The big European crisis can either make or break it!

Jun

20

Germany - a respectful and cooperative crisis manager?

How can Germany lead Europe out of the crisis? Many Europeans sincerely hope that Germany plays a decisive role as a respectful and cooperative crisis manager. The German Europe policy should take the initiative for differentiated integration when trust among Europeans remains in short supply and the prevailing attitude is one small step at a time.

Germany has emerged as the indispensable country and the lender of last resort in a Europe in crisis. Thus, much of the politics of managing this crisis has been played out in Berlin, sometimes more so than in Brussels.

We know that Europe has experienced in recent years the longest and deepest crisis since the very beginning of regional integration, a crisis that began with the bursting of a huge international financial bubble and soon transformed itself into a major European crisis that goes much beyond the economic domain.

In the process, it revealed the limitations of common institutions, the fragility of inter-governmental and inter-country bonds, and the weak foundations of the permissive consensus that had allowed European integration to proceed at pace for decades, as long as it was seen as being capable of delivering the goods.

It also uncovered all kinds of problematic children in the European family and exposed the limitations of political power set against a borderless economy that sets the pace and often dictates the rules. The crisis has shifted the balance of power inside Europe in a big way at a time when the tectonic plates of the global system are also shifting and the centre of gravity is moving from West to East.

Germany has emerged as the indispensable country and the lender of last resort in a Europe in crisis. Thus, much of the politics of managing this crisis has been played out in Berlin, sometimes more so than in Brussels. The Bundestag has yielded more power over European decisions than the European Parliament, while the whole of Europe has had to wait eagerly for the German constitutional court to pronounce on the boundaries of legality of European institutions and policy instruments set up to deal with the crisis.

Although this may have been unavoidable for a while as the biggest creditor, namely Germany, tried to reconcile itself with a very unpleasant reality and often set the terms in a debt crisis of an unprecedented dimension, it is surely not the way to run Europe in the long run.