25

Will Europe Let Germany Lead?

BERLIN – The United Kingdom’s Brexit vote, Italian Prime Minister Matteo Renzi’s referendum defeat and subsequent resignation, and Donald Trump’s election as President of the United States have created a power vacuum in the West, and in Europe. At a time when Europe needs to make important collective economic and foreign-policy decisions, domestic issues are preoccupying larger European Union member states such as France, the UK, Spain, and Italy. Consequently, there is growing pressure on German Chancellor Angela Merkel and her government to step up and lead.

But while Germany wants to show leadership, it needs European partners who are willing to engage and compromise. Germany’s critics are right to say that it could be more open to other member states’ policy proposals, but many of the complaints leveled against Germany have been unfair – and often self-serving.

For example, the German government has been accused of shunning European solidarity in response to the 2008 financial crisis. But, while German measures have sometimes come too late, or been ill-conceived – such as its “temporary Grexit” proposal – Germany’s government has also agreed to numerous bailout programs, the creation of the European Stability Mechanism, and an EU banking union. What’s more, Germany has borne the largest financial burden.

Germany has also been criticized for not agreeing to underwrite Eurobonds, and for opposing a transfer union. But these arguments have not always been made in good faith: member states such as France want to share risk without ceding sufficient sovereignty over economic policymaking. Germany’s government and citizens are more open than most to the deeper integration required to make the euro sustainable, including fiscal union. But, to achieve that, all partners need to move forward, in terms of sharing policy sovereignty and risk.