There is a new German question. It is this: Can Europe’s most powerful country lead the way in building both a sustainable, internationally competitive eurozone and a strong, internationally credible European Union? Germany’s difficulties in responding convincingly to this challenge are partly the result of earlier German questions and the solutions found to them. Yesterday’s answers have sown the seeds of today’s question.
Before I explore those historical connections, however, let us reflect on everything that this new German question is not. Twenty-three years after unification, the enlarged Federal Republic of Germany is about as solid a bourgeois liberal democracy as you can find on earth. It has not only absorbed the huge costs of unification but also, since 2003, made impressive economic reforms, lowering labor costs by consensus and hence restoring its global competitiveness.
This land is civilized, free, prosperous, law-abiding, moderate, and cautious. Its many virtues might be summarized as “the banality of the good.” Asked by the tabloid BILD-Zeitung what feelings Germany awakes in her, Angela Merkel once famously replied, “I think of well-sealed windows! No other country can make such well-sealed and nice windows [dichte und schöne Fenster].”1 Yet the place is not altogether so banal. Opening the well-sealed windows of my hotel room in Berlin, I look across Unter den Linden to the illuminated, translucent dome of the Reichstag building, at the heart of what is now, after London, Europe’s most exciting city.2
An Israeli friend who has taken German citizenship describes Germany to me as a “balanced” country, and that feels just right. The French leftist politician Jean-Luc Mélenchon caused a stir when he said that “amongst those who have a zest for life, no one wants to be a German.”3 In that case, there must be an awful lot of people who have no zest for life, because according to a twenty-five-nation BBC poll, Germany is the most popular country in the world—ten points ahead of France.4
It also has weaknesses and problems. Who doesn’t? Germany has a rapidly aging population. On a gloomy, no-change extrapolation, it could be down to a ratio of just over one working person to each pensioner by 2030. Without any immigration, its population might fall from over 80 million today to under 60 million in 2050. Immigration therefore has to be a large part of the answer to its demographic challenge, but Germany lags behind France and Britain, let alone Canada and the United States, in emitting those vital, elusive social and cultural signals that enable people of migrant origin to identify with their new homeland.5
Having made an irrational, short-sighted political decision to abandon its own nuclear power program, following the Fukushima disaster in Japan, and relying heavily on coal and gas, Germany’s industrial energy costs are some 40 percent above those in France. Its economy is brilliant at making things that people in countries like China want to buy—cars, machine tools, chemicals—but weaker in services. German companies are outstanding at incremental technological improvements but less good at what is called “disruptive innovation,” of the kind you find in Silicon Valley. The country that invented the modern research university in the nineteenth century has many very good universities, but no world-class one to compete with Oxford or Stanford. Berlin boasts a delightful Café Einstein, but since the 1930s the Einsteins of this world have tended to work elsewhere.
If these weaknesses were eventually to result in economic decline, a domestic German question could again arise. For Germany’s well-balanced liberal stability and national identity are deeply bound up with its economic prowess. One cannot entirely exclude the possibility that, in such an event, we could again see a revival of cultural pessimism, political extremism, and what the tennis champion Boris Becker once conversationally identified as his compatriots’ “tendency to flip their top.” But there is far more hysterical top-flipping in the United States than in Germany at the moment—and sufficient unto the day are the German questions thereof.
In the global competition for business, German companies are as tough and well-organized as German regiments used to be in war, and they are skillfully, systematically supported by their government. Geopolitically, however, this Germany manifests absolutely no neo-Wilhelmine ambitions to dominate its neighbors, or anyone else. The only “place in the sun” its citizens seek is on the holiday beaches of the Mediterranean. The only warlike victories it celebrates are on the battlefield of soccer, a game at which it is so good that it sometimes ends up playing itself. This year’s European Champions League final, in London, was between two German teams, Bayern München and Borussia Dortmund.
At the time of German unification, there were fears that Germany would come to dominate a new Mitteleuropa. Economically, Germany does now have a preeminent position in East Central Europe. German manufacturers such as Volkswagen have transferred important parts of their production to take advantage of East Central Europe’s lower-wage, high-skilled workforce, while still being inside the EU. If you treat the four Visegrad countries—Poland, Hungary, the Czech Republic, and Slovakia—as one unit, they are Germany’s biggest single trading partner. But this new Mitteleuropa has been achieved by consent, and is seen by most Slavs, Magyars, and Germans as being largely to mutual advantage. German-Polish relations are the best they have been for a thousand years, and Poland is now Germany’s best friend in the EU. In 2011, that country’s foreign minister, Radek Sikorski, memorably declared, “I will probably be the first Polish foreign minister in history to say so, but here it is: I fear German power less than I am beginning to fear German inactivity.”
To understand why Germany is so reluctant to lead, you have to realize that the European monetary union forged during and after German unification was not a German project to dominate Europe but a European project to constrain Germany. To the German question of 1989—what should we do about a rapidly uniting Germany?—the answer given by François Mitterrand of France and Giulio Andreotti of Italy was: bind it even more tightly into Europe, through a monetary union. Yes, plans for a single currency to complement the single market were already to hand, Chancellor Helmut Kohl was for it in principle, and there were economic arguments for introducing it. But the timetable then hastily agreed for the monetary union we have today, and some of its fundamental design flaws, resulted from the politics around German unification.
We saw this at the time, but the story can now be followed in fascinating detail in the published German, British, French, and American documents. To give just one example, according to the German record of a December 1989 conversation, Kohl explained to US Secretary of State James Baker his attempts to allay European fears about German unification thus:
He [Kohl] asked himself what more he could do than to contribute to the creation of European monetary and economic union. He had taken this decision [to commit to the monetary union] against German interests. For example, the president of the Bundesbank was against the current development. But the step was politically important, for Germany needed friends. No distrust should be allowed to arise in Europe against us.6
Kohl cogently argued that a monetary union would need a fiscal and therefore also a political union to accompany it; but Mitterrand and Andreotti were having none of this. The idea was that they should get a handle on Germany’s currency, not that Germany should get a handle on their national budgets. And so some of the fundamental defects that the eurozone is struggling to correct today—monetary union without mutual oversight of budgets, debts, and banks—emerged from the turgid politics of its inception. As the historian Heinrich August Winkler observes: “To solve the German question with the consent of Europe, the European question had to remain open.”
The Germans were never asked in a referendum if they wanted to give up the deutsche mark, which was to postwar West German identity what the queen is to British identity. If the Germans had been asked, they would probably have said no; but the mighty Kohl pushed it through. In the first decade of the euro’s existence, they got used to it, but they never learned to love it. Hardly anyone pointed out to them that Germany was the biggest beneficiary of the single currency, since it created excellent conditions for the country’s exports, both into and beyond Europe. According to one estimate, Germany’s cumulative trade surplus with the rest of the EU, from the introduction of the euro in 1999 to 2011, was more than $1 trillion.7
Then came the reckoning. In the electric storm of the financial crisis that broke in 2008, intensified by the hysteria of the bond markets, all the flaws of this half-baked currency union were brutally revealed. That open European question now had to be addressed. Because it was a question of economics, or more accurately of political economy, all eyes turned to what was now—thanks to its own long-standing economic prowess and post-2003 reforms, but also thanks to the euro—Europe’s undisputed leading economic power.
Germany had not sought this leadership role in Europe. After 1990, most Germans would have been quite happy to master the challenges of national unification and otherwise go on being rich and free, in a kind of Greater Switzerland, with high-quality exports and plenty of sunny holidays on the Mediterranean. Instead, the monetary union intended by Mitterrand to keep France in the driver’s seat of Europe, and Germany in the passenger seat, ended up doing the precise opposite. It put Germany in the driver’s seat as never before. Suddenly the Germans found themselves paying to bail out others, and their government telling countries now lumped together as “South European” exactly what to do in return: cut your budgets, make structural reforms, become more like Germany.
Germany thus slid unwittingly into the part that Bismarck, in a great speech to the Reichstag in 1878, had warned his country not to take: der Schulmeister in Europa, Europe’s schoolmaster.8 Or rather, since the occupant of Bismarck’s chair was now a lady, the schoolmistress of Europe. Berlin’s reward? Cypriot street protesters holding up placards saying “Hitler Merkel” and Greeks accusing Germans of behaving like Gauleiters. In a Harris poll conducted in June this year, 88 percent of respondents in Spain, 82 percent in Italy, and 56 percent in France said Germany’s influence in the EU is too strong. As Merkel herself once wryly remarked to me: we’re damned if we don’t lead and damned if we do.
The chancellor’s pragmatic, low-key, step-by-step approach partly reflects her personal style. But one reason her popularity has held up so well in Germany throughout these years of crisis is that her manifest reluctance to do more than the seemingly unavoidable at every stage of the eurozone crisis has both mirrored and defined the reluctance of a nation. The one really bold, decisive action in the eurozone crisis so far was taken not by Germany but by the Italian president of the European Central Bank, Mario Draghi, when he said in July 2012 that the bank would do “whatever it takes” to preserve the euro. As a result, the eurozone has survived but is not yet prospering—especially not in the debtor countries of the south. In Spain, for example, youth unemployment exceeds 50 percent.
1 BILD-Zeitung, November 30, 2004. She had just answered an almost identical question—“What springs to mind when you think of Germany?”—so she was probably trying to deflate the journalists’ search for national pathos. Responding to that first question, she talked about Germany’s temperate climate, which, she said, ensures “that we don’t need a siesta!” I am grateful to Stefan Kornelius for pointing me to the original, which differs slightly from the version quoted in his book, Angela Merkel: Die Kanzlerin und ihre Welt (Hamburg: Hoffmann und Campe, 2013), p. 29. ↩
2 London still wins by a head because, unlike Berlin, it has everything in one place—politics, business, journalism, culture, think tanks, sports—and the English language to boot. ↩
3 Quoted in Der Tagesspiegel, June 11, 2013. ↩
5 See my “ Freedom and Diversity: A Liberal Pentagram for Living Together,” The New York Review, November 22, 2012. ↩
6 Record of a conversation in West Berlin on December 12, 1989, in Deutsche Einheit: Sonderedition aus den Akten des Bundeskanzleramtes 1989/90, edited by Hanns Jürgen Küsters and Daniel Hofmann (Munich: R. Oldenbourg, 1998), p. 638. ↩
7 Estimate by Jorge Braga de Macedo and Urho Lempinen, quoted by Risto E.J. Penttila in “Germany Calls the Shots,” International Herald Tribune, March 22, 2013. ↩
8 Speech on February 19, 1878, reproduced in Bismarck: Die grossen Reden, edited by Lothar Gall (Berlin: Severin and Siedler, 1981), p. 155. This is the famous speech where he suggests that Germany should rather aspire to be an “honest broker.” ↩
BILD-Zeitung, November 30, 2004. She had just answered an almost identical question—“What springs to mind when you think of Germany?”—so she was probably trying to deflate the journalists’ search for national pathos. Responding to that first question, she talked about Germany’s temperate climate, which, she said, ensures “that we don’t need a siesta!” I am grateful to Stefan Kornelius for pointing me to the original, which differs slightly from the version quoted in his book, Angela Merkel: Die Kanzlerin und ihre Welt (Hamburg: Hoffmann und Campe, 2013), p. 29. ↩
London still wins by a head because, unlike Berlin, it has everything in one place—politics, business, journalism, culture, think tanks, sports—and the English language to boot. ↩
Quoted in Der Tagesspiegel, June 11, 2013. ↩
See my “ Freedom and Diversity: A Liberal Pentagram for Living Together,” The New York Review, November 22, 2012. ↩
Record of a conversation in West Berlin on December 12, 1989, in Deutsche Einheit: Sonderedition aus den Akten des Bundeskanzleramtes 1989/90, edited by Hanns Jürgen Küsters and Daniel Hofmann (Munich: R. Oldenbourg, 1998), p. 638. ↩
Estimate by Jorge Braga de Macedo and Urho Lempinen, quoted by Risto E.J. Penttila in “Germany Calls the Shots,” International Herald Tribune, March 22, 2013. ↩
Speech on February 19, 1878, reproduced in Bismarck: Die grossen Reden, edited by Lothar Gall (Berlin: Severin and Siedler, 1981), p. 155. This is the famous speech where he suggests that Germany should rather aspire to be an “honest broker.” ↩