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Discord Mounting in the European Union (I)

Angela Merkel

Instead of overcoming the crisis together, Germany and other European Union member countries are exchanging more and more outrageous accusations. A schism in the ranks of the organization is deepening between the economic locomotive represented by Germany on the one hand and a number of countries in Central, Eastern and Southern Europe on the other. And the fact that many of these states have a bad «credit history» with Berlin could lead to new conflicts which threaten financial losses for all of Europe…

It is no secret that for the past few years one of the perennial «enfants terribles» of the European Union has been Hungary. The leadership of the EU has accused this country of antidemocratic policies, a tendency toward totalitarianism, suppression of opposition media, and leniency toward imperialist and nationalist sentiments. Some of these accusations were founded to a certain extent, and the sides attempted to regulate the dispute through negotiations and changes in national legislation. Others were more of a reflection of the complex and often contradictory history of Hungary. And from this point of view the situation in Hungary is unlikely to have deteriorated far enough in comparison to 2004, when the country entered the EU to the applause of Brussels, to try to reverse this process.

However, there are those in the European Union who wish to do just that, for example, in Germany. Public policy discussions are increasing in this country – especially in light of the approaching elections to the Bundestag in September – as to whether the Germans are obligated to save the Eurozone and the EU as a whole financially. And if they are, whether perhaps the number of the saved ought to be decreased.

Six months ago many people in Germany were not averse to the idea of excluding Greece from the Eurozone. However, now the stakes in these games have gone up considerably. Not only is the Eurozone at stake, but so is membership in the European Union itself. And the main target of the high-ranking German politicians' attacks is Budapest. 

The tone was set by one of the main figures in the unfolding pre-election battle, the Social Democratic candidate for the post of Federal Chancellor, Peer Steinbrück. During public debates with the current Chancellor Angela Merkel, he recommended not negotiating with the government of Hungarian Prime Minister Viktor Orbán, but rather simply «throwing Hungary, which is devolving toward a dictatorial regime, out of the EU». «Hungary's development is running counter to democracy,» emphasized Steinbrück, referring to the constitutional amendments adopted by the Hungarian parliament in March which reduced the powers of the Constitutional Court.

Merkel was not to be left out, and, while seemingly arguing with her opponent, she also spoke very critically of Budapest, stating that «everything possible must be done to return that country to the right path.»

It was clear that even these assertions, whose relationship to purely German problems was distant, were sufficient to cause a row. However, Frau Merkel even tried to embellish her rejoinder to Steinbrück with a joke: «There's no reason to immediately send the cavalry» to Hungary. [1]

Viktor Orbán's reaction was swift. He pointed out that «the Germans have already once sent the cavalry to Hungary, in the form of tanks; however, that was a bad idea which did not work out,» referring to the events of the Second World War. 

This response also overstepped the bounds of diplomatic etiquette to a certain extent. It is well known that in Germany they are very sensitive about any careless remarks about Nazism, the historical guilt of the German people and projections of that history on the present. All the more so since the number of those who want to nail the present German leadership to the pillory of Nazism, appropriately and inappropriately, has clearly grown in response to the European crisis. The visits of Angela Merkel and other German leaders to Greece are regularly accompanied by insulting publications in the local press and photographs of the Chancellor with a mustache. And the mustache is not a tribute to the sharp controversy over same-sex marriages.

However, the reaction of the German political establishment seems overexcited, even against this background. The cochairman of the party Alliance '90/The Greens, Jürgen Trittin, urged Angela Merkel not to put up with insults from Hungary and to admit that «her policy of silent diplomacy with regard to Orbán's slide to autocracy has turned out to be a failure.» Members of the Social Democratic Party of Germany, whose candidate actually sparked the controversy, have demanded that the ruling party of Hungary, Fidesz, be excluded from the European People's Party, a group of conservative parties in the European Parliament. The President of the European parliament, Martin Schulz of Germany, has stated a similar opinion and expressed his confidence that Orbán's protest will be a subject of discussion in the European People's Party. At the same time he called the words of the Hungarian prime minister «so laughable that they are not worth commenting on.» [2].

However, such belligerent rhetoric is unlikely to calm down sentiments in the European Union, where the anti-German vector is clearly gaining force. In particular, accusations that German financial circles are trying to take control of the Eurozone’s economy can be heard even from such respectable banking centers as Luxembourg. The Foreign Minister of Luxembourg, Jean Asselborn, has plainly accused Germany of trying to establish hegemony in the Eurozone, in particular by dictating policy to other countries in the banking and financial sector. «Germany does not have the right to decide on the business model for other countries in the EU,» he stated, adding, «It must not be the case that under the cover of financially technical issues other countries are choked.» [3]

All of these incidents have their own hidden nuances. For example, Merkel's words about the “cavalry” were actually an allusion to Steinbrück's own words uttered in 2009. At that time, as pointed out in Deutsche Welle, he threatened to «order the cavalry to ride out» against Switzerland if it were to grant refuge to Germans who are evading taxes in their home country. Viktor Orbán's response is ambiguous as well. In 1944 Hitler really did send Wehrmacht tank divisions into Hungary; however, the latter was at that time a loyal German ally, which gives the situation additional nuances.

Nevertheless, the main problem of the rapidly deteriorating international atmosphere in the EU is not even in its passion. The main threat is that the conflicts have risen to the level of state leaders, and the fact that they are localized around Germany only emphasizes the seriousness of the problem. After all, one can hardly deny that the German authorities, in seeking a new place within Europe, have themselves to a great extent engendered both excessive illusions and serious suspicions in their partners in the European Union. European Parliament Member Alexander Graf Lambsdorff once called the situation in which Germany found itself after its unification «strategic complacency». However, a number of German experts have made more definite statements in speaking of the danger of a situation where Germany is «becom[ing] the central economic power of a weakening Europe,» and considering the alternatives: Berlin guaranteeing either «a new type of Marshall Plan or just a Versailles diktat without war.» [4]

It is significant that today in the EU the issue is not just an exchange of historical jibes and insinuations. None other than Greek Deputy Minister of Finance Christos Staikouras suggested demanding new war reparations from Germany in autumn of 2012, and even promised to personally calculate the necessary amounts. Of course, according to a 1960 treaty, the then-existing FRG already paid Greece 74 million dollars, as well as separate compensation for Greek prisoners of Nazi concentration camps. However, the Greeks, spurred on by the financial crisis and Germany's ambiguous role in it, are interested in the fate of the national gold reserve, which, as Greek experts believe, the German fascist occupiers shipped out of the country. Furthermore, the repayment of a loan which Athens extended to Berlin during the war upon the demand of the Third Reich may also come up at negotiations. Its value at the time is estimated at several billion dollars, not counting subsequent interest. According to the calculations of a special commission of the Greek Ministry of Finance, Berlin still owes Athens 7.5 billion euros. The National Council for the Claim of German Debts has presented other calculations according to which Greece could demand 162 billion euros from Germany. This amounts to 80% of the Greek GDP. [5]

It is worth remembering that it is thanks to Germany that the European Union's main anti-crisis programs and mechanisms are currently in a «suspended» state. In autumn the country's constitutional court is supposed to announce its ruling on a suit against the European Stability Mechanism (ESM) and Berlin's participation in it. The suit's authors, who are among Germany's leading economists and legal experts, insist that the European Central Bank (ECB), in implementing a program for the unlimited buying of the government bonds of the Eurozone’s problem countries, is violating European laws. According to Joachim Starbatty, professor of economics at the University of Tübingen and activist of the new party of German euroskeptics «Alternative for Germany», «In the Maastricht Treaty it says that the task of the European Central Bank is to stabilize the currency - not to stabilize the Eurozone». [6]

And while the chances of a judgment for the plaintiffs are small, this fact does nothing to calm the European Union; neither do the rapidly growing «trade wars» between Brussels and Beijing and the disputes surrounding the IMF's anti-crisis strategies. The financial and geopolitical stakes in the developments in the European Union are growing noticeably.

(To be concluded)

[1] http://ru.euronews.com/2013/05/21/germany-and-hungary-at-odds-over-orban-tanks-comment/

[2] dw.de

[3] http://top.rbc.ru/economics/27/03/2013/850949.shtml

[4] Kleine-Brockhoff T., Maull H.W. The Limits of German Power // Internationale Politik. Volume 12. 2011. November/December. P.8-11.

[5] http://www.mpa.gr/russian/print.php?id=589

[6] www.dw.de