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The Fourth Reich

Germany, now the dominant country in Europe, needs to rethink the way it sees itself and the world

July 27


London , United Kingdom of Great Britain & Northern Ireland - 27 Jul 2018 - Ghassan Matar

Following World War II, a German return to dominance in Europe seemed an impossibility. But the euro crisis has transformed the country into a reluctant hegemon and comparisons with the Nazis have become rampant. Are they fair ?

The idea of Germany having an independent national strategy runs counter to everything that Germany has wanted to be since World War II and everything the world has wanted from Germany. In a way, the entire structure of modern Europe was created to take advantage of Germany's economic dynamism while avoiding the threat of German domination. However the basic structure of Western Europe since World War II and of Europe as a whole since 1991 is quickly coming to a close.

The historical patterns of German strategy will soon emerge or albeit in more benign form. It is, of course, always possible that the old post-war model can be preserved. Whichever it is, the future of German strategy is certainly the most important question in Europe and quite possibly in the world.

Heavy accusations have been levelled at Germany -- by some in Greece, in Spain and in France but also by some in Great Britain and in the United States. The euro crisis, a certain breed of politicians, journalists and economists argue, has allowed Germany to dominate Southern Europe and to suffocate it in order to impose its principles even as its export policy has meant that the country has profited from that same currency crisis more than any other country. Germany's image in some countries has become one of an egotistical economic occupier flanked by smaller Northern European countries from the same mould.

The accusations come primarily from opinion-makers in countries that have experienced years of mass unemployment and the anger is palpable, which is why the demons from Germany's past are returning. And it is hardly surprising that those now suffering humiliation would demand payment of past debts.

Germany's historic guilt is now being wielded by the powerless as a weapon to make noise and be heard. Surveys abroad, to be sure, have found that Germans are widely respected overseas. But in Europe today, people are nevertheless quick to cry Nazi when German policy becomes uncomfortable.

The accusations against the German government have a strange dialectic: Germany is dominating, people say, but it isn't leading. It is a hegemon, but a weak one. That, too, leads us to history. In his 1987 book "From Bismarck to Hitler," historian Sebastian Haffner wrote that turn-of-the-century Germany had an "unwieldy size." It was, he said, both too big and too small. That may be true once again.

The fear of German hegemony in Europe is likely nowhere so great as it is in France, which was at least partially occupied by its neighbour three times during an 80-year period. In recent years, "Germanophobia" has increased dramatically across the political spectrum, from Front National to the leftist wing of the governing Socialists.

That has partially served to distract attention from political leaders' own failures to implement reform, but they are nonetheless sentiments that deserve to be taken seriously. The leftist French intellectual Emmanuel Todd warns that Germany is "increasingly pursuing politics of power and of hidden expansion."

Europe, he says, is being ruled by a Germany which, in its past, has constantly fluctuated between reason and megalomania. Since reunification, Todd says, Germany has brought a huge area of Eastern Europe under its control, a region once under the influence of the Soviets, to use it for its own economic aims. In Athens, in a building belonging to the Ministry of Culture, Nikos Xydakis, deputy culture minister for the Syriza government, echoes the sentiment.

"It is as though my country were experiencing the consequences of war," he says. European savings policies have ruined Greece, he says: "We have lost a quarter of our gross domestic product and a quarter of our population is unemployed."

Furthermore, he said, Greece didn't ask for emergency loans, they were forced upon the country together with the cost-cutting program.

"Now we are paying with the blood of our people." Germany, he says, has become too powerful in Europe. The country, he concedes, is a leader both politically and economically. "But those wanting to be a leader have to behave like one too." Germany, he says, should be more generous and stop viewing weaker countries in Europe as its inferiors.

Xydakis says that he has to pay rent for his office because the building was sold to a fund to help pay back Athens' debts. "I feel as though we were in Leipzig or Dresden with the bombs raining down."

The only difference, he says, is that the bombs of today come disguised as savings measures. For him -- just as for almost all critics of German policy -- a single word has become the focus of their complaints: austerity.

It refers to policies of thrift, a concept that has positive connotations in Germany. But in European countries hit hardest by the debt crisis, it stands for a bleak policy of externally-imposed deprivation. Germany isn't just exporting its goods anymore, it is also exporting its rules.

The Nazis called their Germany the "Third Reich" in an effort to place themselves in a line with two previous eras of German dominance. The first was the Holy Roman Empire, born in the Middle Ages. Far from being a nation state, it was an area ruled over by mostly German emperors who controlled a large portion of Europe, all the way to Sicily.

It came to an end in 1806 after Napoleon conquered many areas that once belonged to the empire. The second Reich, according to this count, was the so-called Kaiserreich that Bismarck founded in 1871 after victories over Denmark, Austria and France.

The smaller German states soon joined together under Prussian leadership, which is why Bismarck is considered today to have laid the groundwork for contemporary Germany. On April 1, his 200th birthday will be celebrated. But soon after the founding of the Kaiserreich, a dangerous sentiment began to spread.

It was a German hubris, a feeling of being superior to others, to know better and to be better. But it was mixed together with pusillanimity and a sense of being threatened. Bismarck's reich, under Emperor Wilhelm II as of 1888, was also of an awkward size. It was too large in the sense that it was the most powerful state in Europe, leading France, Britain and Russia to all feel threatened.

But it was too small to rule over Europe by itself. The Germans too had to form alliances -- and the internal and external logic of these alliances was one of the most important reasons for the outbreak of World War I. The Kaiserreich lost, and broke apart in 1918. Hitler believed that his "Greater Germany" was large enough to rule over Europe, but he was badly wrong.

Even with the most brutal of war tactics and oppression, Nazi Germany was unable to defeat the Allies. After the end of the Third Reich, German dominance on the Continent appeared to have been rendered an impossibility for all time. West Germany and East Germany both were initially tentative states that more or less willingly subordinated themselves to their big brothers, the US and the Soviet Union. They ceded to the dominance of others.

West Germany, though, soon developed a new -- economic this time -- instrument of power: the deutsche mark. Because the West German economy grew rapidly and its sovereign debt remained relatively manageable, the German central bank, the Bundesbank, dominated economic and financial policy in Europe in the 1970s and 80s.

Governments in France, Britain and Italy paid close attention to the decisions being made in Frankfurt. Shortly before German reunification, a senior official in the office of the French president was quoted as saying:

"We may have the nuclear bomb, but the Germans have the deutsche mark." François Mitterrand, president of France when the Berlin Wall fell, was not a fan of German reunification.

He was afraid that a German colossus in the middle of Europe might soon begin seeking political dominance once again. British Prime Minister Margaret Thatcher believed so too, as did many Germans, particularly on the left wing. Author Günter Grass believed the country would return to its old hubris, its feeling of superiority. German national team trainer Franz Beckenbauer seemed to confirm as much in 1990 when, after winning the World Cup in Italy, he said: "We are now that number one in the world after long having been the number one in Europe.

Now, we are getting the players from (East Germany). I'm sorry for the rest of the world, but the German team won't be beatable for years to come." In the political realm, too, there were occasional signs of megalomania. Chancellor Helmut Schmidt believed himself to be the best economist in the world in the late 1970s and early 1980s. When he met with US President Jimmy Carter, he didn't see it as a meeting between the big US and little Germany, he saw it as a meeting of big Schmidt and little Carter -- and not because of their physical sizes.

Then, in the 1990s, came Oskar Lafontaine, a member of the Social Democrats at the time. As German finance minister in 1998, Lafontaine undertook the first effort to rebuild Europe according to Germany's vision.

Because he wanted to harmonize European financial markets and was fighting for a currency union, the British tabloid Sun wondered if he was "the most dangerous man in Europe." Ultimately, Lafontaine failed, and the German national team likewise experienced its share of losses, at least until 2014. Furthermore, united Germany initially kept a low political profile and remained modest. But then, the euro arrived, which Mitterand hoped would take away Germany's "nuclear bomb." The euro was supposed to break Germany's economic dominance, but it has had the opposite effect.

The shared currency has bound together the fates of euro-zone member states and granted Germany power over the others. Which is why the "German question" has returned. Is the new Germany too big and powerful for the other European countries or is it too small and hesitant? Hans Kundnani is head of research at the European Council on Foreign Relations, a pan-European think tank based in London.

His focus is German foreign policy and he has written a widely noted book about Germany called "The Paradox of German Power." Kundnani links the old German question with the new debate about Germany's role in the euro zone.

The strength of Germany's economy combined with mutual dependence of the member states has created, he argues, economic instability that is comparable to the political instability that characterized the Bismarck era. The problem, Kundnani believes, is not so much that Germany is exercising hegemonic power in Europe, but that it is only halfway exercising such power.

It is focused entirely on itself -- and it may be too small for the role that it should be playing. "Germany is once again a paradox. It is strong and weak at the same time -- just like in the 19th century after unification, it seems powerful from the outside but feels vulnerable to many Germans,".

"It does not want to 'lead' and resists debt mutualization, but at the same time it seeks to remake Europe in its own image in order to make it more 'competitive.'" "Lead," in this context, means to frequently pay, which is also how Varoufakis sees things.

The Greek finance minister wants Merkel to establish a kind of Marshall Plan, just like the US once did to get postwar Europe back on its feet. A real hegemon like the US, doesn't just establish norms. It also creates incentives for those it rules over so that they remain part of the system.

To do so, it must compromise in the short term so as to secure its long-term interests. Germany, to be sure, has been the primary backer of two Greek aid packages, but they haven't proven sufficient. The new Greek government aims to fundamentally change the euro zone, establishing more mutualized debt and fewer German rules. Others agree.

"This is not a monetary union, It is far more like an empire." Europe could become split between countries with trade surpluses and those with deficits, akin to a German empire in the middle of Europe with the periphery as its hinterlands.

Empire, of course, is another word for Reich. In today's world, dominated as it is by economic issues, rulers and the ruled have ceded their historical roles to creditors and debtors. Germany is Europe's largest creditor. Creditors have power over the debtors: They expect gratitude and they often have clear ideas regarding what the debtors must do so that they can one day pay back the money they owe.

Creditors are not generally well liked. Creditors want to have power over their debtors because they are afraid. Afraid that they won't see their money again. Germany could pay Greece's debts, but not those of Italy and Spain. Germany may be big enough to impose its rules on Europe, but it is too small to be a real hegemon. Just like it was before World War I, Germany is afraid of being encircled by smaller countries.

A part of that fear is that the ECB could ultimately be controlled by Southern European countries and that the power could be transferred to the debtor countries. Germany is acting not like a hegemon, but like a "semi-hegemon".

Though the context was radically different, former Polish Foreign Minister Radoslaw Sikorski also said in a speech in Berlin in November 2011 that he was less afraid of German power than he was of German inaction and urged Germany to take the lead in Europe. Whereas Germany has dominated Europe economically during the euro crisis, it has remained a foreign policy dwarf.

The apex of this refusal to play a significant political role was its abstention in March 2011 United Nations Security Council vote on the NATO intervention in Libya. European partners like France also saw the vote as a step backwards for Germany. After all, the country had been involved in the Kosovo air strikes as well as the Afghanistan war.

Viewed superficially, the call for more German leadership, which has been heard from many Eastern European countries in recent years, stands in marked contrast to the complaints of Germany's economic dominance. But the two are connected. Germany seeks to be an economic power, but not a military one. Its nationalism is based on economic output and export statistics, not on a desire to become a geo-political power.

The same dilemma can be seen in the role Germany has played in the Ukraine crisis. Germany is characterized by a strange mixture of economic assertiveness and military abstinence. For that reason alone, the references to the Nazi period are off base.

It is not about violence or racism. It is about money. And that is a vast difference, even if monetary questions can be uncomfortable as well. But an empire is in play, at least in the economic realm.

The euro zone is clearly ruled by Germany, though Berlin is not unchallenged. It does, however, have a significant say in the fates of millions of people from other countries. Such power creates a significant amount of responsibility, but the government and other policymakers nevertheless sometimes behave as though they were leading a small country.

Germany is, in fact, not big enough to solve the problems of all the others with money. But it would still be important sometimes to show more greatness, sometimes by way of generosity. And it would certainly be easier to make progress in Europe without the new polemic tone from Munich and Berlin. Power and greatness can sometimes be shown by ignoring the inappropriate comparisons, or by elegantly refuting them.

Germany has resisted imposing sanctions on Russia over its undeclared war with Ukraine—a sign, that Germany might once again desert the West in a flirtation with Russia. That interpretation is little more than an urban legend. True, German Chancellor Angela Merkel has resisted blunt sanctions and has taken every opportunity to negotiate with Moscow in her efforts to de-escalate the fighting in Ukraine.

But her approach is supporting sanctions, not opposing them—and it certainly is not appeasing Moscow. From the start, Merkel has played an impressive role in responding to the Ukraine crisis.

In fact, her actions have allowed Germany to assume geopolitical leadership of Europe for the first time since 1945. Dropping her customary style of leading from behind, Merkel immediately declared Russia’s armed takeover of Crimea to be unacceptable in Europe’s hard-won “peace order” of the past 70 years.

Like U.S. President Barack Obama, she sensibly rejected putting Western boots on the ground in a theatre where Russia enjoys overwhelming military dominance. She also agreed with Obama that in order to counter Russian aggression, the West had to gamble on pitting its long-term financial might against Russia’s short-term military muscle.

When it came to implementing this strategy, Merkel took charge of Western diplomacy—a task that Obama, fully occupied with other world crises, essentially outsourced to Berlin. Merkel was the one Western leader who still had Russian President Vladimir Putin’s ear, partly because she speaks Russian (which she learned in her East German school days) and partly because Germany has been Russia’s best Western friend ever since Moscow peacefully withdrew its forces from eastern Germany a quarter of a century ago.

Since the election of President Donald Trump Merkel is realizing that the old status quo where NATO was supposed “to keep the Russians out, the Americans in, and the Germans down is no longer valid and by extension, Germany and Europe are likely to take on a much more substantial and independent role than they have in the past 70 years.

As Brexit nears, the dynamics of Germany’s influence will change rapidly. US influence and the UK has long acted as a counter-balance to German power within the EU. Particularly for those member states broadly sharing the British scepticism towards political integration – e.g. Denmark, Sweden or Poland – the UK offered protection against Franco-German integrationist drives.

They knew that while Germany was powerful, the British generally could be relied upon to stand up to and constrain Berlin.

Germany will thus have to tread more carefully post-Brexit. It will have to avoid the perception that it is pushing other member states around, and instead try to lead through broad alliances where possible.