BERLIN—The recent European Council meeting seems to have had two clear winners – Jean-Claude Juncker and Angela Merkel. The German chancellor successfully backed the Luxembourger for European Commission president, unconvinced by British Prime Minister David Cameron’s claim that the choice of Juncker might drive the United Kingdom out of the EU. But was Merkel really the summit winner? And is Germany’s relationship with the U.K. now so seriously weakened that Merkel is ready to see the U.K. leave?
In fact, the selection of Juncker is more a sign of German weakness than of strength. He never was Germany’s preferred candidate. Merkel only backed him in the run-up to the summit because of pressure from the center-right European People’s Party, her own political group, government colleagues, and the media, as well as other EU capitals. She was never keen on the idea that the nominal head of the political alliance topping the EU-wide poll should automatically become Commission president. Thus Germany will not necessarily agree to the same selection procedure in the next leadership selection in five years. Merkel approved the European Council’s official statement that it will review the procedure “respecting the European treaties,” a clear offer to the U.K. to reconsider the selection procedure in light of the 2014 European elections and their aftermath.
Particularly over the last few years, Berlin’s long-standing support of the EU’s “supra-national” institutions seems to have dwindled, to the benefit of the more inter-governmental European Council. The German government has become far more ready to criticize the European Commission and Parliament than in previous decades. German support for Juncker may now look like a return to old ideals, strengthening the democratic fabric of European integration as well as the power and legitimacy of its supranational institutions, but Germany’s stance on other important decisions to be taken in the coming weeks will show whether there is a fundamental shift underway or not. It will be tested by the European Council’s effort to impose a work program on the Commission, by the choice of other top EU leaders, and by the political space given to the European Parliament.
Merkel also seems to be convinced that it is not in Germany’s interest to push the U.K. toward the exit. In Berlin, the U.K. is widely acknowledged to be an important pillar of the EU’s foreign, security, and defense policy. Germany’s economic success in the EU and on world markets relies to a large degree on a well-functioning European single market, which is strongly supported by the U.K. Merkel is now likely to become a bridge builder to the U.K., Poland, Sweden, and Denmark, some of which are outside the euro area but see eye-to-eye with her on a number of key EU economic policies.
Germany needs like-minded allies to counter-balance southern European countries, which tend to push for a more relaxed approach to fiscal consolidation and structural reform. Italy, Spain, Portugal, Greece, and, increasingly, France form a kind of coalition opposed to too much economic rigor. Merkel now needs to claw back any apparent concession she might have made to France and Italy at the European Council on more flexible fiscal policies in exchange for their backing of Juncker. The German policy community understands that a more flexible fiscal stance may be needed to stimulate growth and jobs, but the German approach remains rules-based; any challenge to the credibility and enforceability of the Stability and Growth Pact is seen in Berlin as dangerous.
Germany’s challenge in the months and years ahead is to find a new balance between the deepening of the euro area, to make it more crisis-resistant, and to improve the legitimacy of decision-making, and the continuing engagement of non-euro countries, like the U.K., Poland, Sweden, and Denmark, in key aspects of European integration. Merkel also wants to keep the door to future euro area membership open to countries that might be ready to join at a later stage.
The Netherlands and other countries whose outlook is close to Berlin’s are today themselves questioning the respective powers of the EU and national authorities. The British and Dutch review of EU competences is a lightly disguised effort to keep euro-skeptics at bay by showing that the government itself is aware of the need to preserve national prerogatives, while in France the thinking seems to be that on some points less Europe may be better than more. Germany could find allies to renegotiate some concessions so that Cameron can say at home that there can be less Europe — while a deeper EU is achieved on other fronts.
However, this will require decidedly less confrontational action than we have seen from London the past few weeks — which is not a given, as Cameron faces an election in 2015 in which euro-skeptics will have the wind in their sails. Berlin will try to keep the U.K. in, but not at any price.
Daniela Schwarzer is the director of GMF’s Europe Program.
The post Was Germany Really a Winner? appeared first on German Marshall Fund Blog.