A German Europe
Illustration by DonkeyHotey
Almost all EU regulations made in recent years show the hand of Germany – starting with the Lisbon Treaty, which remains the EU’s primary law. It was established – during the German EU presidency – with the so-called Berlin Declaration of 2007, following the failure of the constitutional treaty in French and Dutch referenda. The Lisbon Treaty allocates Germany greater voting rights in the EU; the once customary parity with France or the UK is now passé.
In the course of the eurocrisis, the Lisbon Treaty was supplemented by the fiscal union and banking union – again in line with German concepts. The fiscal union makes a Schuldenbremse, or “debt brake”, obligatory for all EU states, while the banking union incorporates wide-ranging exemptions for German financial institutions. The euro rescue fund, or European Stability Mechanism, was also largely structured in accordance with German instructions. Its “fire power” has been restricted and utilization is tied to strict conditions.
Finally, the German government has campaigned for a restrictive economic governance of the eurozone – again with success. While the German current account surpluses, viewed by many experts as partially responsible for the eurocrisis, were granted a kind of general absolution, deficits are now prosecuted more strictly. With the “Six Pack”, the “Two Pack” and “European Semester”, the budgetary policy of the euro states has been confined in a tight corset that leaves hardly any room for anticyclical policies.
Thus the German government was able to oblige the countries in crisis to undergo “growth-friendly consolidation” and “increase their competitiveness”, while proposals from France and other countries largely failed. President François Hollande could neither renegotiate the fiscal pact – a promise he had made prior to his election – nor conclude a genuine growth pact. Both moves failed because of Germany’s opposition and the eurozone is still suffering as a result.