Sometimes, thinking about policy in the European Union (EU) is the same as thinking about German political strategy. The line between the EU’s decision-making power and that of the Angela Merkel, the German chancellor, is often blurred. This is largely due to two main factors: the anonymity inherent in the bureaucracy of Brussels and the monetary union of the Euro. Merkel has emerged as the strong leader that the EU needs, especially because of the faceless nature of the European parliament’s leadership, and the fundamental disconnect between a continent with a single currency but multiple fiscal policies.
Germany, under the governance of Merkel, has gained an important role in the EU in part thanks to its economic prosperity. As a result, Germany is and has been instrumental in the bailout of the PIIGS (Portugal, Italy, Ireland, Greece and Spain), even as it was criticized last year for being too sluggish in enacting emergency stimulus measures. This stranglehold that Merkel has on the economy of struggling European nations can be traced to the interconnectivity of the value of the Euro. Since national fiscal policy can lead to international monetary consequences, Germans feel like they should have a say in their European neighbors’ spending. In addition to the issues of national sovereignty that arise with German control over other countries’ economic policy, the deeply personal effects of a foreign leader deciding if you get your pension, or if your bank account will still be there tomorrow, leads to much resentment among the average citizens of the PIIGS. However, this kind of thinking ignores the fact that Germany – as the economic powerhouse of the EU – is effectively obliged to tax its own citizens in order to bestow favors on these countries in the first place. The lack of freedom that rioters in Athens experience and protest is similar to the German citizenry’s complaint about their hard-earned Euros going towards saving far-off failing states.
For better or worse, the monetary union and fiscal disunion of the EU means that the German elections last week were strongly anticipated. Though Angela Merkel won the elections, it still remains to be seen who is to replace her old coalition partner, the Free Democratic Party (FDP), and whom she appoints as ministers. As a result of this politicking, a lot of decisions within the EU have been put off for the time being. This hold-up has prompted some frustration in Brussels – Merkel’s control over the EU comes with benefits for its other members, like bailouts and increased trade, but it also means that seemingly national decisions such as appointing finance ministers can affect work throughout the continent. As Sylvie Goulard, a leading member of the EU parliament’s Economic Affairs Committee, told the Financial Times: “We are waiting for the council [of finance ministers] like those others once waited for Godot.”
Germany’s central position in the EU has widened the disparity between the power of the German electorate and the influence of the ‘citizens of Europe’ as a whole. People in countries such as Greece have a de facto, unelected leader in Merkel whom they overwhelmingly oppose, and who may not have their best interests in mind. The fact that the “Triumph for the Queen of Austerity” was not welcome in Athens, shows that many Greeks resent Merkel’s leadership, and would have voted against her if given the opportunity. In Germany, however, her election victory was considered a vote of confidence for her handling of the Eurozone crisis. This makes the problem of the incomplete political union of Europe very clear. The 82 million German citizens are to some extent making decisions on behalf of the 426 million other citizens of the EU.
Though the PIIGS would be reluctant to refer to Merkel as their leader, the fact remains that few democratically elected EU officials can rival her position. Martin Schulz, the incumbent president of the European Parliament, is not a household name. And while the presidency of the Council of the European Union has technically belonged to Lithuania since 1 July, represented by Uwe Corsepius, few if any people would acknowledge him to be the official face of the EU. Merkel’s perch atop Europe’s economic engine complements Germany’s desire to control the policies of its fellow members and cements her personal control over the union.
But Merkel needs to be the woman to reform the EU. The discrepancies between the division of power in the EU and its governmental responsibilities necessitate a revamp of EU political structures. The question is whether Merkel and Germany have anything to gain from a political reform. The first step toward change would be centralization, specifically of the central banks of Europe, which up until now have remained autonomous. Delegating more power to the EU would diminish Germany’s special role in the union, tempering resentment among struggling member-states and giving more of a democratic say to the citizens who live under EU policy. Greeks can vote for their representatives in EU parliament, but they can’t vote on the monetary policy decided on in Frankfurt. Germany, however, has been reluctant to go along with the centralization of European banking into one unified institution in Frankfurt. Their stated reason for this hesitance has been that this will cost German taxpayers more money. This unification, dubbed the ‘single resolution mechanism,’ is the first step toward a banking union. ‘Disband or expand’ has been a common notion amongst people discussing the EU: either you centralize government to a greater extent, or you risk the whole union falling apart. European banking reform would be a big step in the right direction, and would account for the biggest transfer of sovereignty since the beginning of the Euro.
The tension between the desire for national sovereignty and the reality of German control is a dangerous fault line beneath the entire European Union project. Ironically, the solution to regaining national control could lie in abandoning more of it. Centralizing historically national functions in the EU may not seem ideal to many member-states, but when compared to the alternative of de facto German control, it may be the best option they have. The contradictory currents of international monetary policy and national control over spending means that somebody has to give if the EU is to succeed. Delegating power to the democratically elected but faceless EU institutions may seem like an enormous task to undertake, but it is essential if this divided house is to stand.