January 28th, 2022
Germany’s Traffic light Coalition and Europe
Germany’s new traffic light government states that it wants to further develop a “federal European state.”
On November 1, 2021, a few weeks before the Social Democrats (SPD), the Free Democrats (FDP) and the Greens formed their “traffic light coalition,” former Foreign Minister Sigmar Gabriel of the SPD gave an interview to the Internationale Politik magazine. Under Angela Merkel, he stated, Germany failed to adapt to a completely changed world: “We are facing … tectonic shifts in the world’s power axes. The Germans are not mentally, politically, economically or culturally prepared for this. A nation like Germany, whose prosperity depends on exports, should actually place the world at the center of its political considerations. It was amazing to see that the world and Europe played no role in the federal election campaign.”
He also had harsh words for the EU: “All this talk that Europe wants to become a geopolitical actor has led to nothing. Figuratively speaking, Europeans always want to play in the Masters golf tournament, but as a rule they don’t even know how to play mini golf.”
As per the coalition agreement between the SPD, the FDP and the Greens, the priority of the new German government is a comprehensive restructuring of the EU’s economy and energy supply to achieve climate goals. Olaf Scholz was finance minister when the EU agreed on its largest economic stimulus package: 2 trillion euros for post-Covid recovery and for the green transition. Even then, he left no doubt about his priorities: “Climate change and protecting the environment are the biggest challenges of our time. These issues can only be tackled effectively if we work together. We have to make sure that money flows where it is needed and increase the relevance of sustainability in financial markets.”
Chancellor Scholz’s first trip abroad was to Paris, where he received a warm welcome. President Emmanuel Macron emphasized his close cooperation with Angela Merkel in all areas and his hope that this would continue. Mr. Scholz assured him that he would follow in his predecessor’s footsteps, and that he would not oppose the revision of the criteria of the EU Stability and Growth Pact sought by Paris.
The fact that the German governing parties have set themselves the goal of “further developing (the EU) into a federal European state” in their coalition agreement is in line with French plans. German-style federalism is alien to the statist tradition of France that shapes Mr. Macron’s thinking. But the new coalition’s plan to transfer more and more national competences to European institutions and to “use and take advantage of votes with a qualified majority in the Council” to expand the “strategic sovereignty of Europe” is entirely compatible with the goals of the French president.
However, Chancellor Scholz has yet to earn an international reputation rivaling that of Ms. Merkel. Diverging opinions within the traffic light coalition will hamper him. The FDP will not willingly accept the mutualization of EU debts at the expense of German taxpayers, which they vehemently rejected during the election campaign. But the chances of building a stable front against the wishes of France and the heavily indebted Mediterranean countries have diminished since the United Kingdom left the EU. Brexit put an end to market-oriented German politicians’ hopes that the Union’s debtor states could be fiscally disciplined.
Under President Macron, the Franco-German axis has shifted steadily toward France, and this became all the more evident toward the end of Ms. Merkel’s tenure. During the euro and financial crises, Mediterranean countries turned against her, but France remained neutral, and Germany’s leading role was not seriously questioned. That changed in the wake of the migration crisis of 2015-2016, when the chancellor made the decision to open the borders to mass migration without consulting EU partners.
Ms. Merkel’s plan to relocate migrants to other member states through mandatory admission quotas was met with resistance in Eastern and Southeastern European countries. The EU Commission, backed by Berlin, repeatedly intervened in Poland and Hungary in matters that were rejected by the governments in Budapest and Warsaw as exceeding Brussels’ competences. The former chancellor’s rejection of a “two-speed Europe” once made her popular in new EU member states, but now there can be no more talk of Germany as a middle power that connects East and West. Poland and the Baltic states, in particular, believe Germany is sacrificing their national interests to reach an agreement with Russia over the Nord Stream 2 pipeline.
Different views on foreign policy
The new German government appears intent to reshape the world. The co-leader of the Greens, Foreign Minister Annalena Baerbock, understands foreign policy as “global domestic policy,” one that comes with moral, environmental and feminist demands. She wants to do away with the restraint that has been exercised so far toward human rights violations in China and replace it with a policy of “dialogue and rigor.”
An experienced politician, Mr. Scholz expresses himself more diplomatically. He can also be expected to show more consideration for German businesses by seeking to minimize friction with Beijing. As chancellor, his role is to set guidelines to which the ministers must adhere (the “guideline competence,” as defined by law). But already during the first days of the traffic light coalition, different views on central foreign policy issues had emerged, damaging Germany’s reputation on the international stage. While Ms. Baerbock suggested that members of EU governments boycott the Olympic Winter Games in Beijing, the chancellor, in agreement with President Macron, spoke out against it.
There are also diverging opinions over Nord Stream 2, which Ms. Baerbock opposed before the federal elections. The chancellor has countered that the pipeline is a strictly private-sector project. But, in fact, it is highly political – both because of the importance Moscow attaches to it and because of opposition from the U.S., Poland and the Baltic states. China is threatening to annex Taiwan and take over in the South China Sea while Russian troops are being deployed on the border with Ukraine. But China is far away, and Russia is near; German foreign and security policy will primarily play out in relation to Russia. The question is whether Germany’s “special” cooperation with Moscow can continue if President Putin attacks Ukraine. The messianic Ms. Baerbock appears blind to the fact that Germany’s scope for foreign policy is rapidly narrowing.
New power brokers
In geopolitical terms, France is in a more favorable position than Germany. It is less exposed because tanks would have to cross Poland and Germany before reaching the French lowlands. In addition, France is the geographic link between the north and the south of Western Europe. It is also a Mediterranean country with numerous connections to Africa.
However, France is not the only Mediterranean state that can claim a leading role in the EU. Italy’s influence has grown under the premiership of former European Central Bank President Mario Draghi. The German-French axis is being replaced by the Berlin-Paris-Rome triangle as the Union’s new center of power.
Shortly before Mr. Scholz made his first trip to Paris as chancellor, President Macron and Prime Minister Draghi signed a Franco-Italian cooperation agreement in the Quirinal Palace in Rome, the seat of the Italian head of state. The Quirinal Treaty is the counterpart to the 1963 Franco-German Elysee Treaty, which was supplemented by the Treaty of Aachen in 2019. In Rome, Messrs. Draghi and Macron agreed to close cooperation in the areas of foreign, security, youth and cultural policy. The purpose, said Prime Minister Draghi at the signing, is not only to boost French-Italian relations: “The aim of this agreement is in fact to support and accelerate the European integration process.”
In itself, the signing of the treaty is a success for the two countries. Economically and culturally, France and Italy are closely intertwined, but politically they have clashed several times south of the Mediterranean. The roots of the conflicts go back to pre-World War I imperialism and mainly revolve around the former Italian colony of Libya. Italy had good relations with Muammar Qaddafi and was reluctant to take part in the March 2011 NATO intervention against his regime, set in motion by France and the UK. Today, Italy and France support different sides in the Libyan civil war.
Negotiations for a Franco-Italian bilateral agreement began in 2017 but took a back seat when the left-wing populist Five Star Movement (M5S) formed a government with the right-wing Lega in Rome in 2018. Italy accused France of lacking solidarity in the face of mass migration across the Mediterranean. The conflict escalated in early 2019, when Italian Foreign Minister Luigi Di Maio (M5S) met publicly with a spokesman for the Yellow Vests protests. President Macron responded by temporarily recalling the French ambassador from Rome. Relations normalized only after Lega left the Italian government.
There will be no tension in the Berlin-Paris-Rome triangle if Germany complies with the demands of France and Italy for loose euro criteria and allows the Mediterranean countries to go deeper into debt. This is likely because the FPD has little influence in the coalition and its chairman Christian Lindner will do everything he can to stay in government.
However, it is uncertain what effects a possible political turnaround in France and Italy in 2022 would have. In France, there are presidential elections in April. President Macron will use the six months of the French EU presidency to raise his profile in terms of European policy. In this case, the relationships within the triangle would stabilize. However, should he be defeated by one of the three challengers – Marine Le Pen, Valerie Pecresse, Eric Zemmour – in the second ballot, the cards would be reshuffled. All three represent sovereigntist positions to varying degrees.
In Italy, a possible move by Prime Minister Draghi to the presidential palace could trigger new elections. A turn to the right in Rome would have a less dramatic impact on the European fabric than such a shift in Paris. However, Italy’s newfound international prestige is mainly based on Mr. Draghi remaining at the helm of government and announcing further structural reforms. Should he become president, a politician with less international renown would have to run as prime minister, which could lower trust levels.
These scenarios could take place only if Western Europe’s security is not acutely threatened. If President Putin upholds his threats against NATO and invades Ukraine, it is uncertain whether relations between Berlin, Paris and Rome would be able to cope with the strain.
The views expressed on austriancenter.com are not necessarily those of the Austrian Economics Center.
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