Germany has fallen out with the countries of central Europe, which are asserting national cultural identity to compensate for economic subservience to Germany.
If there’s one thing in Germany more resistant to change than the cult of a strong currency and a love of well-balanced accounts, it’s a foreign policy founded on the European project and strong ties with the US. Yet the map of major powers allied with Germany has changed dramatically in the last three years, as the list of satisfied friends has dwindled, and that of dissatisfied partners has grown.
Relations with the US under President Donald Trump have gone from bad to worse; those with Turkey have come close to breaking down altogether; those with central Europe are stretched thin. The shock therapy inflicted on the Greeks in 2015 at Germany’s instigation gave Latin countries a chilling glimpse of the fate awaiting those who refuse austerity. And the UK vote for Brexit in June 2016 deprived Chancellor Angela Merkel of a European ally in favour of free trade.
Germany’s strength lies primarily in trade, and the problem is best understood in those terms. Some of Germany’s key economic allies have become political, ideological and cultural adversaries. The US, German industry’s biggest export market, is challenging Germany’s commercialism and social choices more and more openly. The countries of central and eastern Europe – the biggest providers of subcontracted labour to German industry, with a little-known role in its success – are rebelling against the policies Germany imposes, especially on migration. Gideon Rachman noted in the Financial Times on 7 March 2017: ‘The situation threatens to revive an old German nightmare: the fear of being a large, isolated power at the centre of Europe.’
Today the German question is reversed. Merkel, hailed by the media as ‘leader of the free world’ for her defence of free trade, multilateralism and immigration, is championing neoliberalism with the backing of the educated classes; France’s president Emmanuel Macron supports her in this. On the other side, a few political leaders, whom panicked commentators are calling an ‘illiberal axis’ (1) – Trump in the US, Viktor Orbán in Hungary, Jarosław Kaczyński in Poland, Andrej Babiš in the Czech Republic – are preaching authoritarian capitalism with the backing of the working class. They combine business sense with cultural conservatism, sovereigntism (doctrine that supports acquiring or preserving political independence) and scorn for traditional politics.
These two branches of capitalism are ideologically opposed, yet bound by the sacred ties of the market. The more Germany, directly or through the European Commission, pontificates about respect for rule of law and democratic freedoms, the more the customer and supplier countries on which its prosperity depends bridle, and distance themselves from a partner they see as arrogant. As an economist at the Centre for Eastern Studies in Warsaw notes, without irony, ‘Germany needs allies who will promote a free-market model of the Union, based on the principles of fiscal discipline, in the clash with the more statist vision of the EU represented by France, but probably also by leftist-ruled Greece and Portugal’ (2).
‘The Germans are bad, very bad’
A sign of the times is that it took Trump’s outspokenness and tweets to expose the malfunction of German-American relations, which had until then passed unnoticed. In March 2016 candidate Trump, whose campaign promises included less free trade and a wall to keep Mexican immigrants out, made Europe’s welcome for refugees an anti-model: ‘What Merkel did to Germany is a shame, it’s a sad, sad shame.’ On taking office, he threatened to impose a 35% tariff on BMW cars made in Mexico. ‘How many Chevrolets do you see in Germany? Not many, maybe none, you don’t see anything at all over there … When you walk down Fifth Avenue, everybody has a Mercedes-Benz parked in front of his house,’ he said, concluding ‘The Germans are bad, very bad.’
Trump added to his complaints the finance of NATO, which he had described as obsolete; its rules for mutual military assistance did not fit well with his slogan ‘America first’. He tweeted: ‘We have a MASSIVE trade deficit with Germany, plus they pay FAR LESS than they should on NATO & military. Very bad for U.S. This will change’ (3). Germany only spends 1.2% of GDP on defence, rather than the 2% recommended by NATO since the Riga summit of 2006.
After an icy welcome at the White House last March, and an international summit in Italy at which Trump reasserted his hostility to the Paris climate agreement, Merkel questioned the US’s dependability as an ally: ‘The time when we could completely depend on others is to some extent over,’ she told an election rally in Munich last May. ‘I can only say that we Europeans really have to take our fate into our own hands.’ In June she warned of the dangers of protectionism and isolationism. Like American liberals, who define themselves by their opposition to Trump and the forces he represents, Germany’s centre parties made anti-Trumpism an electoral issue and a social marker that implied ‘we are above this kind of thing’. ‘The US government has just declared cultural war,’ said Social Democratic candidate Martin Schulz, urging his country to ‘confidently take up this struggle’ (Der Spiegel, 4 February 2017).
Last June a poll suggested that barely 20% of Germans saw the US as a trustworthy partner, down two-thirds since Trump’s election. Respondents gave Trump a confidence rating of 11%, while Vladimir Putin scored 25% (4). The consequences of this deterioration in transatlantic relations can be seen in the campaign manifesto of the Christian Democratic Union-Christian Social Union (CDU-CSU) alliance for last September’s federal election. The 2013 manifesto said ‘the United States is Germany’s best friend and partner’; the 2017 version called it ‘our most important partner beyond Europe’.
From the Berlin airlift of 1948-9 and Kennedy’s visit in 1963, to Germany’s adulation of Barack Obama, US-German relations have been legendarily close, so that their decline has seemed due solely to Trump. But apart from Germany’s policy on migration and free trade, which Trump has attacked by pulling out of the Trans-Pacific Partnership and the Global Compact for Migration, the countries’ interests have been diverging – in many areas for years, regardless of who was in the White House. The first notable incident was Germany’s refusal to send troops to Iraq in 2003, but in 2013, during Obama’s presidency, came the major shock that US security services had tapped Merkel’s mobile phone.
Since Trump’s election the range of quarrels has widened. The new wave of sanctions against Russia and businesses trading with it, approved by the US Senate last June, had a knock-on effect on Germany and Austria, important trading partners of Russia and collaborating with it on the construction of the gas pipeline Nord Stream 2. Germany and Austria said in a joint communiqué on 15 June that ‘the threat to introduce [extraterritorial] sanctions … contrary to international law [created] a new trend which may negatively affect European-US relations.’ The US withdrawal from the Paris agreement on reducing greenhouse gases is a handicap for German industry, which was hoping to export green technology to the US. Thilo Brodtmann, managing director of the German Engineering Federation, said this was ‘irresponsible, not only toward the environment, but also toward the global economy’ (Le Monde, 10 June 2017).
Trump’s eccentricities have eclipsed the sound basis for his criticism of German commercialism. His comment about German cars in New York reflects the reality that between 2009 and 2015 Germany’s trade surplus (exports minus imports) with the US grew from $28bn to more than $75bn (5). In 2016 German businesses shipped goods worth $114bn to the US, which is their biggest customer, receiving 10% of all German exports. Germany’s trade surplus with the US was equal to 8.7% of its GDP in 2016, higher than China’s. The Economist, a supporter of free trade, led with ‘The German problem: Why Germany’s current-account surplus is bad for the world economy’ (8 July 2017). In 2009, and again in 2013, the Obama administration denounced the imbalance as an obstacle to the economic recovery of other countries.
The US believes Germany is waging an asymmetric trade war, both by not importing enough Chevrolets, and by harnessing the euro to help it export Mercedes. White House trade adviser Peter Navarro claimed last January that Germany ‘continues to exploit other countries in the EU as well as the US with an “implicit Deutsche Mark” that is grossly undervalued’ (Financial Times, 31 January 2017), a view ratified by Bundestag president and former finance minister Wolfgang Schäuble himself: ‘The euro exchange rate is, strictly speaking, too low for the German economy’s competitive position’ (Financial Times, 6 February 2017).
German multinationals have not only filled the streets of New York with cars but invested massively in the US, where they employ 700,000, many in industrial jobs – the kind Trump wants to recreate. The BMW plant in Spartanburg (South Carolina) alone has a workforce of 9,000. Yet according to Stefan Theil, executive editor of the international edition of Handelsblatt, Germany’s biggest business daily, ‘Trump’s bluster and oversimplification aside, the core of his accusation – that Germany has benefited more from the global order than the country has contributed to it – is largely correct’ (6).
Though Germany is campaigning hard for a European defence union, it knows it enjoys the protection of the US nuclear umbrella. A group of foreign policy experts published in the weekly Die Zeit (12 October 2017) a declaration titled ‘In spite of it all, America: a transatlantic manifesto in times of Donald Trump – a German perspective’, urging Merkel to avoid unrealistic ambitions on immigration, climate change and trade, and to focus on security while waiting for an improvement in transatlantic relations.
Success in central Europe
Meanwhile, Trump has triumphed in central Europe. Last July, on his way to the G20 summit in Hamburg, he visited Warsaw. After castigating journalists who propagate ‘fake news’, he paid tribute to the courage of Poland, governed since 2015 by the ultra-conservative Law and Justice Party (PiS), led by Jarosław Kaczyński – who, though he does not hold any official government office, effectively rules the country. ‘The fundamental question of our time is whether the West has the will to survive … Do we have the confidence in our values to defend them at any cost?’ said Trump. Polish politicians were delighted: they use the same argument to justify their refusal to admit migrants. Fanatically anticommunist, Christian, stable and conservative to the point of having almost eradicated the left from its political landscape, Poland is a natural ally of Trump’s US, and a growing worry for Germany.
With the Czech Republic, Slovakia, and Hungary, led since 2010 by the authoritarian conservative Viktor Orbán, Poland is part of an informal cooperation organisation known as the Visegrád Group (after the Hungarian town in the Danube Bend where its inaugural meeting was held in 1991). Until they joined the EU in 2004, Germany was their mother, banker and godfather. Stabilising these countries, getting them to join NATO, converting them to market economies, and integrating them into Germany’s industrial fabric was a strategic imperative.
The time when we could completely depend on others is to some extent over. I can only say that we Europeans really have to take our fate into our own hands
Mission accomplished: with Germany as their biggest trading partner, the Visegrád countries have become workshops for German industry, providing labour so cheap that it exerts downward pressure on German wages. Atlanticism led Poland, the Czech Republic and Romania to join the US in invading Iraq in 2003, but otherwise these allies have shown themselves dependable. Economist Beáta Farkas notes that ‘since their EU membership, Visegrád countries have been supporters of German economic policy in the EU,’ especially on Greece (7). This idyllic relationship with a former invader inspired Radosław Sikorski, foreign minister in the last Polish government, to say in 2011: ‘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.’
Everything changed after a chain of not entirely chance events. In September 2015 Germany welcomed hundreds of thousands of refugees; in October the PiS won an absolute majority in Poland’s parliamentary election; Witold Waszczykowski became foreign minister after deploring the way Poland had become a ‘German colony’ (Le Monde, 9 February 2017); in November the PiS launched its campaign to control the Constitutional Tribunal, some state-owned media and the legal system.
Since then, the quarrels between Germany and Poland have extended to the whole region and become a standoff between the EU and the Visegrád countries. Top of the list is Merkel’s policy on refugees and the mechanism for the relocation of 160,000 asylum seekers adopted by the European Council in 2015 at her instigation, despite opposition from Poland, Hungary, the Czech Republic and Slovakia. This decision upholds the right to asylum, but in the words of sociologist Wolfgang Streeck, still constitutes an ‘imposition on Europe of German policies disguised as European policies to which, supposedly, there is no alternative’ (8).
Forced to take Muslim migrants
The Visegrád countries were horrified at the idea of having Muslim immigrants imposed on them – Poland imports Ukrainian labour to bring wages down – and saw this as bullying and a sign of EU weakness, as it seemed unable to protect its borders. Not only did the European Court of Justice reject their appeals, but last June the European Commission launched legal proceedings against Poland, Hungary and the Czech Republic to force them to accept migrants. The episode, which received excessive media attention, strengthened the conviction that the liberal forces in control in Brussels were no longer content to impose their economic interests and were now dictating moral and political priorities.
The European Commission’s legal proceedings aimed at preserving the rule of law in Poland, launched in January 2016 and followed by recommendations concerning the ‘lack of an independent and legitimate constitutional review in Poland’ and the triggering of a sanctions mechanism last December, further strengthened this perception, and widened the rift between the Visegrád countries and western Europe, in particular between Germany and Poland. On either side of the Oder-Neisse line (Germany’s eastern border since 1945), the atmosphere was so heavy that in August Merkel abandoned her usual reserve, saying that rule of law in Poland was a serious issue and that Germany could no longer ‘stay silent and say nothing just to keep the peace.’ Kaczyński responded by accusing Germany of ‘denying its responsibility for the second world war’ and demanding ‘huge sums’ in reparations (Le Monde, 31 August 2017).
The rift also gives leaders of the authoritarian right outside Europe an opportunity to settle their scores with the EU. Outraged that the EU had mentioned the Middle East peace process in an Israeli-EU cooperation agreement, Israeli prime minister Binyamin Netanyahu last July asked the heads of government of the Visegrád countries to help Israel and not to ‘undermine the one western country that defends European values and European interests and prevents another mass migration to Europe.’ The meeting, behind closed doors in Budapest, was warm. Forgetting that the microphones were still on and that journalists in the next room could hear him, Orbán told Netanyahu: ‘The EU places conditions on [countries] already inside the EU, not only the [ones] on the outside’ (9).
Trump’s imposition of immigration restrictions has not escaped the attention of the Visegrád Group leaders, who have taken the same position vis-à-vis Brussels. Hungary’s prime minister, Poland’s foreign minister and the Czech and Slovak presidents have hailed Trump’s ban on citizens of some Muslim countries entering the US. The election of Andrej Babiš (sometimes described as the Czech Trump though he also has a media empire like Silvio Berlusconi) in last October’s parliamentary election further strengthened regional cohesion.
The Visegrád countries are not a monolithic group: there are divergences between religious Poland and the secular Czech Republic, between Slovakia’s Social Democratic Robert Fico and Hungary’s nationalist-conservative Orbán, and between Poland’s anti-Russian obsession and Slovakia’s good relations with Russia. But all of them like the anti-intellectual informality and the nationalism of their US ally. Hungary’s foreign minister Péter Szijjártó told Fox News that, before Trump, ‘if you articulated that you see your country as first, your country’s interests as first, the security of your people as first, you were immediately considered fascist, extremist, nationalistic, whatever…’ (Financial Times, 14 March 2017). This rhetoric is now that of the world’s leading power. Orbán said: ‘What is the message of America? Make Hungary great again’ (10). This cosiness exasperates Germany.
Disagreement on Nord Stream
The US and Poland also share positions on climate change and energy that Germany rejects. The EU focus on reducing greenhouse gas emissions fits perfectly with Germany’s energy transition, but the strategic importance of coal makes it difficult for Poland to accept EU demands. Besides the rift over the Paris climate agreement, which Poland ratified only reluctantly, there is the construction of the Nord Stream 2 gas pipeline between Russia and Germany, laid across the Baltic by a consortium controlled by the Russian government and headed by former German chancellor Gerhard Schröder, which denies Poland transit fees.
The issue is so heated that even a pro-German Atlanticist as committed as Sikorski has compared the Russo-German agreement on Nord Stream 1 to a new Molotov-Ribbentrop pact (the 1939 non-aggression treaty that divided Poland between the Soviet Union and Nazi Germany; The New York Times, 13 October 2009). This escalation is also partly explained by trade rivalry: Poland imports liquefied natural gas from Norway and the US, and would like to become a major energy distribution hub in central Europe within the Three Seas Initiative, an infrastructure project involving 12 European countries on the Baltic, the Adriatic and the Black Sea. This alliance, launched by Poland, makes it possible to strengthen links with the US and marginalise Germany; Trump attended its July 2017 meeting.
What does this new development between Germany and its central European and US partners tell us, and is it in fact so new? Poland and the Baltic states have relied more on NATO than on the EU for their defence since the 1990s. The arrival of 1,100 NATO troops, including 900 Americans, in Poland last April had been ‘awaited for generations’, according to President Andrzej Duda (Reuters, 13 April 2017). The rise of populism in eastern Europe threatens not so much the EU as a certain view of European integration. It results from a combination of authoritarian government and a desire for sovereignty in nations that, for 75 years, have known only Soviet domination and then supervision by Washington, Brussels and Berlin.
Unlike the Benelux countries and Austria, also in the German economic sphere of influence, the Visegrád Group occupies a subordinate position in Europe that combines low-wage jobs with heavy dependence on foreign investment and EU subsidies. The subordination goes beyond statistical tables: it is experienced, seen, suffered. It is politicised as anti-immigrant sentiment by Kaczyński, Orbán, Fico, Babiš and the German far right, now the second biggest political force in the new states of the former East Germany, whose populations share with their eastern neighbours the trauma of the post-Soviet transition.
The indisputable, though uneven (11), rise in the standard of living in central Europe and the emergence of bourgeoisies emancipated from Russia and the EU have led to demands for economic and cultural sovereignty. Hungarian and Polish political leaders are using the national independence imperative to legitimise their authoritarianism. Orbán told a pro-government website: ‘We should not forget that five years ago a dominant proportion of the Hungarian media was in German hands. When I took a view that was in conflict with the German view, the next day the German-owned press in Hungary launched an immediate counter-attack. Now this situation has changed’ (12).
The comfortable, warm, socialist-liberal world in which ‘we all bleat in the same sheep-pen’ has come to an end
With France and Germany talking of a multi-speed Europe, the main purpose of the PiS’s renationalisation of priorities (internal and external) in 2016 was to assert Poland’s interests so that it would not be confined to second-tier Europe. Besides seeking to control the legal system, it launched an economic modernisation plan based on public investment and partial nationalisation of the banking sector (named the Morawiecki plan after the finance minister, who became prime minister last December). While announcing a desire to cooperate more closely with the other Visegrád countries, the PiS shifted the focus away from relations with Germany, which the previous government had prioritised, towards the UK, with a view to building an Atlanticist axis opposing the single currency (only Slovakia and the Baltic states use the euro in the region) and the dilution of national identity. Brexit shattered these plans.
The Visegrád leaders, like the sovereigntist parties that have won over a significant proportion of electorates across Europe, are building a European anti-model. It’s not original in institutional terms, calling for a Europe of nations high on neoconservatism, as outlined in the proposal for EU reform put forward by Poland in 2016. The aim, according to European foreign minister Witold Waszczykowski is ‘to give the main power in the EU to the European Council, not the Commission’ (13), in other words to go back to the first stage of the European project: a simple free trade zone among sovereign nations, with free movement of goods, capital and labour. The crucial importance of the vast European market to these countries, which want to escape from an economy based on dependency and subcontracting, limits their sovereigntism: ‘We fear a return to protectionism in the West,’ a Visegrád Group diplomat said (Le Monde, 11 March 2017), to explain Polish and Czech anger at France’s wish to revise the directive on posted workers.
This counter-project turns out to be far more significant ideologically, as it aims to break the dogma that the neocons suspect the EU of wanting to impose. According to Piotr Buras of the European Council on Foreign Relations thinktank, ‘PiS’s rhetoric often falls back on the theme of leftwing social engineering, which it claims has ploughed through western societies to achieve a vision of progress associated with secularisation, ecology, glorification of minorities, cosmopolitanism, and multiculturalism. PiS, and those who support its manifesto, often believe that Poland represents the “real West”, whereas western Europe has betrayed the original western values’ (14). This ‘real West’ would like to know how it is possible for a conservative Chancellor to have backed Germany’s withdrawal from nuclear power, a minimum wage, promotion of human rights, acceptance of refugees and same-sex marriage.
The PiS’s national-conservatism opposes the ‘liberal globalist forces’ which, Orbán claims, occupy the most important positions in Brussels, and compensates for the loss of economic sovereignty inherent in free trade by the authoritarian assertion of Polish cultural values, of the borders of the EU, and of national territory as a sovereign political entity.
In a speech at the Bálványos summer university in Băile Tuşnad, Romania, last July, Orbán said, recalling the fall of the East Bloc: ‘Twenty-seven years ago here in Central Europe we believed that Europe was our future; today we feel that we are the future of Europe … I think that the comfortable, warm, socialist-liberal world in which “we all bleat in the same sheep-pen” has come to an end’ (15). Fifty years after May 1968, the ideological choice appears to be authoritarian capitalism or liberal capitalism – May 1968 in reverse.
(1) Eric Le Boucher, L’Opinion, Paris, 20 March 2017; Sylvie Kauffmann, International New York Times, 23-4 September 2017.
(2) Konrad Popławski, ‘The role of central Europe in the German economy: the political consequences’, Centre for Eastern Studies (Ośrodek Studiów Wschodnich), Warsaw, June 2016.
(3) Sources: Piers Morgan interview, ITV, 26 March 2016; Bild, Berlin, 16 January 2017; Der Spiegel, Berlin, 26 May 2017; Twitter, 30 May 2017.
(4) Stefan Theil, ‘Berlin’s Balancing Act’, Foreign Affairs, vol 96, n° 5, September-October 2017.
(5) ‘Trade in Goods with Germany, US Census Bureau.
(6) Stefan Theil, op cit.
(7) Beáta Farkas, ‘Economic and political relations between Germany and Visegrád Countries in turbulent times’ (PDF), ECPR General Conference, Charles University in Prague, Prague, 7-10 September 2016.
(8) Wolfgang Streeck, ‘Scenario for a wonderful tomorrow’, London Review of Books, vol 38, no 7, 31 March 2016.
(9) Barak Ravid, ‘Netanyahu Launches Blistering Attack on EU’, Haaretz, Tel Aviv, 19 July 2017.
(10) Interview on 888.hu, 15 December 2016 (English translation on prime minister’s website).
(11) See Philippe Descamps, ‘Slovakia, where central Europe really begins’, Le Monde diplomatique, English edition, October 2017.
(12) 888.hu, op cit.
(13) Andrew Rettman, ‘Poland to push for “radical” new EU treaty’, EUObserver, 28 June 2016.
(14) Piotr Buras, ‘Europe and its discontents: Poland’s collision course with the European Union’, European Council on Foreign Relations policy brief, September 2017.
(15) www.visegradpost.com, 24 July 2017.