“Emergency”, from the Latin emergere, indicates a situation in which pre-existing phenomena or problems are brought to light. Some left-wing commentators, often quite unwittingly, have taken this linguistic fact very seriously. The reason why Covid-19 has hit Europe so violently is a series of disastrous economic and political choices, such as major cuts to healthcare, brought upon by decades of regressive policy. Many hope that this crisis will finally speed up the elimination of these structural weaknesses, radically departing from the pre-pandemic consensus.
There is no etymological equivalent to the word ‘emergency’ in German. The most common translations are “Ausnahmezustand”, a state of exception, or “Notstand”, a state of necessity. In any case, it denotes an extraordinary situation, a rupture from normality, not that the crisis is rooted in an order to which it is not advisable to return.
Language is not destiny, with all due respect to philologists. Nevertheless, in Berlin one will hardly perceive anything beyond the simple desire to return to a state of affairs which was already showing signs of poor health before the pandemic. Resistance to the mutualization of debt (Eurobonds), more systematic redistribution of funds between Member States, the slowness in making a big show of solidarity towards Italy, grudges and suspicions (largely unfounded) about the actual number of casualties claimed by the virus: in 2020, Germany seems to be anything but the leader of a continent dangerously adrift. Admittedly, Angela Merkel is perhaps the only European leader to have adequately reacted to the catastrophe, showing apprehensive but still calm self-confidence in her decision-making. Where other leaders have fallen victim to their own indifference (Johnson) or enthusiastically embraced the privileges of “wartime” leadership (Macron and Conte), the Chancellor has maintained her classic modesty, embodying continuity and institutional stability at a very dangerous juncture.
Control by inaction
This placidity, if you will, is what always distinguished Merkel’s Berlin, for better or for worse. It is what enabled to welcome migrants in 2015 despite opposition voiced within the CDU. It is also what determined the atrophic response to Emmanuel Macron’s proposals to relaunch the European project. Writing during last Big Crisis, the 2008-12 recession, Ulrich Beck commented how Merkel, the CDU (the ruling party par excellence) and by extension Germany used hesitation as a control tactic. German conservatism can blackmail through non-action because its political contribution is crucial for the exercise of power: just as no government can exist without the approval of the Konrad-Adenauer-Haus, no European solution can exist without the participation of Europe’s economic juggernaut. Still, German institutional capacities, both in terms of personnel and political will, are no greater than those of other Member States. German power is therefore reduced to a pure policy of veto, as is painfully evident today.
The need for increased “global responsibility” has now become an irritating leitmotif of German foreign policy. Certainly, avoiding a continental collapse should be a priority to an export economy, as is the preservation of its international supply chains, which for epidemiological reasons correspond to the regions hit the hardest by Covid-19 (French Grand Est, Rhine basin, Lombardy). But there’s also an internal dimension to a real German leadership — an element completely absent from the Christian Democratic vision for Europe.
A Federal Republic leading the Union by taking the interests of other member states into account would need to pursue an agenda of social justice and redistribution — which goes very much against the desires of CDU’s core constituency.
European leadership through social justice
Let’s see what overlaps exist between the country’s economic interests and the policies demanded by the rest of Europe. The issue of Eurobonds, for example, would have important strategic ramifications for European financial autonomy. It would inject more euro-denominated assets in the global market, making it more competitive against the dollar and working towards the emergence of the euro as a global currency. German exports would become comparatively cheaper and would render Europe autonomous from the policies of Washington D.C. It would also defuse the dangerous “doom loop” that regularly threatens to turn the default of banks holding national bonds into systemic crises, which also endanger German lenders and investors. A more secure and thus diversified European financial market is precisely Berlin’s long-term goal, as indicated by the attempts to complete the so-called banking union. Only these measures would provide a big enough market to allow the merger of domestic banks such as Commerzbank and Deutsche Bank. Such consolidation would create institutions large enough to fuel the transition towards a green economy capable of competing with its Chinese peers.
More liquidity, bolstered by safer debt, would also be the best alternative to the interest rate cuts imposed by the ECB to maintain inflation at tolerable levels. The latter policy has been notoriously criticized for the burden it imposes to small German depositors. However, the Central Bank’s difficulty in imposing its line also stems from Berlin’s policy to pursue low wages, which continues with much more obstinacy than restriction to public investments. The German economy has failed to adjust wages to workers’ growing productivity, which coupled with a failure to act decisively against skyrocketing rents has eroded the income of the middle and lower classes. This has meant less consumption and thus reduced imports — a fact directly responsible for the German trade surplus, the other major European grievance. Put simply, pursuing long-term goals for the benefit of the continent’s economy is first and foremost a question of domestic economic justice. This alignment of interests alone should be more than enough to spur progressive forces in the Federal Republic to be more… well, progressive. It’s time to move away from dogmas that equate the interests of the wealthy with those of Germany. Europeanism is social justice. Europeanism needs redistribution. A well-managed Union is the boon of the many, not the few.
10 years, one month
It is clear that many of the required measures, as well as a weakening of the conditionality clauses to access ESM funds, would come very close to the transfer system feared by many German politicians. It is also true that managing such a revitalization of the European project would require considerable political change, shifting dialogue as well as control of such mechanisms from the executive to the parliamentary and regional levels. Financial reforms on their own can’t be shortcuts. The involvement of the Bundestag is crucial for constitutional reasons: the partial transfer of fiscal sovereignty to European institutions is a non-starter for the Federal Constitutional Court. In its case history, Karlsruhe has shown that it considers instruments such as the bailed-out fund to be insufficiently democratic at best. But the political fact is also inescapable: the weakening of the German party system has led to a change in its institutional structure, making the chancellery an increasingly powerful entity detached from the dynamics of the Bundestag. The real danger is that with the fragmentation of the German legislature, unscrupulous political entrepreneurs such as the liberal Lindner or the CDU candidate Merz could jeopardize government policy by mobilizing a relatively small minority of MPs. The effectiveness of such maneuvers was seen in Thuringia, when the conflict between party currents and Berlin almost led to a government tolerated by the radical right.
The Federal Republic is essentially too strong not to play a leading role in the Union, but it is also too weak to be able to impose its will. Aware of this, Germany was able to negotiate its return to the European community, both after 1945 and 1989, thanks to what the historian Andreas Rödder called “safeguarding power by renouncing power”. An example? For some months now, a so-called “network approach” to Russia has been emerging in the corridors of Berlin, i.e. the elaboration of a three-way consensus between France, Germany and Poland to allow us to manage our shared, troublesome neighbor without bypassing or irritating the nations most suspicious of the German overtures to Moscow. Perhaps it would be time for the same blueprint to be adopted for the Eurozone governance. Progressive parties (the Social Democrats and Greens above all) will be crucial to wrestle Germany’s national narrative on Europe away from the conservative rule-by-immobility and propose immediate reform packages. The proposal to introduce a bank deposit insurance by finance minister Scholz followed precisely this logic: to serve Europe by escaping the trap of immobility and framing the discussion in terms beneficial to the country. Given the depth of the reforms that fiscal integration will inevitably require, this time the proposals will have to come from several political levels: from MPs, as already mentioned, but also from banking authorities, economists, political parties. German authorities are well-placed to launch this debate thanks to its dense network of companies, schools abroad, unions and foundations. Germany is also endowed with immense moral capital and, when willing, with the ability to listen and mobilize ad-hoc coalitions.
It will not be easy. A political revolution will have to be carried out, linking internal and external policy and achieving in few months what should have been a decades-long roadmap. Political fragmentation, stagnation and a succession of crises have accelerated the train of European decline that departed in 2008. But as Walter Benjamin once put it:
Marx says that revolutions are the locomotive of world history. But perhaps it is quite otherwise. Perhaps revolutions are an attempt by the passengers on this train — namely, the human race — to activate the emergency brake.