Germany: Europe’s New Superpower Part I

By | October 22, 2021

Germany has emerged from the shadows of the past, and in a short time has become Europe’s political, economic and cultural powerhouse. How will they use their new position of power ?

  • What is Germany’s relationship with the outside world today?
  • What views does Germany hold during the euro crisis?
  • What makes Germany an “export world champion”?
  • How does Germany differ from many other great powers?

After the German war defeat in 1945, West German governments kept a low international profile . Nor did most Germans have any desire for the country to play a prominent role: the experiences of totalitarian rule meant that power was associated with something negative. The dream was to live as in a large and prosperous Switzerland, in peace for the problematic world out there. In 1990, the two German states were reunited . Five states and 16 million citizens of the former communist East Germany (GDR) were then merged with West Germany. After reunification, it gradually became clearer that Germany, with its capital Berlin, would become Europe’s new powerhouse.

2: Out in the spotlight

It started with the artists. They came from all over the world to establish themselves in the German capital. There the rent was cheap and the cultural offer huge. Even the New York Times had to admit that Berlin had taken over the throne as the hippest place on the planet.

Secondly, the German economy emerged from a prolonged depression, which was linked to the difficult rebuilding of the East German economy. Previously, Europe had three relatively large economies, West Germany, France and the United Kingdom. Now the Germans moved sharply, especially in the export sector. There they were bigger than the other two combined.

After the outbreak of the financial crisis (HHD 2009) in 2008, the politicians in Berlin also had to crawl out of the shell. Europe was in crisis, dramatic decisions had to be made continuously, and Germany as the largest economy was given the lead role . Chancellor Angela Merkel was soon to discover that the world’s most powerful leaders, from Beijing to Moscow and Washington, perceived Berlin as more important than the EU headquarters in Brussels. It was her Obama and Putin called, when they had something pressing on their hearts.

3: The euro crisis

According to TOPSCHOOLSINTHEUSA.COM, Germany’s newfound leadership role in Europe was not in the cards. On the contrary. After the victors of World War II occupied the country, they constructed a constitution in which a great deal of power was added to the 16 states. (Germany is a federal state , a federation). The idea was that a country without a strong center of power would to a small extent be able to act as a well-coordinated unit. In addition, Germany was woven into the EU – to such an extent that the country’s policy was Europeanised. Several generations of German politicians perceived themselves as Europeans, and Germany took a very large part of the bill for the financial costs of the EU project.

Opinion polls over several decades have shown that most Germans view European integration positively . They still do, but when the euro crisis was at its worst, many Germans felt that EU cooperation was becoming a burden. Many also wanted the D-mark back. Simply explained, the Germans think that the crisis-stricken European countries had lived beyond their means. They had taken out large amounts of loans without thought for tomorrow, nor were they willing to increase taxes even though the welfare states were becoming increasingly difficult to finance. The result was unsustainable debt growth.

4: Ordoliberalism

Other northern European countries shared this understanding of the crisis, but it was Angela Merkel who had to stand in the spotlight and demand strong savings from the countries in southern Europe. The Federal Chancellor is also influenced by a type of economic thinking that is strong in Germany: ordoliberalism. It means that political authorities must build a very comprehensive system of regulations for the business community, so that the gain from market forces is optimized (to be as large as possible). In the eyes of Merkel and her finance minister Wolfgang Schäuble, the eurozone lacked a good enough regulatory regime. For example, the 18 countries with a common currency had no institution that could monitor their operating public finances.

These factors explain the German government’s handling of the euro crisis. Firstly, it has made it a condition for crisis-stricken countries that need assistance that they must get a balance in the state budgets by putting food after industry. Secondly, they have taken the initiative to build new institutions that will prevent a similar crisis from recurring.

Germany is strong, but is not strong enough to draw a map for everyone else to follow. The decision-making system in the EU is constructed in such a way that one must have broad alliances and accept clear compromises, in order to get through. Therefore, for several years to come, there will be tug-of-war between the member countries, in terms of how much budgetary room for maneuver the countries in the eurozone should have. It remains to be seen whether the euro countries can create strong joint institutions that correspond to the wishes of the Germans.

Germany - Europe's New Superpower 1