Global Insight

May 27, 2013 7:19 pm

Global Insight: Germany hits back over superpower resentment

Demonisation of Europe’s economic powerhouse alarms Berlin

The lot of a superpower can be thankless. Everyone expects you to act, but once you do, you are inevitably criticised for the action taken.

For policy makers in Washington, who have dealt with the contradiction for decades, it is largely considered part of the cost of doing the world’s business. Despite residual prickliness, Beijing has begun to adjust to global magnifying glass as well. But nowhere does the mantle of international leadership seem to sit more uncomfortably than in Berlin.


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The eurozone crisis may have lost its urgency in the financial markets, but the prolonged and deep recession in much of the region’s periphery has led to a public backlash against political elites. More and more, that resentment is aimed at Germany, Europe’s economic superpower, which is portrayed as quashing any hope for growth by a single-minded focus on deficit cutting.

From the highest reaches of the German government down, that criticism is seen as misguided scapegoating. But some are less kind, characterising it as ingratitude to a country that helped mobilise hundreds of billions of euros in sovereign and bank bailouts. You are called on to act, and you are criticised for acting. Welcome to superpower status.

Given Germany’s unique history in Europe, the criticism seems to rankle in Berlin more deeply than in other superpower capitals. It is difficult to have a conversation with Bundestag members about Germany’s role in the crisis without an MP complaining that some leftwing Greek newspaper has photoshopped German leaders into Nazi uniforms.

Alarmed by the demonisation, Berlin has begun to hit back. And the way it is hitting back says much about its growing disillusionment with the way Brussels has responded to the crisis.

First, Berlin unveiled a series of bilateral agreements with fellow eurozone countries aimed at fighting unemployment. The first came last week in Spain where the two labour ministries signed a deal that would find 5,000 jobs or apprenticeships in Germany each year to young Spaniards. That was followed by an announcement that Germany’s national development bank would help Portugal restart lending to small companies.

Berlin has been pushing both ideas at the European Commission in Brussels for months. If you are not going to do it, Berlin seemed to be saying, we will do it on our own.

Its other way of hitting back has been far more direct: pressing the commission to implement growth programmes agreed months ago that Berlin believes should have been up and running by now. It has been 18 months since leaders agreed to speed up EU development funds to Greece, but little movement has occurred, German officials argue. European Investment Bank loans to Portugal, given impetus by a €10bn increase in the bank’s capital last year, have been held up. Highly touted “project bonds” – backed by all EU countries to fund infrastructure projects in struggling members – were agreed a year ago but no ground has been broken.

The sudden German fire has struck a raw nerve in Brussels, particularly since many officials believe it was José Manuel Barroso, the commission president, who had to push Berlin to sign up to many of those initiatives in the first place. “Barroso has had to intervene a number of times to remove the blockages created by the German government,” said one commission official.

And Brussels has not been standing still, they argue. Despite hold-ups caused by recipient country bureaucracies, changes in EIB rules or political infighting traceable back to national capitals themselves, many of the programmes Germany complains about are on the cusp of fruition, EU officials insist.

Will such programmes make a difference? Most economists say not. Some 5,000 apprenticeships is not much help in a country where 1.8m Spaniards under 30 are jobless.

But as with most things political, symbolism is important. The German charm offensive may win a few hearts and minds if voters in the eurozone’s periphery can be convinced Berlin is at least as intent on a more European Germany as it is a German Europe, in Thomas Mann’s famous formulation.

But can there be a European Germany that is so openly at odds with Brussels? Europe may be about to find out.

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