German relations. France, which has far fewer qualms about exporting arms, sees the future of European defense in danger if it becomes impossible to develop and build major weapons systems with Germany.

Silent on the Big Picture

Defense is only one area in which France’s President Emmanuel Macron is gnashing his teeth at Berlin’s lack of strategy and consistency. It has been 18 months since Macron gave his Sorbonne speech, an impassioned appeal to build a much more integrated and powerful European Union. But while Merkel and her ministers have been keen to push forward with bilateral and EU agreements for specific policies, they have remained silent on the big picture: what is Germany’s vision for Europe? What are the institutions and policies that will allow the EU to regain popular support and defend Europe’s position in the world?

It is impossible to define the future of Europe without a clear definition of Germany’s own interests vis-à-vis the rest of the world. Or without defining the means to pursue those interests. Yet this isn’t happening, and as a result, Germany has turned into a black hole at the center of Europe: the biggest and most powerful country, indispensable to the EU’s survival and success—but too deeply ensconced in its comfort zone to face up to its responsibilities.

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

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

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

Mirroring the IMF

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

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

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

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

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

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

The Core and the Peripheries

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

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

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

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

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

A Competitive Europe

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

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

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

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© REUTERS/Vincent Kessler

It happened in the blink of an eye: a seemingly mundane personnel decision in Brussels ballooned into a Europe-wide controversy. On February 21, European Commission President Jean-Claude Juncker proposed his chief of staff, German lawyer Martin Selmayr, as secretary general of the Commission. All 28 European commissioners gathered at 9:35 a.m. to approve the promotion. By 9:39 a.m. the Brussels press corps found emails in their inboxes announcing that Juncker would hold a press conference to discuss the staffing decision. It did not take long for the questions to start swirling: Was this a backroom deal to catapult a deeply influential Brussels careerist into the Commission’s top civil servant position?

From a purely legal perspective, there was nothing wrong with Selmayr’s promotion. But it certainly did not look good, coming as it did one year ahead of important European Parliament elections. The hasty press conference looked no better, and it became clear that many in Brussels were well aware of the trouble Selmayr’s appointment presented.

“The perception was not overwhelmingly positive―it was more the opposite,” admitted Commissioner Günther Oettinger, who oversees budgets and personnel, to MEPs during a hearing on the matter. “The issue has also struck a chord with politically-interested citizens beyond Brussels.”

It has done more than strike a chord: it sparked a furious backlash across Brussels; the European Parliament itself has reproached the Commission for the opaque nature of its appointment process. The episode has also underlined a long-running complaint in Brussels―that Germany is disproportionately represented. After all, three of the four institutions now have German secretaries-general: Selmayr in the Commission, Klaus Welle in the Parliament, and Helga Maria Schmid in the European External Action Service. And if Uwe Corsepius had not returned to Berlin three years ago to oversee European policy in the chancellery, it would be―to put it bluntly―4-0 for Germany against the rest of Europe.

Germans hold other powerbroker positions as well. Four of the six largest parliamentary groups are headed by Germans: Manfred Weber chairs the European People’s Party, Udo Bullmann leads the Social Democrats, Ska Keller leads the Greens, and Gabi Zimmer is at the helm of the European United Left–Nordic Green Left. Klaus Regling serves as the managing director of the European Stability Mechanism―the agency that bails out struggling eurozone member states; Werner Hoyer is President of the European Investment Bank; Klaus-Heiner Lehne is President of the European Court of Auditors, which monitors EU budget management. And if Mario Draghi, president of the European Central Bank, sees his mandate expire next year, Bundesbank President Jens Weidmann could be asked to steer the ECB. So is Europe for all intents and purposes in German hands?

The cacophony of dissenting voices is no longer limited to southern Europe. English-language press have also jumped on the Selmayr affair: “Brussels’ Selmayr problem: Too many Germans in top jobs” was the headline in Politico the day of the appointment. But that assessment is questionable.

“I don’t believe these German EU officials are following the German government’s drumbeat, especially not Selmayr―he wasn’t Berlin’s candidate for the job,” commented a high-ranking diplomat from a Mediterranean member state who asked not to be named. “This is a temporary phenomenon. There will be a lot of changes in 2019.”

Doing the Math

That may be the case, but how does one actually measure too much power or influence? There are two approaches to that question, and both cast doubt on the Germany critics’ assumptions. The first is purely quantitative―counting the number of German officials working in the Commission and Parliament (the largest institutions by size). According to the Commission’s annual statistical report released in January, only 2,154 of its 32,196 employees were German nationals―6.7 percent. In comparison, Germany financed 20.6 percent of the union’s budget in 2017 and funds 27 percent of the European Stability Mechanism.

Other member states have far larger representation in the Commission, both in absolute and relative terms. With 5,060 employees and 15.7 percent of the staff, Belgium holds the record―understandable, as the EU’s power structure is based in Brussels. Italy is next with 3,889 officials, or 12.1 percent, followed by France with 3,174, or 9.9 percent. There are also more Spaniards than Germans in the Commission, namely 2,403 (7.5 percent). In terms of population size, Greece is particularly successful in deploying its citizens to Brussels. Although there are about seven times fewer Greeks nationals than Germans, there are 1,296 Greek officials in the Commission.

The Parliament tells a similar story. The office of the EP reported that there are currently 7,698 staff in its service (excluding the MEPs and their staff). Belgium is once again at the top with 1,215 officials, followed by France with 960, Italy with 739, and Spain with 549. Germany has 492 officials in the Parliament, only 6.4 percent of all permanent parliamentary staff. Greece is also very strongly represented here with 306 women and men.

Yet this purely quantitative approach alone does not answer the question of whether German power has overextended its reach. After all, there is a big difference in the political momentum of a director general and that of a rank-and-file official.

The Commission’s statistical bulletin also includes a breakdown of all ranks, listed by member state. That bulletin shows, once again, that Germans are actually under-represented in the Commission. In fact, Germany does not field the most officials at any level. France leads in this category, followed by Italy and Belgium. In other words, the average Commission official is far less likely to be German than expected, and a German is far less likely to occupy higher ranks.

But what about the top layer―the directors general―where the institutional political power is consolidated? With the personnel decision taken on February 21 together with Martin Selmayr’s appointment as Secretary-General, the Commission now has five Directors-General from France, four each from Germany, Italy, and Spain, three from the United Kingdom, two each from Finland, Greece, Sweden, and the Netherlands, and one from Estonia, Lithuania, Luxembourg, Poland, Portugal, Slovakia, and Cyprus, respectively.

Of the current German Directors-General, only Johannes Laitenberger has a politically important portfolio. Rudolf Strohmeier heads the Publications Office, Manfred Kraff the Internal Audit Service, and Ann Mettler the European Political Strategy Centre, the Commission’s internal think tank. They may have important positions, but they are political lightweights compared to domestic market, agriculture, regional policy, or business and finance departments. The statistics thus invalidate the argument that the institutions are in German hands.

Networking Power

Still, the tendency of member states to wave their national flags and stir emotions in Brussels is growing. Adriaan Schout, a Senior Research Fellow and Europe coordinator at Clingendael, a Dutch independent think tank on international relations, said: “The topic is coming back, and that is dangerous because it undermines the unity of EU institutions. People already have the impression that Germany and Italy are disproportionately represented.”

Schout believes European Commission President Jean-Claude Juncker is partly to blame because he dismantled an initiative by his predecessor, José Manuel Barroso, that would have overhauled personnel and management. Commissioners could no longer have a Director-General of the same nationality serve under them. „One of the few good things Barroso did was to eliminate this national flag problem,” Schout added. Yet the Juncker-Commission in January appointed a Greek Director-General to head the department for migration and home affairs despite the fact that the corresponding commissioner is Greek, too.

The debate is only likely to intensify as European elections approach in May 2019, particularly in the context of Draghi’s succession. If appointed, Jens Weidmann would be the first German to lead the ECB―and Draghi’s term already expires in October 2019. Karel Lannoo, CEO of the Center for European Policy Studies in Brussels, questions Weidmann’s appeal, “not because he is German—he is simply a bit too talkative.”

“He has publicly taken clear positions. A central banker should not be a politician,” he said. So where does the perception of German political dominance stem from, if it is not reflected in the staff of the institutions or halls of power? France has not had a world-class president since François Mitterrand; Italy’s inconclusive election is likely to culminate in a government led either by the populist Five-Star Movement or reactionary right-wing Lega party, possibly even both; Spain was shipwrecked in the real estate and financial crisis; and Poland has been sidelined under the conservative PiS government.

Simply put, no one can dispute Germany’s leadership role. And with the institutional strengthening of the European Council under the Lisbon Treaty, European policy—both right and wrong—has become a top priority. Berlin is increasingly becoming a clearing house for all of Europe’s political issues. Since 2003, a research group from the Centre for European Research at the University of Gothenburg in Sweden has regularly asked EU diplomats from all member states the following question: “Which member states do you cooperate with most in order to develop a common position?”

Based on anonymous responses and a scoring system, the group compiled a list of member states that have the most networking power. No surprise here: it’s Germany that is leading the list. And it is not a question of the positions Germans hold in Brussels.

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