The German Way to European Integration – 23/06/13

BRUSSELS – In the 1980s, in the course of their daily activities, German diplomats used to flag specific measures that would promote European integration. The Foreign Minister Hans-Dietrich Genscher used to give the go-ahead, reportedly without a thought. Since then much has changed.

institutions such as the Constitutional Court or the Bundestag have now been
called to judge the legality of debt purchases by the European Central Bank or to
approve or deny the disbursement of financial assistance to countries in
distress. These institutions are now judged by many in and out of Germany as an
obstacle to Europe’s financial recovery. The Bundestag is seen as a second
European Parliament, given its importance in European decision-making.

blame this trend on the upcoming political elections in September that are seen
as encouraging Germany to become more and more inward-looking. According to
this line of thought, a nervous German electorate is feeling under siege and is
therefore allowing its own institutions to hold a power of veto over the future
of the Union. But in fact, the trend has little direct link to the upcoming
vote and, on the contrary, is actually directly proportional to the process of
European integration.
"German institutions are strengthened as the European Council becomes
stronger and as the other European institutions become weaker,” says Anne-Marie
Le Gloannec, a French scholar of Germain affairs and a professor at the
Institut d’études politiques in Paris. For decades, the pendulum’s swing favored
the Community method. Today, the system of communicating vessels is
strengthening Germany at the expense of Europe, just as many European countries
deal with their own fragile institutions. Spain faces a deep crisis of its regionalism,
while Italy is struggling with the upheaval of its political parties.

Several times in recent years, Germany has offered to
press ahead towards greater European integration. In 1994, Wolfgang Schäuble
and Karl Lammers, leading figures in Chancellor’s Helmut Kohl
Christian-Democratic Party (CDU), launched a proposal for a federal Europe. Then
again, during the Convention that led to the Lisbon Treaty. Chancellor Angela
Merkel also tried to follow this road in the midst of the debt crisis, opening
the door to a mutualisation of public debts in return for a transfer of
sovereignty from the periphery to the center.

Germany had joined the euro on the basis of a number
of principles, including the no bail-out rule of countries risking default and the
non-monetization of debt. Both principles have been called into question by the
debt crisis. To break the political and institutional deadlock, Germany again proposed
to focus on a more federal Europe. As its partners remained at best silent or even
opposed to the idea, one can only expect a nationally inward-looking reaction. As
a result, the Bundestag, the Constitutional Court and even the Bundesbank feel
invested with new powers to inquire into any controversial decision taken at the
European level.

In recent days, the German Constitutional Court has
begun to consider claims against the European Central Bank’s plan to buy
government debt to ease tensions on financial markets. Expectations are for a
Solomonic judgment which ultimately won’t call into question the bank’s choices.
Meanwhile, however, Schäuble, currently the Finance Minister, admitted that any
decision to implement debt purchases would trigger a debate in the Bundestag,
with the resultant risk of endangering the monetary institute’s independence
from the political realm.

"Disappointed in Europe, the Germans have given
new powers to their own democratic institutions”, says Sylvie Goulard, MEP and a
French liberal. “But then, Germany’s real strength lies with its democratic
institutions, rather than with its economy." Worried by the uncertainty
triggered by the debt crisis and overall by the economic globalization, the
German political establishment sees the Bundestag’s and the Court’s increased
role as a way to reassure the public opinion and protect itself from any
criticism at home.

Fully aware of their increased influence, these same
institutions have taken on a new role. The president of the Bundesbank Jens
Weidmann is so much more vocal against the choices of the ECB’s governing
council because he knows he has wide support among people in Germany. A few
days ago, the newspaper Handelsblatt quoted the leader of the Liberal Party (FDP)
in the Bundestag, Rainer Brüderle, as saying that a strengthening of the
Bundesbank in the Eurosystem would better reflect Germany's contribution to the
euro area.

"I do not believe, however, that Ms Merkel is totally
happy with this situation–says Ms. Goulard–On the one hand, she is fine with
it because she can play on various levels", both reassuring the German
people and justifying her policies before the citizens of Europe. "On the
other hand the role of the Bundestag or of the Court makes her life more
complicated by reducing her room for maneuver." The result is that Germany
has lost the Community method embraced by Genscher. Like Mr. Jourdain in
Molière's The Bourgeois Gentleman, who
was famously able to speak in prose without being aware of his talent, Berlin
is instinctively intergovernmental without saying it.

In 2012, Germany signed an agreement with 24 other EU countries to
establish a new fiscal compact, a treaty in fact born out of the EU Treaties. More
recently, it announced new bilateral agreements to combat youth unemployment,
bypassing the Commission. The country is ready, if there is no accord among the
27 member states, to strengthen the automatic exchange of banking information between
those countries that are willing to pursue this path. In the same way, Berlin
opted for the enhanced cooperation procedure with 10 other governments in order
to introduce a tax on financial transactions.
The reason for this trend is to be found in the experience of a chancellor whose
idea of ​​Europe is more geopolitical than federalist. In 2010, during a speech
in Bruges, Angela Merkel praised "a coordinated action“ among
governments "for which we are
responsible but all working towards the same goal". Above all, the
weakness of Germany’s partners explains the swing in the pendulum towards a
greater influence of its democratic institutions. The outcome of the next political
elections, whatever it may be, is not likely to change this outlook.