Can Europe Make It?

Economic egoism and liberal dogma

By reducing European solidarity to a question of rules, Germany has become a problem for the European Union.

Steffen Vogel
6 March 2015
Wolfgang Schäuble, 2013.

Wolfgang Schäuble, 2013. Demotix/Gonçalo Silva. All rights reserved.In 1917, French writer Gaston Leroux sent his serial hero, Joseph Rouletabille, on an espionage-mission behind enemy lines. The journalist-gone-investigator was to stop the German military from building a weapon of mass destruction that threatened to annihilate Paris and thereby force capitulation on France. Leroux’s novel Rouletabille at Krupp's  describes in entertaining fashion a dark journey into the industrial heart of Germany at this time, the Ruhr Area. In a crucial scene, his protagonist witnesses a speech by the German Emperor Wilhelm II—the “anti-christ” in Leroux’s words—who directly links the destructive capacities of his country to the enforcement of “German culture” not only in Europe, but in the world.

Today, the Ruhr Area is stuck in a painful process of de-industrialisation and most Germans are tired of war. But it seems the German political elite still feels the urge to spread what it considers to be its culture. This has become visible again in the debates following the election of a new government in Greece. Unsurprisingly, the newcomers in Athens claim that in a democracy the outline of economic policies has to be a matter of political debate and for this reason voting results have to be taken into account. Yet the persistent argument in Berlin, monotonously repeated in each and every discussion on the subject, is that “everybody has to stick to the rules”. Some might understand this as a desperate, and in the end unsuccessful, attempt to block any debate on the austerity policies that especially Berlin is pushing forward in the Eurozone. And while this certainly holds true, there is in fact more to this.

The German government’s insistence on rules is deeply rooted in the tradition of Ordoliberalism that has shaped the policies of German conservatives since the 1950s. Broadly speaking, ordoliberals dislike government intervention in the economy. Instead, everybody shall agree on a set of rules which are then to be followed. The EU’s dealing with government spending is modelled after this theory. Its Maastricht criteria state that a country’s deficit may not amount to more than 60 per cent of its GDP and may not rise more than 3 per cent each year, otherwise the European Commission shall intervene.

In practice, even Germany and France sometimes were allowed to go beyond that limit. But the real problem lies in the idea itself, especially in its characteristic mistrust in people. The insistence on rules is guided by the view that voters tend to be irresponsible and that competing political parties might feel the urge to promise them heaven on earth. Thus it seems wise to effectively hinder new governments from fulfilling their pledges, simply by binding them to pre-existing rules. For German conservatives, the democratic will is, at least potentially, a problem, and therefore one must not let it be enacted that easily. In the view of Germany’s finance minister, Wolfgang Schäuble, you simply cannot debate the bailout-programmes; therefore Greek voters should accept austerity, while their government must be brought to act in a way that Berlin thinks is responsible. To put it bluntly, Schäuble and his fellow-travellers feel the need to stop the government in Athens from acting too democratically.

With a leading power that embraces such an elitist view on democracy, the EU is obviously not well served. For years now, the German public has been told a story according to which bail-out conditions are both necessary and a binding rule. The essence of this tale is, you cannot question a necessity and you have to follow rules.

As this is backed by many German Social Democrats and also partly by the Greens and as domestic media does largely not question it, there is hardly any debate on goals and measures in dealing with the crisis. Only after the victory of Syriza—as to a lesser extent after François Hollande won the French presidential elections in 2012—did a broader discussion in German media eventually make headway. But it still remains dominated by the view that it is all about Greeks claiming something from other Europeans, notably from Germans. Seldom do you find the awareness that there actually is a struggle over different conceptions of economic policies as well as over different notions of democracy.

Today, not only in Germany, but in Europe as a whole, often an understanding of “us vs. them” prevails, while the idea that our problems are indeed common problems and should be solved by a common effort is gradually vanishing.

What does this mean for the future of a united Europe? It indicates that prospects are bleak. On the one hand, many people in the debtor states want to abolish austerity and do rightly expect solidarity from their European neighbours. The success of Syriza will only have been the first in a line of similar events elsewhere in Europe. On the other hand, in the creditor states popular support for European solidarity is shrinking. Not only are right-wing populists rallying against it, but the political mainstream itself shies away from it, to say the least.

That brings us back to German conservatives and their ordoliberal views. While being the strongest hardliners behind austerity, they too have popular backing. Misinformed and scared after years of welfare cuts and crisis, German voters regard Chancellor Angela Merkel as a guarantor of stability. What is worse, many people accept the idea that Berlin is only enforcing rules. Given that, most German politicians will refrain from telling an inevitable truth: for the Euro to work there needs to be, among other reforms, something that in the present situation must sound uncomfortable to many German ears: transfer payments. Their introduction would be a means to tackle the imbalances between the different economies in the Eurozone and thereby create the required stability for the single currency.

Transfer payments between wealthier and poorer regions of course exist in various countries including Germany and mostly go unnoticed. But they have two characteristics that might be hard to defend today, because they are fundamentally opposed to those known from bail-outs. That is, unlike the current loans for Greece and others, they are not to be paid back. And they are even given unconditionally. It’s hard to imagine a German conservative explaining to his voters that a part of their taxes would be sent to the Greek government and that this government wasn’t even bound by any rule on how to spend it.

Domestic opposition in Germany today faces the task of convincing people that European solidarity is beneficial for them, too. This is assuredly a difficult task, but a necessary one. Syriza has brought hope back to many Greek people who suffer from the draconian cuts, but they alone can’t change Europe for the better.

Joseph Rouletabille in the end of course fulfilled his task with the bravura you’d expect from a serial hero on patriotic mission. Back in 1917, Leroux’s novel was written to provide some comfort to a readership living through the third year of a ferocious war, and that included mocking an enemy for mistaking power for culture. While today this sometimes makes a funny read, it also serves as a reminder of the resentment and hostility between European nations in a not-so-distant past. It‘s not worth reviving them for the sake of economic egoism or liberal dogma.

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