Expert Speak Atlantic Files
Published on Nov 02, 2016
It seems that in Germany, as elsewhere, the contest that matters is no longer left versus right, it is open versus closed.
The state of Germany and European integration

Now it is twenty six years since Germany was reunified after forty years of partition. Eleven months after the Berlin Wall came down, the German Democratic Republic, having shaken off the hated Communist regime, joined the Federal Republic of Germany. After half a century of hot war and Cold War, the country was peacefully united again.

Since then, Germany has made great strides in knitting together what belongs together. It was not an easy job. There were hundreds of books outlining how to turn a capitalist democracy into a Communist dictatorship of the proletariat — but not a single one providing any guidance for the opposite process. Inevitably, mistakes were made. But in the last analysis we have succeeded amazingly well in overcoming the incompatibilities, inequalities and disadvantages that were the legacy of partition.

Here are five telling facts.

  1. On an average, we spent about €100 billion annually on bringing East Germany's life standard up to the western level and on modernising its dilapidated infrastructure — about €2.5 trillion in the past twenty five years. This means four to five percent of our GNP for a quarter of a century. This dwarfs the Marshall Plan, which amounted to the same percentage of the US GNP but over merely four years. The result is stunning.
  1. Net income per inhabitant rose from forty three percent of the western level in 1991 to 72.5 percent in 2015. Salaries and wages have reached ninety seven percent of the West German level. Productivity is up from 30 to 80 percent. Pensions have meanwhile risen to ninety four percent and will rise to 100 percent by 2020.
  1. Unemployment, while still twice as high as in the West, has dropped to 9.2 percent from 18.7 percent in 2005 (West: 5.7%; the aggregate German rate: 6.4%). Today, 7.9 million people hold a job in East Germany, the highest number since 1992.
  1. Life expectancy has increased by seven years since reunification.
  1. General satisfaction with living conditions is almost as high in the East as in the West — seventy six compared to eighty three percent. Nobody wants the GDR back.

This is true despite the downside of an overall very positive development. Economic growth is weaker in the East than in the West since the industrial output is much lower. One reason is the dramatic de-industrialisation of the erstwhile GDR after the reunification. Most of the goods produced in the East limped technologically fifteen years behind the Western state of the art and simply did not sell any more. While several clusters of prosperity have meanwhile taken shape around Dresden, Leipzig, Jena or Erfurt, hardly any single large German corporation has its central headquarters in the East. The hallmark of the eastern economy are small companies.

The six new Länder of the East comprise sixty two percent of Germany's structurally weak regions. This explains why their tax revenue does not reach more than 64 percent of the western standard. It also explains why the eastern export quota is lower and why East Germany is less entwined and enmeshed with the world abroad.

While several cities and Berlin's metropolitan region are booming, large swaths of East Germany are depopulating. Since 1990, the population has shrunk from 17 to about 14 million. This is mainly due to the westward migration of dynamic and ambitious young people rather than waiting for the economic miracle to come to them, they decided to go West. One consequence is that East Germany is aging even faster than West Germany.

While several cities and Berlin's metropolitan region are booming, large swaths of East Germany are depopulating. Since 1990, the population has shrunk from 17 to about 14 million.

There is still is a palpable divergence of some fundamental attitudes. Small wonder, though, since it is not so easy to wipe out forty years of partition and the particular mental cast and mindset those years imparted to almost two generations. Economically, however, the East Germans are catching up. In most other respects they have also arrived in united Germany. It is certainly not without significance that the top jobs of the Federal Republic, the presidency and the chancellorship, are held by two East Germans, Joachim Gauck and Angela Merkel.

Political situation

Now let us move to Germany's current political situation. What we see there today is the rise on the right of rampant populism: of nativism, nationalism, protectionism, xenophobia and homophobia. The phenomenon is not unknown in West Germany, but is particularly pronounced and poisonous in the German East. The number of violent xenophobic incidents per one million inhabitants is three to six times higher there than in the western part of the country, although there are hardly any foreigners at all.

However, what we are dealing with here is not at all an exclusively German phenomenon. It is equally manifest in the United States and in many EU countries. The names Donald Trump, Marine Le Pen, Geert Wilders (Netherlands), Norbert Hofer (Austria), Christoph Blocher (Switzerland), Beppo Grillo (Italy), Victor Orban in Hungary and Jaroslaw Kaczynski in Poland remind us a few others in Scandinavia that we are facing a challenge to all western democracies. Frauke Petry, boss of the Alternative for Germany (AfD), is the German face of a far more general movement flaunting anti-immigration, anti-Islam, anti-globalisation, anti-free-trade, anti-elite slogans. It wants to build fences and walls. Some call it identity politics. Its salient features are worries about Islamisation, about losing their cultural distinctiveness, their ethnic homogeneity and, as some right wingers would put it, racial purity. The spectre of ethnomorphosis — "Umvolkung" in German — is haunting them.

It seems that in Germany, as elsewhere, the contest that matters is no longer left versus right, it is open versus closed. The establishment parties, both of the left and the right, are being disrupted. The losers from globalisation are challenging mainstream orthodoxy A new political alignment erases the old left and right paradigms: labour versus capital, workers versus business, regulation versus free enterprise. Instead, pro- and anti-global integration forces dominate the new alignment.

It seems that in Germany, as elsewhere, the contest that matters is no longer left versus right, it is open versus closed.

As a consequence, the partisan map is redrawn everywhere across the West. This goes for most European countries, and it goes for Germany in particular. In the first Bundestag of 1949, eleven parties were represented. After the introduction of the five percent clause in 1953, their number was reduced to three — Christian Democrats, Social Democrats and Free Democrats. In the 1980s, the Greens joined them, after reunification the post Communists. Now the populist Alternative for Germany seems likely to poll around 15 percent in next year’s general election. Henceforth we shall have a six-party parliament.

Withering old parties

Support for the old parties is withering. The two Volksparteien, the Christian Democratic and Social Democratic "tent" parties, used to get 90 percent of the vote. By 2013, their joint share had shrunk to 67.2 percent. Current polls give them a meager 52 percent (32 and 20). In recent regional elections, they even failed to marshal a majority between them; in Berlin the CDU achieved only 17.6 percent, trailing the Social Democrats' 21.6 percent, while the Left won 16.6 %, the Greens 15.2% and the Alternative for Germany 14.2 %.

If the shrinkage goes on at the federal level, the Volksparteien may no longer be able to form a grand coalition. In itself, this may not be a bad thing, for both in Austria and in Germany we have seen that grand coalitions asphyxiate the political debate. But it will get ever more difficult put to together a majority capable of effective governing and making sure that emotion does not triumph over reason in our politics. This is more true when the fashion for referendums gains adherents. Nothing will be simple anymore.

The rise of the populists in Germany is entirely due to the refugee tsunami that swept close to a million asylum seekers and economic migrants into the Federal Republic last year. In the view of many, it was Angela Merkel who opened the flood gates. At the time, her high-minded "welcome culture" was greeted and supported by hundreds of thousands of volunteers taking care of the shelter seeking. But the more of them came, the more the doubts kept growing that we could manage the influx. Merkel’s mantra, "Wir schaffen das!" (We can do!) was not undergirded by a concrete plan how to organise, finance and administer the issue. It became less persuasive by the day as it became clear that we cannot accommodate all the downtrodden, "the tired, the poor, the huddled masses yearning to breathe free," to quote the inscription on the Statue of Liberty. The insight gained wide acceptance that our open arms, the welcoming culture we were so proud of, might prove our undoing unless we could share the burden in Europe, a goal that turned out depressingly elusive. So limiting the influx became imperative politically as well as morally for two reasons: to assure the State’s capacity to act and to maintain the societal support for a humane reception of the refugees. "Limitation", said Germany’s President Joachim Gauck in Davos, "is not per se unethical. Limitations helps to shore up acceptance."

It took Chancellor Merkel a whole year to admit that letting more than a million migrants into the country in one fell swoop last year had alienated many voters, leading to very bitter losses for her party.

While still not accepting a cap on the number of newcomers, she admitted that she would turn back the clock on her refugee policy if she could, ruefully adding: "Nobody, including myself, wants a repeat of this situation." Such a repeat is obviously prevented by the Balkan countries closing their borders and by the much criticised deal with Turkey. While still almost 100,000 refugees came last January, by now it is only a monthly trickle of around 15,000. But the fear of another wave of refugees, especially from Black Africa, and the cumulation of terrorist acts, several of them committed by radicalised young men infiltrated in the guise of refugees, keep the Germans on edge.

Driven by the migration crisis and her response to it, Merkel has suffered a year-long decline in popularity. She is wounded although still standing. Barring untoward events, however, and in the absence of a promising competitor within her own party or any other party, the prospect of her running and winning a fourth time is by no means unrealistic. It is a moot question, though, with which party or parties she would be able to form a coalition.

Sorry state of EU

One reason why one might want to cross one's of fingers for her is the sorry state of the European Union. The EU has been battered by a succession of unprecedented crises. The global financial crisis in 2008, triggered by the collapse of Lehman Brothers, was followed by the Greek debt crisis, the Ukrainian crisis, the crisis of the Middle East, the refugee crisis, the terror crisis and, most recently, the Brexit crisis. None of them is resolved, all of them smolder on.

Externally, the EU is encircled by a "ring of fire", threatened by Putin’s hybrid war designs as well as by a spillover of the Middle Eastern chaos. Internally, it is in danger of unraveling. An eastern group refuses to accept migrants; a southern group says no to strangulating austerity policies; both of them resent the preponderant influence of Germany. The former vilify Chancellor Merkel, the latter malign Germany's Finance Minister Schäuble. While they even may have a point, the simple truth is that without Germany taking the lead, the EU stands no chance of reinventing itself. A brief glance around the Brussels Community should suffice to convince any objective observer that none of the other current leaders has the wallop and the wallet to stop the drift and redefine the essentials of the European project. The new Angela Merkel — the one who would, if she could "rewind time by many, many years" — is the only one who’s got the clout, the determination and, hopefully, the humility to guide Europe toward new horizons. As Gideon Rachman put it in the Financial Times the other day: "Many European governments harbour resentment against Mrs. Merkel. But they will miss her ability to keep Europe together when she finally falls."

The new Angela Merkel — the one who would, if she could "rewind time by many, many years" — is the only one who’s got the clout, the determination and, hopefully, the humility to guide Europe toward new horizons.

At any rate I would say: Don’t count us out yet. Europe has gone through many previous crises, and it has come out of each of them stronger than before. The current multiplicity of crises is an enormous challenge, but the awareness is growing in many quarters that it presents also a unique opportunity to give Europe a second wind.

In my view, and not in my view alone, we simply have to give fresh punch and purpose to an association that has served us extremely well for nearly sixty years. This requires two different approaches. On the one hand we need less Europe, one the other hand we need more Europe.

Less Europa means that the EU Commission should finally get serious about the principle of subsidiarity. Standardising the curvature of cucumbers, the shape of showerheads and the design of vacuum cleaners or olive oil flasks is not the be-all and end-all of European politics. Brussels does not have to decide everything. Decisions should be taken at the lowest possible level — local, regional, national and on the European level only if absolutely necessary.

More Europe means lifting our sights to higher purposes again. We need a common fiscal policy, a common social policy, a common foreign and security policy, and we should seriously envisage a single European army. All this will certainly take time to materialise.

The United States of Europe may still be two or three generations away, yet the United Europe of States should at long last come into being.

Mind you: It may not be an ever larger, ever tighter union. In fact, it could become a much looser consociation, with an outer ring of peripheral states participating á la carte, at their own pace and financially banking less on the Commission in Brussels and the ECB in Frankfurt, and a smaller, much tighter core sharing the euro and marching in step toward the old goal of an ever closer union — less than a federation but more than just a confederation.

Half a century ago, Chancellor Konrad Adenauer said: "European unity was the dream of a few. It became the hope of many. Today it is a necessity for all of us." I think that this still holds true.

One utterly compelling reason to move speedily and unflaggingly ahead is demography. In 1900, the Europeans accounted for twenty percent of mankind. Meanwhile their share has plummeted to barely eleven percent, and it is going to drop further: to seven percent by 2050 and to four percent by the end of the century. Not a single European nation will muster even one percent of the global population. I think this is the most powerful argument for going forcefully ahead with European integration and for resisting the nefarious trend toward renationalisation or disaggregation. We simply have to hang together if we don’t want to be hanged separately.

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