Skip to main content

Germany can't save Europe on its own

By Thomas Kleine-Brockhoff, Special to CNN
June 21, 2012 -- Updated 1018 GMT (1818 HKT)
Thomas Kleine-Brockhoff: Germany's Angela Merkel can't singlehandedly save the euro and Barack Obama's presidency.
Thomas Kleine-Brockhoff: Germany's Angela Merkel can't singlehandedly save the euro and Barack Obama's presidency.
STORY HIGHLIGHTS
  • Many are callling on Germany to lead effort to rescue the Euro
  • Thomas Kleine-Brockhoff says there are limits to what Germany can do, given scope of problem
  • He says Germany is too big to be just another nation but too small to dominate the continent
  • Author: Angela Merkel has taken positive steps to strengthen Euro, but needs help from others

Editor's note: Thomas Kleine-Brockhoff is a senior transatlantic fellow at the German Marshall Fund of the United States, where he leads the EuroFuture Project.

Washington (CNN) -- Once again, a swelling chorus is calling on Germany to finally take action. "Start the engines, Angela," reads the colorful headline of a piece whose authors seem to assume that Chancellor Merkel commands the horsepower to save the euro, save the British and American recoveries, and -- as a throw-in -- save the Obama presidency.

If only the Germans showed more leadership and found it in them to roll out "decisive policies," argues Harvard historian Charles Maier, the everlasting eurocrisis could be ended.

It is true that Germany is the pivot in the euro game. Nothing happens if Germany does not consent. But the reverse is not true. If Germany wants something, it does not necessarily happen. That's where the problem of German leadership starts.

Thomas Kleine-Brockhoff
Thomas Kleine-Brockhoff

While much of the world looks at Germany as an ascending economic power within a declining continent, thereby shifting the regional balance of power in its favor, Germans themselves (and certainly their current elected leader) are keenly aware of the limits of German power. History has taught them painful lessons.

Since Germany's emergence as an industrial economy, it has been too big to be one of many in Europe and too small to dominate the continent. The latter proposition has been tested time and again and has usually ended in blood and tears somewhere in Russia.

Among Germans, this experience has produced an ingrained skepticism toward the notion of German dominance, even if it comes in the form of a benevolent hegemony, based on the consent of the neighbors and transfer of wealth to them.

Germans will be quick to point out that Germany is too small to take much of the rest of Europe onto its back. The German economy accounts for only 27% of the eurozone's output. The debt-to-GDP ratio hovers around an unhealthy 80% and might jump to around 100% given the commitments and guarantees to other European nations.

Nobody in Germany has forgotten the enormity of the task to bail out, reform and integrate East Germany after the fall of the Berlin Wall. To this very day, 3% to 4% of GDP are spent on transfers to the former East.

In 1989, East Germany accounted for roughly a fourth of the population of West Germany and no more than a fraction of its economic output. Compare that to ailing Spain and Italy, whose combined economies rival Germany's today. Therefore, it is a fantasy to assume that Germany alone can be Europe's white knight.

Given these constraints, Merkel's willingness to lead Europe is remarkable. She has found a strategy to leverage Germany's limited power. First, Merkel internationalized the European bailouts; second, she broke down the effort into small steps to make them palatable to domestic constituencies in multiple countries; third, she resurrected the French-German alliance as an engine for progress; and, most importantly, she made the markets her friend and ally.

In her assessment, no reform will happen in southern Europe without pressure from the markets. And there will be no pressure from the markets without limits to German largesse.

Unlimited and unconditional help would take away any incentive to reform. That is the reality in a monetary union without political union because the sovereign who bails out is different from the sovereign who reforms. Merkel's strategy is paying initial dividends. Structural reforms in southern Europe are well under way.

But Merkel's leadership has come at a price. Aligning herself with the markets has meant maintaining relentless pressure on the southern countries while keeping the crisis simmering. That has resulted in costly and dangerous brinkmanship and created the myth that the pain of structural adjustment has to be borne by the southern Europeans alone. And it has created a diplomatic challenge.

Even Germany's best friends don't understand why the country opens its purse only at the last moment, but not a second earlier. They mistake strategy for passivity and a realistic assessment of Germany's wealth and power for stingy disciplinarianism.

With the crisis coming to a head, the German approach will be put to the ultimate test. The markets seem to have concluded that no bazooka will end this crisis alone. They now bet on a so-called banking union as a first step toward centralizing power in Brussels. They seem to regard this form of minimal federalism as solution to the crisis.

Merkel endorses core-federalism, at least in principle, but she certainly cannot deliver it alone. Germany may be a reluctant leader, but its followers are even more reluctant. Merkel needs to persuade France, the most sovereignist country in continental Europe, to trade its Gaullist vision of Europe for a more centralized version with some sovereignty moving from Paris to Brussels. She needs to reassure smaller nations that core-federalism is not the equivalent of neo-colonialism.

She needs to convince the southern periphery that joint debt and joint risk in Europe will mean joint control over the budget process, thereby limiting the reach of the nation state. And, finally, she needs to win over the Brits to play along with (rather than obstruct) a more centralized system of governance among the eurozone and even the EU countries that the Brits themselves likely will never join.

Rather than being made the villain, Merkel could use a little help from her friends across the Atlantic.

The opinions expressed in this commentary are solely those of Thomas Kleine-Brockhoff.

ADVERTISEMENT
Part of complete coverage on
April 24, 2014 -- Updated 1918 GMT (0318 HKT)
Frida Ghitis says as violence claims three U.S. doctors, the temptation is to despair, but aid to Afghanistan has made it a much better place
April 24, 2014 -- Updated 1833 GMT (0233 HKT)
Ruben Navarrette says in California, Asian-Americans are against the use of racial criteria in public colleges.
April 24, 2014 -- Updated 1844 GMT (0244 HKT)
Heidi Schlumpf says if the Pope did tell an Argentinian woman married to a divorced man that she could take Communion, it may signify a softening of church rules on the divorced and sacraments
April 24, 2014 -- Updated 1629 GMT (0029 HKT)
Norcross, Georgia, Chief of Police Warren Summers says the new law that allows guns in bars, churches and schools will have unintended dangerous consequences.
April 24, 2014 -- Updated 1742 GMT (0142 HKT)
Mel Robbins says social media is often ruled by haters, and people can be brutally honest.
April 24, 2014 -- Updated 1644 GMT (0044 HKT)
Mike Downey says the golf purists can take a hike; the game needs radical changes to win back fans and players.
April 23, 2014 -- Updated 1641 GMT (0041 HKT)
Robert Hickey says most new housing development is high-end, catering to high-earners.
April 23, 2014 -- Updated 1317 GMT (2117 HKT)
Alexander Motyl says as Russian President Putin snarled at Ukraine, his foreign minister was signing a conciliatory accord with the West. Whatever the game, the accord is a major stand down by Russia
April 23, 2014 -- Updated 1229 GMT (2029 HKT)
Les Abend says at every turn, the stowaway teen defied the odds of discovery and survival. What pilot would have thought to look for a person in the wheel well?
April 24, 2014 -- Updated 1104 GMT (1904 HKT)
Q & A with artist Rachel Sussman on her new book of photographs, "The Oldest Living Things in the World."
April 22, 2014 -- Updated 1958 GMT (0358 HKT)
Martin Blaser says the overuse of antibiotics threatens to deplete our bodies of "good" microbes, leaving us vulnerable to an unstoppable plague--an "antibiotic winter"
April 22, 2014 -- Updated 1737 GMT (0137 HKT)
John Sutter asks: Is it possible to eat meat in modern-day America and consider yourself an environmentalist without being a hypocrite?
April 22, 2014 -- Updated 1538 GMT (2338 HKT)
Sally Kohn notes that Meb Keflezighi rightly was called an American after he won the Boston Marathon, but his status in the U.S. once was questioned
April 22, 2014 -- Updated 1256 GMT (2056 HKT)
Denis Hayes and Scott Denman say on this Earth Day, the dawn of the Solar Age is already upon us and the Atomic Age of nuclear power is in decline
April 21, 2014 -- Updated 2036 GMT (0436 HKT)
Retired Coast Guard officer James Loy says a ship captain bears huge responsibility.
April 21, 2014 -- Updated 1708 GMT (0108 HKT)
Peter Bergen says the latest strikes are part of an aggressive U.S. effort to target militants, including a bomb maker
April 21, 2014 -- Updated 1345 GMT (2145 HKT)
Cynthia Lummis and Peter Welch say 16 agencies carry out national intelligence, and their budgets are top secret. We need to know how they are spending our money.
April 21, 2014 -- Updated 1235 GMT (2035 HKT)
Julian Zelizer says President Obama knows more than anyone that he has much at stake in the midterm elections.
April 22, 2014 -- Updated 1255 GMT (2055 HKT)
Eric Sanderson says if you really want to strike a blow for the environment--and your health--this Earth Day, work to get cars out of cities and create transportation alternatives
April 21, 2014 -- Updated 1408 GMT (2208 HKT)
Bruce Barcott looks at the dramatic differences in marijuana laws in Colorado and Louisiana
April 18, 2014 -- Updated 2047 GMT (0447 HKT)
Jim Bell says NASA's latest discovery supports the notion that habitable worlds are probably common in the galaxy.
April 18, 2014 -- Updated 1817 GMT (0217 HKT)
Jay Parini says even the Gospels skip the actual Resurrection and are sketchy on the appearances that followed.
April 18, 2014 -- Updated 1752 GMT (0152 HKT)
Graham Allison says if an unchecked and emboldened Russia foments conflict in a nation like Latvia, a NATO member, the West would have to defend it.
April 18, 2014 -- Updated 1311 GMT (2111 HKT)
John Sutter: Bad news, guys -- the pangolin we adopted is missing.
April 21, 2014 -- Updated 1825 GMT (0225 HKT)
Ben Wildavsky says we need a better way to determine whether colleges are turning out graduates with superior education and abilities.
April 18, 2014 -- Updated 1026 GMT (1826 HKT)
Charles Maclin, program manager working on the search and recovery of Malaysia Flight 370, explains how it works.
April 18, 2014 -- Updated 1250 GMT (2050 HKT)
Jill Koyama says Michael Bloomberg is right to tackle gun violence, but we need to go beyond piecemeal state legislation.
April 17, 2014 -- Updated 1845 GMT (0245 HKT)
Michael Bloomberg and Shannon Watts say Americans are ready for sensible gun laws, but politicians are cowed by the NRA. Everytown for Gun Safety will prove the NRA is not that powerful.
ADVERTISEMENT