This EU Won't Work

There is growing evidence that Germany is using its weight to drive the EU in the direction it favours; towards a federalised Europe. We open with thought-provoking advice from Germany:

http://www.bbc.com/news/av/world-europe-39705689/son-of-nazi-leaders-warning-on-germany

Niklas Frank, son of a wartime Nazi leader, spoke to Stephen Sackur of the BBC’s Hard Talk programme. Frank is not confident that Germany will continue to be contained by its EU neighbours. His advice is, “…don’t trust us [Germany]”. 

Germany is the largest and economically most successful of the EU member states. It has form, historically, which we have assumed it had learnt from and changed. However, in any club or society it is a challenge for the largest, richest and strongest member to keep its, his or her place merely as one among equals. There is evidence from Greece’s experience that Germany is succumbing to the temptations of power. Poland, France and the UK have also experienced recent pressure from Germany.

In the 1960s Germany was still regarded by many as a potentially malevolent power but as every decade passed that feeling diminished. So it is with reluctance that we are now starting to view German power with suspicion once again. We understand the historical reasons why most German governments and citizens support the ideal of European cooperation and want to preserve the EU Project. We also understand why they want to retain the extraordinary economic benefits the country gains from EU and Eurozone membership despite the crushing burden others bear in consequence – would Britons think differently if their situation were similar?

Chancellor Merkel is making increasingly confrontational demands before Brexit negotiations even start and these are being echoed by others, dancing to Germany’s tune. They are refusing to discuss reasonable terms before settling on an unreasonable alimony figure and before we know what that will buy us. And they are now interfering in the potentially explosive situation in Ireland. This is outrageous, malicious and dangerous, yet these people expect us to cooperate on security. It seems that we will be negotiating with child-like bullies rather than grown ups.

The revelations in Yanis Varoufakis’s memoir, “Adults in the Room” (currently being serialised in the Daily Telegraph), show that Germany has recent form for driving impossibly hard bargains. 

In the book Varoufakis reveals and challenges what he refers to as Europe’s ‘deep establishment’, led by Germany. As Greek finance minister for seven months during negotiations on the terms for the repayment of Greek debts, he had many occasions to experience at first hand the pressures from Germany for a strong austerity programme.

Germany sent a senior EU representative to Athens to try to reach a settlement but, according to Varoufakis, Thomas Wieser rejected all proposed solutions in favour of increased austerity.

Meanwhile the Greek government was discussing possible help from China but “Someone had apparently called Beijing from Berlin with a blunt message: stay out of any deals with the Greeks until we are finished with them.”

German Finance Minister Wolfgang Schäuble proposed that Greece should take a ‘time out’ from the Euro but this was overruled by Chancellor Merkel, as were further proposals made by Varoufakis. When asked by Varoufakis whether he should sign the memorandum of understanding, Schäuble is reported as saying, “As a patriot, no. It’s bad for your people.” 

Emmanuel Macron, when minister of finance in France, was sympathetic to the plight of Greece and offered to visit Athens to help find a deal but was prevented from doing so by the President, François Hollande. Varoufakis claims that, “Merkel had heard him and, according to Emmanuel, ordered Hollande to keep Macron out of the Greek negotiations. Merkel’s spell was every bit as powerful as I had imagined.”

Some months earlier Varoufakis had met the then French finance minister, Michel Sapin, who agreed in private discussions that there were alternatives to austerity to assist Greece’s recovery but in public took a much harder line, conforming to Germany’s expectations. When Varoufakis challenged him, Sapin said, “Yanis, you must understand this. France is not what it used to be.” 

Britain is now experiencing the power of Germany in the run-up to the Brexit negotiations. On the one hand Germany is not sorry to see Britain leave the EU because Brexit will reduce the internal competition. On the other hand, Germany does not want a strong and successful commercial competitor just outside the EU’s border.

Britain may be in a better position than Greece to participate in negotiations with the EU, partly for historical reasons: Greece has been overrun by foreign invaders and ruled by dictators while Britain has avoided both (with the possible exception of Cromwell) for nearly 1,000 years. In fact Britain has more often been invader than invaded and has won battles with Germany in the last 100 years, so may have a more robust attitude when approaching the negotiations. The Greek electorate voted with a majority of over 61% to reject the demand for more austerity but the government caved in the face of German pressure. At that point Varoufakis resigned. 

However, we can assume that these negotiations will be tough and drawn out, considering what is at stake for both sides. For the EU, and notably for Germany, a successful Britain could challenge their economic supremacy from outside the EU in ways that it cannot as a half-hearted but fully signed up member.

If the EU, under pressure from Germany, maintains its hard line (which it represents as the EU’s hard line) and Britain maintains its own hard response, then the chances of an agreement being reached are slim. This applies first to the terms for exit, which the EU is insisting must be agreed before there can be any substantial progress on a future trade agreement. 

At their meeting on 29 April, leaders of the 27 states that will remain in the EU after Brexit quickly agreed to the guidelines for the negotiations. The expression of unity was more easily achieved this time than at other recent joint events (see the four parts of State of the Union). It seems that this ‘unity’ was achieved under pressure from Germany’s representatives, who emphasised the risks the EU faces from Brexit and its possible knock-on effects. Net contributors to the EU budget fear that they will have to contribute more; net recipients that they will lose subsidies. The Commission fears that its grand plans will have to be scaled back. These and other fears compounded are driving the EU’s agenda for the Brexit negotiations.

Finance Minister, Wolfgang Schäuble, backed a hard Brexit in comments before the summit. His boss, Chancellor Angela Merkel, had this to say: 

“A third-party state cannot enjoy the same advantages or be better positioned than an EU member state. I have the feeling that some people in Britain maintain illusions in this regard. They’re wasting their time.”

Yet she expects us to pay for losing these ‘advantages’. She’s right that some British people have illusions; some still think Germany has abandoned its desire to dominate its neighbours, but it seems only the methods have changed.

These views are now presented as the unified response to Brexit of the 27 member states. Donald Tusk, President of the European Council, said “It was easier to keep them united than I expected. It is something very promising, it is the first time in our history.” We wonder what would have happened had any members argued against the hard German line. We probably wouldn’t hear about it.  Are these two no longer so firmly in charge?

Are we seeing early signs that the EU is heading towards a supra-national government in its name controlled by Germany in practice? Leaders of most of the EU’s member states should consider Herr Frank’s advice and recall what may happen if they appease Germany when it is strutting its stuff. There is time; it is not yet in full strut. But Britain may be no better prepared than last time.