Germany: What Hegemon?

Commentary

Since the beginning of the euro crisis, there has been much discussion of actual or potential German “hegemony” in Europe. But Germany's self-centeredness and short-term thinking disqualify it as a hegemon.  

Since the beginning of the euro crisis, there has been much discussion of actual or potential German “hegemony” in Europe. But Germany's self-centeredness and short-term thinking disqualify it as a hegemon.

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Some journalists and academics have described Germany as a “Hegemon wider willen” or a “reluctant hegemon.” [1] Based on this analysis, they have called on Germany to be bolder and to embrace its role as a hegemon. In a speech in Berlin last November, for example, Polish foreign minister Radek Sikorski said he feared German power less than he was beginning to fear Germany inactivity and urged Germany to lead Europe. But the reason Germany does not qualify as a hegemon is not so much its shyness as its self-centeredness and short-term thinking.

According to hegemonic stability theorists, a hegemon sets norms but also creates a system of incentives for those further down the hierarchy to benefit and therefore stay in the system. In particular, it makes short-term concessions to those co-opted in the hegemonic order in order to serve its own long-term interests. One of the paradigmatic examples of hegemony of this kind is the United States after the end of World War II, which in the 1950s allowed Western Europeans to trade preferentially—and in the process discriminate against American imports—in pursuit of its strategic interest in European stability. Thus the US made enlightened use of power.

For hegemonic stability theorists, the alternative to hegemony in international relations is instability. In The World in Depression 1929-1939 (1973), Charles Kindleberger argued that a global economy runs smoothly only in the presence of a hegemon that underwrites stability. In the 1930s after the Wall Street Crash the absence of a hegemon had caused a breakdown of the international system. In particular, Kindleberger criticizes the hesitation of the US to take over leadership of the global economy from Britain. (Interestingly, Germany was at that time in a similar position as the indebted countries now.) As a State Department official in the late 1940s, Kindleberger was one of the architects of the Marshall Plan—an attempt to avoid the mistake he believed the US had made during the Great Depression.

German Finance Minister Wolfgang Schäuble has apparently read Kindleberger and said he believes his insights should be applied to the euro crisis. For example, in a speech just over a year ago, he said that “Kindlebergers zentrale Botschaft ist im Jahr 2010 wichtiger denn je” (“Kindleberger’s central message is more important in 2010 than ever before”: only a “Führungsnation, einen wohlwollenden Hegemon oder “Stabilisator’” (“a leading nation, a benign hegemon or ‘stabilizer’”) can create and maintain a stable global economy. The lesson, he went on, was that Germany and France must in effect become the hegemon in Europe that the world needed and lacked during the 1930s.

However, instead of making enlightened use of power like the US after 1945, Germany has seemed during the last two years to simply impose its own preferences on others in the eurozone, in so far as it could, and to pursue short-term rather than long-term interests. Given Germany’s clear interest in the survival of the euro—not least because its weakness compared to the Deutsche Mark benefits its exports—the equivalent of the US role towards Europe after 1945 might have been to take measures to reduce its trade surplus, to allow a moderate increase in inflation, or to act as a consumer of last resort in order to help indebted economies grow their way out of recession and thus reduce their debt.

However, Germany has consistently refused to take such an approach. Instead, it has insisted on austerity throughout the eurozone, which has made it harder for the periphery to grow its way out of recession and may exacerbate the debt crisis. Thus while unemployment in Germany is now at its lowest level since reunification, it has reached record levels in other countries such as Spain. It appears as if Germany’s approach to the euro crisis is not so much in the European interest as a whole as in Germany’s own national interest. There has surely been no Marshall Plan for the indebted economies of Europe.

In fact, in some ways, Germany has not created stability—the central role of a hegemon – but instability in Europe. Of course, German rhetoric focuses on stability: it talks about a “stability union” and is proud of its Stabilitätskultur, or “stability culture”. But it defines it extremely narrowly: when Germany talks about stability it means price stability and nothing else. In fact, in attempting to export its “stability culture”, Germany has in a broader sense created instability. In particular, its ongoing reticence about the extent to which it will accept mutualization of European debt—apparently a deliberate strategy in order to maintain pressure on indebted countries to reform – has created a climate of uncertainty. Thus one might almost speak of a German “instability culture”.

As I have argued elsewhere, the “German question” has now re-emerged in geo-economic rather than geopolitical form.The size of Germany’s economy, and the interdependence between it and those around it, is now creating instability within Europe. This is exacerbated by German economic policy, which sometimes seems inappropriate for a country of its size. In particular, German policymakers seem to ignore the effects their economy has on the rest of Europe. As Simon Tilford of the Centre for European Reform has argued, “an economy as big as Germany’s cannot depend indefinitely on exports to drive real GDP growth without imposing intolerable pressures on other members of EMU”. Thus German pursues the economic policy of a small country rather than a hegemon.

As a result, Germany has faced, still faces, and will likely continue to face resistance from other eurozone members, including France, to its attempts to impose norms. In fact, although Germany is more powerful than ever before in the EU, it is, as Charles Grant has pointed out, also in some ways more isolated than ever. This is not hegemony: there is a lack of “hegemonic consent”. In fact, if one looks at the current situation in European in a historical perspective, it appears that Germany is in many ways less of a hegemon than it used to be. As a “cooperative hegemon” together with France before German reunification and European enlargement, it successfully “uploaded” its own preferences with the consent of its European partners.[2]

Thus, although Germany is now more powerful within the EU than it has ever been, it is far from being a hegemon—and not because of its “reluctance” to lead, but rather because it is not able or willing to make the sacrifices that hegemony entails. By encouraging Germany to overcome its reluctance to lead, there is a danger of exacerbating the tendency in Germany to impose solutions on the rest of Europe that may seem to be in Germany’s interests but are not in the European interest. We should avoid thinking in linear terms about Germany’s role in Europe: it is not simply a matter of Germany being more of a leader but of how it leads. Similarly, it is not a matter of more or less Europe but what kind of Europe.

In particular, whether its “stability culture” is the product of the collective memory of hyperinflation, ideology or economic interest, Germany needs to broaden its understanding of stability beyond hawkishness on inflation. In order to create stability in Europe in a broader sense, it should do two things. First, it needs to make policy more transparent to others in Europe instead of creating uncertainty in order to maintain pressure on indebted countries or extract extra concessions from its European partners. Second, its policy must be genuinely in the European interest rather than just the German national interest. In particular, that means a plan to create growth for the periphery even if this comes at the expense of Germany’s own short-term economic interests.

There has been much discussion recently about whether the Europe that is emerging from the euro crisis is a “German” one. In a narrow sense, it is. Germany’s increased power and France’s relative weakness has allowed Germany to impose its preferences on others in the eurozone and in the EU. In particular, through the series of measures taken in response to the euro crisis that culminated in the fiscal compact agreed at the European summit last December, it has imposed upon them a German economic model. But Germany is not yet a European hegemon—and is unlikely to become one—because it does not underwrite stability. In that sense, to paraphrase Zbigniew Brzezinski, the Europe that is emerging from the crisis is not so much German as chaotic.[3]

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  [1] See for example Stefan Kornelius, “Hegemon wider Willen”, Süddeutsche Zeitung, 28 November 2010; Christoph Schönberger, “Hegemon wider Willen. Zur Stellung Deutschlands in der Europäischen Union”, Merkur, January 2012; William E. Paterson, “The Reluctant Hegemon? Germany Moves Centre Stage in the European Union”, Journal of Common Market Studies, Volume 49, Issue Supplement 1, September 2011, pp. 57–75.

 [2] On the idea of a “cooperative hegemon”, see Thomas Pedersen, Germany, France and the Integration of Europe (London and New York: Pinter, 1998).

 [3] See Zbigniew Brzezinski, Strategic Vision (New York: Basic Books, 2012).

This article first appeared in IP Journal.

The European Council on Foreign Relations does not take collective positions. This commentary, like all publications of the European Council on Foreign Relations, represents only the views of its authors.

Read more on: European Power, Economic Crisis, German foreign policy leadership

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