“German Europe” Replaces “European Germany”

The European Union was designed to contain German power. Now it can’t do without.

After all the wrangling and talk, Cyprus swallowed the bitter medicine — a European bailout conditioned on austerity measures, including a tax on bank deposits. Many analysts argue that the small Mediterranean country has been forced to succumb to the will of Germany.

There is a historic irony behind the fact that Southern Europe sees itself under the German jackboot, namely that the European project’s very purpose was to contain German power and allow the country to live peacefully with its neighbors. The phrase used in Berlin, Paris and Brussels was a “European Germany not a German Europe.”

After the latest crisis in Cyprus, it looks increasingly like a “German Europe,” however, because the continent is being shaped by Germany’s economic and fiscal policy preferences. Berlin has become the de facto capital of the European Union.

This shift in power has not gone unnoticed in other European capitals even if the mood in Berlin is far from triumphant. If, say, Britain had been in such a leading role, the island nation’s press would revel in the glory.

Instead, British newspaper are highly skeptical. As early as August 2011, the Daily Mail newspaper wrote of a “Fourth Reich” and accused Germany of using the sovereign debt crisis to “conquer Europe.”

[Financial markets] may hope their salvation, apart from pulling out of the single currency and devaluing, would be to accept Germany properly bolstering the euro and effectively colonizing the eurozone.

According to the Daily Mail, this would entail Germany dictating economic, social security and tax policies to indebted eurozone states and imply a loss of sovereignty “not seen in those countries since many were under the jackboot of the Third Reich seventy years ago.”

Every spending department in every government in the eurozone would have its policy made in the old capital of Prussia.

And if the people did not like their governments being left with fewer powers than a county council, that would be tough. The alternative is ruin.

Where Hitler failed by military means to conquer Europe, modern Germans are succeeding through trade and financial discipline.

Germany is unlikely to counter such anti-German sentiments by changing course because it is convinced that austerity and structural markets reforms are necessary to preserve the single currency which it considers to be in both its own and the European interest.

Moreover, there is an absence of other strong powers to balance Germany. Italy and Spain are preoccupied with their own fiscal problems. Britain stands on the sidelines as it is not a member of the euro and might vote to leave the European Union altogether in a referendum after the next general election. The Franco-German axis seems less effective since the socialist François Hollande replaced the conservative Nicolas Sarkozy as president last year.

Germany hopes this situation is a temporary one as it does not want to lead Europe so overtly. Even if it believes its leadership is needed to prevent the euro from failing, it recognizes that by enforcing and making the rules of the single currency, it risks antagonizing other member states and undermining cooperation between them. For now, though, there is no alternative.