German commitment to EU and euro not at stake in election
Adjustments, possibly, ‘but expect continuity in our approach’
Chancellor Angela Merkel – election will not lead to a significant shift in EU policy even if she is defeated. PHOTOGRAPH: REUTERS/THOMAS PETER
Hardly ever before has a German election been watched as closely in Europe and beyond. Small wonder when what the International Monetary Fund has called Europe’s “anchor of stability” goes to the polls amidst a crisis that is abating but not yet over.
Foreign observers pose two main questions: who will win, and what will be Germany’s stance on Europe and the euro after the election?
The first question is guesswork and for the German people to decide on Sunday. The second is easier. Regardless of the result, do not expect a major change in Germany’s European policy. In essence it will remain what is has been – a steadfast commitment to Europe and the euro based on mutual solidarity and national responsibility. One comes with the other: Europe and the euro can only be strong if their member states are strong, and solidarity needs reciprocity in the form of national efforts to maintain or regain strength.
Germany’s commitment to the euro is rock-solid because it stands on two feet, one economic, one political. If it were otherwise the euro might not have seen the light of day.
It is true, the euro is a bit of an orphan. We introduced a common currency but left it without a political union. This was a shortcoming not unknown to the founders of the euro, but there were good reasons to go ahead regardless.
The economic advantages arising from a common market with a common currency are as clear today as when the euro was launched. But in Germany the euro has always been seen as not merely an economic end but a means to a political end. That has been and remains the reinforcement of the European space of peace, prosperity and democracy – a triad we either enjoy or lose together.
So Germany’s commitment to Europe and the euro is not at stake in Sunday’s election. Nor is our European policy.
Europe will not be a decisive electoral issue. Euro zone problems are high on voters’ minds and Germans know they need stable and prosperous neighbours for their own stability and prosperity. But they are concerned that we are being asked to take on too many liabilities that could turn into real losses. So even if the opposition wins, they would have no mandate for radical change and would also have to reconcile two objectives: helping partners to recover in a way that contains the risks for the German taxpayer.
Is this a populist argument? Theodore Roosevelt said: “I have no idea what the American people think; I only know what they should think.” Leaders have a responsibility to lead, but they can only do so if they have a mandate to lead. The next chancellor will have no mandate for a U-turn. This does not exclude adjustments, for as John Maynard Keynes noted: “When the facts change, I change my mind. What do you do, Sir?”
But expect continuity in our basic approach. Not only because of popular will, but because it is also the sensible thing to do. Germany alone cannot deliver a strong and prosperous Europe. Even our resources are limited. And the markets know it.
Germany is the anchor of the euro zone because we have a highly productive and globally competitive economy. Figures never tell the whole story, but they can be instructive about Germany’s place among Europe’s big economies: manufacturing share of GDP – significantly higher; exports to non-European countries as share of total exports – much higher; spending on research and development as well as patents granted – well above average; economic importance of the property sector – significantly lower.
Financial engineering and property speculation, excessive public and private spending, all fuelled by cheap money, can generate bubble booms. But when the sand begins to shift, as it inevitably will, the houses of cards collapse.
Today, Germany is economically strong. Maintaining economic prosperity and social stability will need further reforms in the years to come.
So it is with us and with our neighbours. There can only be a strong Europe if its constituent parts are strong. Germans know that their place in the world is in Europe. They will remain ready to show solidarity with friends in need.
However, we are all in this together and must all do our bit for it, together. Expect to hear this message regardless of who wins on Sunday.
Dr Eckhard Lübkemeier is German ambassador to Ireland. His article is an extracted version of an address at The Institute of International and European Affairs yesterday