The turning point in Germany’s strategic thinking towards the EU came in the midsummer of 2011, according to the best-informed analysts in Berlin.
That was when Angela Merkel, the German chancellor, became convinced that short-term “sticking plaster” solutions to the eurozone crisis were no longer adequate to stabilise the euro and that a more fundamental approach must be adopted.
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IN THE FUTURE OF THE EUROPEAN UNION 2013
Yet 18 months on from the party conference in Leipzig when Ms Merkel’s ruling Christian Democratic Union called for big new steps towards “fiscal union” and “political union” to underpin the common currency, the debate in Germany has gone quiet.
The country is in the midst of an election campaign to choose a new government in September and yet the future of Europe and the eurozone is the elephant in the room: everyone knows it is the most important issue facing the next German government but no one is making it a big bone of contention.
One reason is that all the main political parties are broadly agreed that “more Europe” is the right way forward. But none of them is sure how to get there.
The other reason is that the opposition Social Democratic party (SPD), and their allies in the Green party, are conscious that the eurozone crisis plays well for Ms Merkel in the election campaign.
“The chancellor has positioned herself in such a way that people are reassured Germany won’t throw good money after bad,” says Michael Roth, SPD European affairs spokesman in the Bundestag. “Europe is too important [for us] to commit the danger of populism. [So] the SPD has pursued a constructive policy, with a very difficult debate inside the party.”
Angelica Schwall-Düren, Europe minister for the state of North Rhine-Westphalia, and another leading SPD official on EU affairs, says: “Europe will certainly be a theme, but not a central theme of the debate between ... the two candidates [for chancellor].”
That may change, with the launch of a new euro-sceptic party – the Alternative for Germany (AfD) – challenging the political consensus in support of the euro. “We are not anti-Europe but we are anti-euro,” says Bernd Lucke, leader of the new party.
No eurosceptic party has ever gained more than the 5 per cent minimum needed for seats in the German Bundestag, or any state legislature, but if the AfD were to win just 3 per cent support, it might upset Germany’s finely balanced election arithmetic.
Ms Merkel’s CDU, and her liberal allies in the Free Democratic party, are vulnerable to a marginal loss of support.
This has not stopped the chancellor banging her pro-integration drum.
“We need more Europe,” she declared at the annual conference of savings banks in Dresden in April. “We cannot have a common currency where everyone pursues different principles.”
She wants to see the 17 eurozone members, plus as many of the non-euro EU members as possible, agree on much closer economic and fiscal policy to complement monetary union along the lines proposed by Herman Van Rompuy, European Council president. A banking union is the next step. Closer political union is the end game.
Ms Merkel stops short of any measures that might involve the “mutualisation” of debt in the eurozone and mean German taxpayers bailing out bankrupt banks in other eurozone countries.
“The chancellor has killed the subject of eurozone bonds,” says Mr Roth. “If you raise the subject [during the campaign], you can be destroyed politically.”
It means that, while Peer Steinbrück, SPD candidate for chancellor, and Sigmar Gabriel, party chairman, have floated the idea in the past of eurozone bonds, or a common eurozone debt redemption fund, as part of the integration process, they have gone very quiet on the subject now.
The government in Berlin is also divided on the need for full-scale EU treaty change to reinforce the integration process. Both Wolfgang Schäuble, Ms Merkel’s finance minister, and Guido Westerwelle, foreign minister and former FDP leader, have said they think treaty change is essential. But the chancellor now suggests that only minor amendments may be necessary “for the time being”.
In that, she seems to be conscious of what her EU partners can accept – especially France. Ms Merkel is acutely aware that François Hollande, the French president, wants to avoid any treaty change that might split his Socialist party in a subsequent referendum.
Mr Steinbrück does not want to offend Mr Hollande either, as a fellow socialist leader. But there are limits to how far he will go to demonstrate solidarity with the French leader.
On the divisive subject of austerity versus growth, the SPD candidate is determined not to be painted as an irresponsible supporter of deficit-financed spending, any more than Ms Merkel.
Whatever hopes there may be in other eurozone capitals for a post-election change in German attitudes in favour of faster growth and less austerity in the monetary union, no big shift seems likely from any future coalition.
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