ECONOMY

Europe after Merkel: will Germany take a tougher approach?

As Europe hurtles towards an angry showdown with Poland over the primacy of EU law, one politician is trying harder than most to slam on the brakes — Angela Merkel.

Speaking on Monday, the German chancellor said the bloc must find solutions that “everyone can live with”. The task of the coming weeks was to reach a compromise that embodies “respect for all member states while not allowing any deviation from our founding principles”.

The stance represents a typical exercise in Merkel emollience, just as Europe faces an increasingly bitter confrontation of law between Brussels and Poland’s conservative-nationalist government.

The EU is preparing to act against Poland in the wake of a ruling by the country’s top judicial tribunal saying parts of EU law are incompatible with the country’s constitution. With many in the European Parliament calling on the commission to withhold money Poland is due to receive from the Covid-19 recovery fund, the country’s prime minister Mateusz Morawiecki accused the EU earlier this week of speaking the language of “financial blackmail”.

Merkel will reprise today the role of mediator she has often played in her 16 years as chancellor when EU leaders gather in Brussels for a meeting that is likely to be dominated by the dispute with Poland. But there is a big difference this time — Merkel is on the way out and this is likely to be the last EU summit she will ever attend.

Poland’s prime minister Mateusz Morawiecki accused the EU of speaking the language of ‘financial blackmail’ during a heated debate with European Commission president Ursula von der Leyen this week © AP

Governments across Europe are wondering what her retirement means for the future of Europe and what changes the new government in Berlin will bring to German policy.

Many in the new coalition now forming in Berlin — an unprecedented alliance of social democrats, greens and liberals led by the current finance minister, Olaf Scholz — have been eager to emphasise continuity. But there are also calls for change and for a fresh approach, especially on eastern Europe.

Some accuse Merkel of appeasing the “illiberal democracies” of the east and deliberately shielding strongmen like Hungarian prime minister Viktor Orban.

“The way Merkel spent years cosying up to the Orbans of Europe and playing down their kind of politics has wrought long-term damage on the EU and its foundations in the rule of law,” says Franziska Brantner, the German Greens’ spokeswoman on Europe.

There are also leading voices among the coalition parties calling for Germany — and Europe — to be less conciliatory in its approach to Russia and China than has been the case during the Merkel years.

Yet there are also fears that a tougher German stance could end up deepening divisions between east and west and increase the risk of conflicts escalating into crises.

Merkel’s admirers say her diplomatic skills were often vital to warding off damaging clashes and healing divisions. She has “exactly the qualities you need to bridge the different points of view and different biographies of nations,” Jean-Claude Juncker, the former president of the European Commission, tells the Financial Times. “She never made a difference between east and west, south and north — she listened to everyone, which explains part of her success in Europe.”

FDP chair Christian Lindner, Green leaders Annalena Baerbock and Robert Habeck, SPD candidate Olaf Scholz and SPD co-chairs Saskia Esken and Norbert Walter-Borjans have been discussing coalition possibilities
FDP chair Christian Lindner, Green leaders Annalena Baerbock and Robert Habeck, SPD candidate Olaf Scholz and SPD co-chairs Saskia Esken and Norbert Walter-Borjans have been discussing coalition possibilities © CLEMENS BILAN/EPA-EFE/Shutterstock

Some worry about the gap she’ll leave behind. “I’m afraid there’s no one to replace her, be it in the EU or Germany, and that’s a problem,” says Linas Linkevicius, Lithuania’s former foreign minister.

Nevertheless, others play down the impact of Merkel’s departure. Juncker insists that her successor as German chancellor is likely to continue the role she played in EU affairs, and avoid a sharp change in European policy. “The EU is never led by one single person,” he insists.

Time for tougher measures

There is one region, however, where Merkel’s absence will be felt especially keenly — eastern Europe. She always fostered close ties to Orban and Jaroslaw Kaczynski, leader of Poland’s Law and Justice party (PIS) and the country’s de facto leader, despite deep disagreements over policy.

Merkel also strongly resisted attempts by some in the EU — particularly the French — to create a kind of two-speed Europe, with a vanguard of like-minded nations moving ahead towards closer integration and leaving more Eurosceptic countries like Poland behind.

“She understood the sensitivities and the mentality of the east Europeans better than anyone,” says Dalia Grybauskaite, the former president of Lithuania. “She understood that after the Soviet occupation we’re very sensitive to any demonstration of force — we’re ready to talk but we don’t just fulfil orders.”

Within Germany, however, many think Merkel was too indulgent towards Hungary and Poland. It’s a view held by many in Scholz’s SPD, which narrowly won last month’s election. Katarina Barley, a leading Social Democrat and vice-president of the European Parliament, says she now expects a change of direction on relations with Poland.

Merkel’s approach — “dialogue, building bridges, no confrontation” — was out of date, she told news magazine Der Spiegel. “The new German government will recognise that dialogue is important, but . . . in this case it’s not enough,” she said. “We now need tougher measures.”

But it might take some time for Germany’s new leaders to agree a coherent approach on eastern Europe. The SPD, Greens and liberal Free Democrats (FDP) are strange bedfellows with fundamental disagreements over fiscal policy, the role of the state and climate change. Some in Berlin worry that they will be too wrapped up with resolving their ideological differences to engage with the outside world.

“The new government will have three parties, two of which haven’t been in power for years, and their focus will very much be on domestic issues,” says Christoph Heusgen, Merkel’s senior foreign policy adviser from 2005-17.

The change of guard at the chancellery comes with Germany facing multiple global threats — an increasingly assertive China under Xi Jinping, a bolder Russia, and a US administration that is pulling back from several regions to focus on restraining Beijing.

“Germany must play a more active role in the world, and Merkel has been doing that,” says Heusgen. “But will the new government do the same? Do they know what huge tasks await them on the international stage, the expectations from around the world? Are they prepared to engage?”

The new coalition partners insist they are, but have signalled they will have different priorities to Merkel. The Greens, for example, favour a foreign policy less driven by Germany’s economic interests and the needs of big business: they want a much more robust approach to China, confronting Beijing over human rights abuses in Xinjiang and the crackdown in Hong Kong. They also want Berlin to stand up more to Russia, which they accuse of “endangering democracy, stability and peace in the EU”.

According to Heusgen, that’s not enough. Other parts of the world like the western Balkans, eastern Europe, Libya and the Sahel will also require Berlin’s urgent attention. “Germany must take on this active role in the world, because no one else in Europe will,” he says.

France’s President Emmanuel Macron greets Germany’s Chancellor Angela Merkel as representatives arrive at the EU-Western Balkans summit in Slovenia earlier this month
France’s President Emmanuel Macron greets Germany’s Chancellor Angela Merkel as representatives arrive at the EU-Western Balkans summit in Slovenia earlier this month © AFP via Getty Images

Meanwhile, Merkel’s departure comes with elections fast approaching that could prove fateful for the European project. Emmanuel Macron will seek a second term as president in April and polls suggest he has a good chance of victory — although he’s no shoo-in with French politics in such a volatile state. Defeat for Macron would deprive Germany of one of its closest allies.

Italy will elect a new parliament by 2023, and the fear in Berlin is that with no party behind him, Mario Draghi, the former head of the ECB and current prime minister, may be eased out of power, ushering in a new era of instability in the EU’s third-largest economy.

Already, some in Berlin are worrying about Germany’s relationship with its allies in the Baltics and the Visegrad group of Poland, Hungary, the Czech Republic and Slovakia, one of the main pillars of German foreign policy under Merkel. “[Those countries’] biggest concern will be: “Who’ll worry about us when Merkel goes?”” says one German official.

Relations between Germany and the EU’s eastern member states were not always as cordial as he suggests. Hungary, Poland and others accused Merkel of splitting the EU in 2015-16 when she tried to persuade them to take in some of the 1m asylum seekers that had crossed into Germany during the refugee crisis. Her support for the Nord Stream 2 pipeline has also proven divisive, with eastern European states accusing her of selling out Ukraine and increasing the continent’s dependence on Russian gas.

But for Grybauskaite, none of that detracts from the positive aspects of Merkel’s approach to Europe. “The younger generation of politicians in Germany and the EU see politics in terms of single issues, like climate change,” she says. “Merkel represents a generation who really saw the big picture.”

Rule of law in the east

Part of that big picture is now a dispute between the EU and Poland that risks spiralling out of control. The disagreement over the Polish constitutional court’s controversial ruling earlier this month is just the latest twist in a conflict that has been dragging on for five years. It has its roots in legal changes introduced by PiS that include a new disciplinary regime allowing judges to be punished for the content of their rulings.

The stand-off could hardly be more sensitive for Germany, given the fraught history of conflict between the two countries. The prospect of Poland quitting the EU and the German-Polish frontier becoming the bloc’s external border is viewed with horror in Berlin. It is an outcome Merkel would see as an enormous personal defeat.

“She doesn’t want to split Europe — it’s the same perhaps for any German chancellor,” says one senior EU diplomat.

But Europe is already split over Poland. Though the European Commission and its president Ursula von der Leyen, a close Merkel ally, are keen to tread softly, the European Parliament and some member states are pushing them to take a tough line on Warsaw over the alleged rule of law violations. On Wednesday, the parliament started a legal action against the commission for allegedly dragging its feet in sanctioning Poland.

Von der Leyen said she was examining three options in the Polish case: bringing an infringement action in response to the Warsaw court’s ruling; withholding EU funding; and bringing a fresh procedure under Article 7 of the Treaty, which permits sanctions for rule of law violations.

According to German officials, Merkel worries that the EU’s actions could deepen the confrontation with Poland, leading to potentially disastrous consequences. “We don’t want to look back in 10 years’ time and say that was the moment when we pushed Poland to quit the EU,” says one. How to deal with the Polish dispute without escalating the situation “is now the greatest challenge the EU faces”.

Resolving the conflict may prove harder without Merkel. The current situation has echoes of a similar stand-off late last year, when Poland and Hungary threatened to veto the EU’s budget and recovery fund over the new rule of law conditionality mechanism which the package contained. The budget eventually went through, but in March Hungary and Poland challenged the rules in the European Court of Justice. Merkel had played a key role in urging them to drop their veto.

“She is a bridge-builder,” says one EU diplomat, who wonders whether Macron can play that kind of role after Merkel’s departure. “Does his character allow it? We hope so.”

“We shouldn’t be trying to isolate or punish Poland, but to solve the problem,” says one senior German official. Dialogue, not confrontation, is needed, he says, to “get things back on track”.

Filling the vacuum

Europe’s leaders are now taking a long, hard look at Scholz and the green and liberal politicians who could sit round his cabinet table, as they assess how the next German government will handle the stand-off. A pragmatic centrist, Scholz himself has been praised by EU colleagues for his role as German finance minister in driving the €800bn post-pandemic recovery fund and the international deal on a minimum effective corporate tax rate which 136 countries signed up to earlier this month.

A paper released last Friday, which will serve as a basis for the three parties’ formal coalition negotiations, was careful to promise continuity. It said Germany would remain committed to Nato and the transatlantic relationship, and to the “rules-based international order” which Merkel came to embody.

Picture of members’ desks and seats in the European Parliament, with Commission President Ursula von der Leyen seen speaking in at a podium in the distance
Many in the European Parliament are calling on the commission to withhold money Poland is due to receive from the Covid-19 recovery fund © RONALD WITTEK/POOL/EPA-EFE/Shutterstock

The SPD, Greens and FDP, the paper said, would seek to “strengthen the EU”, “increase Europe’s sovereignty” and pursue a “values-based” foreign policy that could herald a tougher line on China and Russia.

“We are determined to make the EU more effective and democratic, and will press for an EU that protects its values and rule of law both at home and abroad,” it said.

What that means for the dispute with Poland is still unclear. But some senior officials in Brussels play down the idea that Merkel’s departure will leave a vacuum in EU leadership.

“Germany will always be Germany,” says a senior EU official, referring to Berlin’s intrinsic heft in the European Council. “And don’t underestimate the influence exerted by the [EU] institutions.”

“Rumours about the imminent death of the union have been exaggerated before,” the official says. “It’s the same on this occasion.”

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