German citizen-state emerges

Politics is the daughter of history and history is the daughter of geography. The German maxim is an appropriate point of departure in considering the decisive outcome of last Sunday's federal elections. But it would be a mistake to interpret it in too determinist a fashion. Politics changes history as well as emerging from it and in the process geography can be changed as well.

The principal loser, Helmut Kohl, has good reason to reflect on these matters. He frequently resorted to historical argument in justifying his two greatest achievements - peaceful unification of Germany and the embedding of his country within a European Union constructed in such a way as to optimise German interests within the continent.

Without such a wider framework he believed it would be impossible to prevent his country reverting to unilateral means of bringing order to its regional milieu, a burden it has been shown historically to be incapable of bearing alone - with disastrous consequences for Germany and Europe alike.

It is a tribute to Kohl's stature that the expected new German foreign minister, the Green's Joschka Fischer, is enthusiastically committed to much the same integrationist perspective. Ironically Kohl's legacy is likely to be better preserved by the Social Democrat/Green coalition than by one in which the Eurosceptic and vocal proponent of German national interests, the leader of the Bavarian Christian Social Union, Edmund Stoiber, would continue to exert a powerful influence.

For his part the principal victor on Sunday, Gerhart Schroder, is anxious to make the transition from the Bonn to the Berlin republic as quickly as possible. As he sees it Bonn is irredeemably associated with the long Kohl era, whereas the new federal capital, still under construction, will become the symbol of his period in power. He displays little or no discomfort or indeed identification with the historical memories of imperialism represented by this geographical shift - confirming thereby that his is a generational as well as a political transition.

In making it he is confirming the dramatic political geography of Sunday's result. Northern and eastern Germany voted overwhelmingly for the Social Democrats, Greens or the post-communist PDS, while the outgoing coalition's majorities were almost exclusively in the south and west. Dr Kohl lost the election in the territory of the former GDR, where people bitterly resent his failure to deliver on the promises of employment and regeneration he extended after unification.

Mr Schroder brings fresh commitment and a new rhetoric of reform and modernisation to bear on Germany's economic and social policies. Their effectiveness will depend on three sets of factors: the specificity with which structural reforms and competitiveness are addressed; the political balance within his party and coalition; and the orchestration of these approaches within the European Union.

It is still unclear precisely what the balance will be on economic policy, taxation and welfare reforms. There are hard choices to be made, particularly on competitiveness issues; Mr Schroder will not be able to please the left and right wings of his party, much less the realist and fundamental wings of the Greens.

He is politically indebted to Oskar Lafontaine as leader of the SPD's left wing for delivering the party's machine in the campaign. Lafontaine is expected to become finance minister. He advocates a neo-Keynesian programme of public expenditure and favours further cuts in working hours to create employment. This latter approach will bring him rapidly into conflict with the business opinion Mr Schroder has done so much to cultivate.

There is much speculation about the new government's willingness to co-ordinate policies within the EU, particularly now that social democrats share power in so many of the member-states (Ireland, Spain and Luxembourg being the exceptions). We can expect renewed emphasis on employment policy and possibly a more relaxed German attitude to the limits on public expenditure agreed in the stability pact underwriting economic and monetary union.

German attitudes towards economic governance issues in managing the euro are likely to converge more with those of the French government; there are similar attitudes, too, towards reform of the Bretton Woods institutions to better regulate the world economy.

Mr Schroder matches his anxiety to complete coalition negotiations rapidly with an appreciation of the need to establish good relations speedily with his main international partners. Travelling to Paris on Wednesday he reassured President Chirac and the prime minister, Lionel Jospin, that he values the Franco-German relationship despite his enthusiasm for improved relations with Britain (conversing in English with Mr Chirac and quoting Rilke for Mr Jospin).

The British Foreign Secretary, Mr Cook, said the election result heralds a more central European role for his country - despite its non-participation in the euro. A potentially important straw in the wind was a report in the Financial Times that the Foreign Office is urging Mr Blair to support a merger of the Western European Union with the EU, which Britain has heretofore opposed on the grounds that it would weaken NATO and relations with the US.

One way or another there is going to be an equalisation of EUUS relations in the economic sphere as a result of the euro; it would be sensible to expect a similar if slower equalisation in the political and security spheres. The pros and cons of NATO enlargement look different after the political turmoil in Russia, which will be a continuing preoccupation for the new German government.

Precisely because of Germany's geographical centrality and political power the ripple effects of this election will be felt among all its neighbours and those of the EU as a whole. The article this week in Der Speigel criticising Irish farmers' receipts from the Common Agricultural Policy is another straw in the wind, this time for the Agenda 2000 negotiations to be completed next March under Mr Schroder's chairmanship of the German EU presidency.

The 11 accession states, as well as the EU cohesion states, will be watching closely to see whether the outgoing government's determination to reduce Germany's net contributions to the EU budget continues, as well as its basic orientation not to increase the budget so as to cater more effectively with enlargement.

Here in Vienna this week in the magnificent setting of the Hofburg Palace, a conference of politicians and academics from central, eastern and south-eastern Europe adopted a declaration on multiculturalism and multi-ethnicity. In an important statement on politics it says that democracy in this part of Europe "is both a product of a nation-state mentality and the result of protests against concrete forms of the nation-state. Multiple identities are normal in various European countries."

It goes on to say that "the more this culturally pluralist society takes shape, the more essential becomes the concept of the citizenstate, enabling its citizens to adopt several identities. This does not exclude the possibility of individuals feeling stronger ties to an ethnic, religious or cultural group. Pluralist states can only exist by detaching political citizenship from cultural and political identity."

This is, proverbially, easier said than done in this part of the world, with its own very special intersections of politics, history and geography, many identified with the Austro-Hungarian past; but to see the radical new principle set out so clearly is a very good start. Delegates were heartened by reports that the new German coalition would expect to make quick progress on giving dual citizenship to the seven million foreigners living there, notably the two million Turkish-Germans who have been unwilling to sacrifice their hyphenated identities.

Paul Gillespie has been awarded the Milena Jesenska fellowship in journalism at the Institute for Human Sciences in Vienna for a study of multiple political identities. He will be writing regularly from there and thereabouts over the next three months.