With a new Socialist government in Paris and David Cameron’s United Kingdom contemplating whether to stay in the European Union at all, Germany’s chancellor Angela Merkel could use another ally in her campaign for closer economic and fiscal integration in Europe. Neighboring Poland seems a natural choice. It shares many of Germany’s policy priorities, from agricultural policy to fiscal consolidation to strengthening the single market, but Polish strategic concerns trump its economic interests, forcing Merkel into an alliance with President François Hollande of France.
The French might have worried that their German relationship, traditionally the cornerstone of European integration, would suffer as a result of Nicolas Sarkozy’s election defeat last May. Sarkozy, a conservative, backed many of Merkel’s reform efforts while Hollande won both the presidency and a legislative majority for his Socialist Party by campaigning against German-imposed austerity, arguing that the emphasis in Europe should shift to “growth” — which the Germans interpreted as meaning more stimulus spending.
The prospect of Britain leaving the EU, or at least weakening its ties with the continent, is therefore met with approval in Paris. “If Britain wants to leave Europe, we will role out the red carpet for you,” said Foreign Minister Laurent Fabius after Cameron announced a referendum on British membership for 2017, after the next election. Without the British and their insistence on freer trade, the French, who are more protectionist, would be in a better position to force the Germans, who also attach great value to an open single market, into compromises.
Even if Britain decided to stay in after all, France enjoys the support of Mediterranean countries like Greece, Italy and Spain which feel that “German” austerity has been too hard on them, while Berlin has few allies left. Austria and Finland, both members of the single currency union, aren’t particularly loud voices in the European Council. The Czech Republic and Sweden share Britain’s and Germany’s commitment to fiscal discipline and strengthening the internal market, but aren’t part of the eurozone. In the Netherlands, the ruling coalition now includes Labour which is more sympathetic to the French emphasis on “growth.”
A potential German ally, if not a member of the eurozone yet, is Poland. It is the ninth largest economy in Europe and the sixth largest country in terms of population. It is also the biggest power in Central and Eastern Europe. A German-Polish partnership that is supported by other former Soviet satellite states could provide a powerful counterweight to France’s Mediterranean alliance.
Kamil Tchorek made a compelling case for such a partnership in The Wall Street Journal last year. He pointed out that with the exception of Germany, Europe’s major continental powers had all grown wary of austerity. Italy and Spain, while led by conservative prime ministers, argued for a more activist monetary policy on the part of the European Central Bank which they got: Germany was alone in opposing the central bank’s financing of peripheral states’ deficit spending last year, fearful of inflation.
Poland, “undertaking painful reforms to control debt and deficit,” according to Tchorek, “has a genuinely independent central bank whose focus is on fighting inflation.” Just like the old Bundesbank.
Neither the Poles nor the Germans are enthusiastic about the gargantuan dead weight of the Common Agricultural Policy (CAP). Warsaw can’t see why, in a time of such economic danger, the structural and cohesion funds should be cut in the name of austerity while any mention of the CAP is taboo. France has a proportionately smaller agricultural base than Poland but its relatively wealthy farmers get larger subsidies.
Polish prime minister Donald Tusk warned against cutting economic subsidies ahead of European budget talks in November of last year, arguing, “All those who want growth in Europe, all those who think seriously about more jobs, investments to emerge from the crisis, should support Poland in our efforts for a bigger cohesion fund.” Tusk got his wish and cohesion spending was increased by several billion euros, but so were agricultural subsidies.
Germany and Poland, then, seem natural allies for economic and fiscal reform in Europe. Yet we’ll see no such partnership emerging.
While the two Central European states share many commercial and political priorities, their strategic interests are divergent. Part of this is rooted in historical animosity. The Poles are only too familiar with a Germany that “gets too big for its boots,” as Radoslaw Sikorski, the country’s foreign minister, put it in February of last year. The most recent example was when Germany and Russia divided Poland’s territory between them on the eve of World War II. In the Molotov-Ribbentrop Pact of 1939, Germany and Russia pledged non-aggression toward one another and allowed the annexation of respectively western and eastern Poland.
Nazi-Germany violated the pact in 1941 to invade Russia which would lead to its demise as a major continental power for nearly the rest of the century. It wasn’t until after the German reunification in 1991 that the country was in a position again to dominate Europe. The French-West German parity, a condition that had enabled the process of European integration up to that point, came to an end.
As Germany is once again at the heart of European power and in a position to enforce its preferred policy on weaker states like Greece, Italy, Portugal and Spain, Poland sees the writing on the wall. “Don’t get too dizzy with success,” warned Sikorski, who, for good measure, added: “You will not be a benign hegemon in Europe and you shouldn’t even try.”
The position of benign hegemon for Germany is not attainable, and therefore I would propose your actual position in the EU, which is a very honorable one, is the position of the largest shareholder.
German relations with Russia explain Sikorski’s apprehension in part. Especially now that Germany is phasing out nuclear energy and unlikely to meet its renewable energy goals in the short term, it will have to rely more heavily on Russian natural gas imports, which gives it less freedom to conduct foreign policy in the East.
The construction of the Nord Stream pipeline in the Baltic Sea represents a new geopolitical reality in Eastern Europe. If the Germans can import gas from Russia directly, circumventing transit states like Poland and the Ukraine, it is in a position to balance its relations with Moscow at the expense of fellow European Union member states in the region. German foreign policy, which is especially realist under conservative chancellor Merkel’s stewardship, is unlikely to sacrifice amicable relations with the Kremlin to mediate in energy disputes between it and former Warsaw Pact states.
Chancellor Merkel seems to recognize that there is no such thing as a “Polish alternative” for her in Europe and turning to the old axis Berlin-Paris instead, even if it means political union on more French terms.
On the fifty year anniversary of the Élysée Treaty, which sealed Franco-German friendship in 1963, Merkel said she was aware of the “great responsibility” the two powers share to restore economic confidence and growth in Europe.
“It may be our best kept secret, that the chemistry actually works,” she added, dismissing reports of a difficult working relationship between herself and the Socialist French president. The latter said, “The current between us flows without needing any electricity.” It was “the differences that make German-French relations so stimulating,” according to Merkel. Not without reason, The Guardian called it a “Rhine romance.”
Hollande was more substantive when he recognized, “we have a competitiveness problem in France. We lost time in France while Germany pushed reforms and we need to catch up.” It was actually the German left that enacted labor reforms in the 1990s that helped foster the country’s industrial success. While Hollande stressed that France “cannot simply copy the German model,” he sounded far more conciliatory than during his election campaign when Germany seemed to represent to him all that was wrong in Europe.
Economically, it may be to Poland’s detriment when France and Germany dictate economic and fiscal policy between them. The latter will likely weaken its insistence on further liberalization in exchange for French support of budget discipline. But strategically, a strong Franco-German pact in the heart of Europe may keep Berlin from seeking friendship in Moscow, which the Poles would be far more worried about.