Germany faces a dilemma. It is by far the richest country in Europe. Several years ago, it recognized its economic weaknesses and introduced major reforms. As a result, it avoided the economic malaise that has infected the rest of Europe. At the same time, recognizing its culpability for World War II, it does not want to act aggressively with regard to its neighbors. For several years this has meant German largesse, especially toward countries in southern Europe, many of which appear to be economically crippled.
For months, if not years, many Germans have faulted the country’s chancellor, Angela Merkel, for being too lenient with the debtor nations seeking bailouts. As one German put it, “We keep giving out more and more money when we have problems here at home.“ This came to a head in Greece when Merkel put her foot down, demanding that Greece make major changes by cutting its governmental workforce, which was bigger than that the private sector work force. Merkel was viciously criticized in Greece, where her picture was often accompanied by a swastika.
Discontent in Germany over the eurozone countries with large deficits has come to a head in Germany as well, with the establishment of a new party, or at least an organization trying to become a party. Its name is attributed to Merkel, who has consistently argued that Germany has no “alternative” but to help keep Europe and the eurozone together. Hence, the name “Alternative for Ger-mans.” On April 14, it held its first formal party congress, attended by 1,500 members.
One of the party’s founders put it as follows: “We think that Europe has a big problem coping with the euro as a common currency, since there are member countries of the eurozone which have big competitiveness problems and which actually need a devaluation and can’t have it.” As examples, he cited Italy, Greece, Spain and France. If these countries were to accept a devaluation, it would lead to internal problems for their governments. As we have discovered in this country, once citizens become dependent on government aid, they don’t like it when that support is withdrawn.
Can one realistically expect the Socialist French government to cut back on public services when it is planning to raise the highest income tax bracket to 75 percent?
Importantly, devaluation by these countries would have another result: it would further strengthen Germany’s economic position in Europe.
The problem for Germany and Europe was well summed up by Henry Kissinger, who observed, “Germany is too big for Europe but too small for the world.”
The fact is that Germany is a powerhouse in a damned if you do, and damned if you don’t world. An Irish police officer expressed the view of many in Europe when he said, “I don’t mind Berlin taking a leading role, but I don’t want to take orders from the Germans.” There is a fine line between Berlin leading Europe and Berlin dictating to the European Community on fiscal matters.
As for Germany’s new party, Alternative may have some staying power. For starters, it is being formed by successful, educated citizens. The primary impulse came from a Hamburg economics professor and others, including a former head of the powerful Federation of German Industries. More than two-thirds of the supporters on the group’s home page have doctorates (the key to success in many fields in Germany). The party has more than 7,000 applicants and is working to get it on the ballot in all 16 German states.
The primary casualty of this new party is Merkel. The vast majority of its supporters are former members of the conservative Christian Democratic Party. Germany will have elections in September. No one knows how strong this party will be by then. Most doubt that it will draw more than the 5 percent needed to have representation in the Bundestag. On the other hand, polls indicate that one in four Germans would consider voting for it.
The real danger for Merkel is that she will need votes from the center-right if she hopes to continue to govern. If those votes go to Alternative, the result could well be rule by the Socialists. In Merkel’s favor, the job market is strong and the country is approaching a balanced budget.
Given Alternative’s rise, the next move is up to Merkel. As Poland’s foreign minister put it, “I fear German power less than I am beginning to fear German inactivity.”
Dale R. Herspring, a University Distinguished Professor at KSU, and a member of the Council on Foreign Relations, is a retired U.S. diplomat and Navy captain.