Amid the rush of events over the past year it is fair to say that Germany’s place at the centre of power in Europe has been a historic development.
Under the leadership of chancellor Angela Merkel, Germany has at last found its natural place. In recent years Mrs Merkel has often topped the list of the world’s most powerful woman, but her country, with its consensual style of politics, seemed ill-suited to the task of leading Europe.
In a provocative headline in 2013, The Economist annoyed a lot of Germans by describing the country as Europe’s “reluctant hegemon”.
The obscure word hegemon – “one who exercises control over another country or people” – seemed more applicable to Russia’s Vladimir Putin than to Mrs Merkel. While “reluctant” might have been correct, it was hardly fair: for most of the 20th century, European powers did their best to weaken Germany. After 1945, Germans worked hard to lose the art of exercising power, though this has never stopped European cartoonists drawing Mrs Merkel, daughter of a Protestant pastor, in Nazi jackboots.
But all that has changed with the stand-off between Mr Putin and the European Union. It is clear that the Kremlin was blindsided by the swift imposition of European sanctions after the seizure of the Crimean peninsula. With Germany having more trade with Russia than any other European country, it was assumed in Moscow that business would trump politics. Instead Mrs Merkel took a strong stand against Mr Putin’s policy of carving out spheres of influence on his borders.
The central place assumed by the German chancellor is due in part to the weakness of the other big European players. President Francois Hollande of France is hobbled by domestic unpopularity and personal scandals. In increasingly eurosceptic Britain, David Cameron’s leverage in Europe is undermined by the prospect of a referendum, which could lead to a vote in favour of quitting the EU altogether.
The historian Timothy Garton Ash, a leading commentator on German affairs, has declared Mrs Merkel his choice for stateswoman of the year for her commitment to peace and freedom. He notes that she also has the statesman’s essential attribute of luck: the effect of sanctions on Russia has been multiplied by the coincidental collapse of the oil price.
For the first time there is no doubt who rules the roost in Europe. Mrs Merkel speaks more frequently by phone with US president Obama and Mr Putin than any other world leader.
The greatest victory, however, is that the German doctrine of austerity, which has led to dramatic levels of unemployment and distress in European countries since the 2008 financial crisis, is now accepted by European elites. Mrs Merkel’s guiding principle has been that there is no alternative to austerity: unless countries live within their means, they cannot have their debts written off. The countries hardest hit by the banking crisis – Ireland, Greece, Spain and Portugal – have seen their young people migrate north to Germany or Britain in search of jobs. For these countries it is as if their youth has been stolen to pay the pensions of the pampered Germans while the older generation at home struggles to repay the debt to German banks.
After six years of pain, the technical fixes in Europe’s financial system have reduced the threat of the collapse of the euro, the common European currency. Ireland and Portugal have emerged from their EU rescue programmes, meaning that their governments should be able to fund themselves.
But these glimmers of hope are not the end of the story. With no end to austerity in sight, public opinion in the distressed parts of the eurozone is turning. Socialist and populist parties, which believe there is an alternative, are on the march.
In Spain, the insurgent anti-establishment Podemos (“We can”) has smashed the two-party system that came into existence with the end of the Franco dictatorship. In Portugal, the anti-austerity Socialists are leading the polls ahead of an election this year. In France, Marine Le Pen, leader of the anti-euro and anti-immigrant National Front, is outpolling the incumbent president. Greece’s radical left Syriza, which has promised to tear up the bailout agreements causing an unprecedented economic slump, may emerge as the biggest party in the snap election on January 25.
All of this suggests a coming trial of strength between Germany and Greece, with the other deeply indebted countries watching.
Even if Greece were to leave the euro, the common currency is stronger now than in 2008. But the German chancellor will need to persuade her country to show more flexibility on two issues. If a country cannot pay its debts – which is surely the case with Greece – it should not be forced to do so. Second, the euro can only survive if it has the support of the people and it seems to be losing some of that support on Europe’s southern fringes.
So Mrs Merkel enters 2015 as a successful politician of principle. If Europe is to thrive again, what is required from her in the coming year is something more taxing: less conviction and more imagination in setting out an ambitious plan that goes beyond the endless tunnel of austerity.
Alan Philps is a commentator on global affairs
On Twitter: @aphilps
