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Europe Daily Bulletin No. 9082
A LOOK BEHIND THE NEWS / A look behind the news, by ferdinando riccardi

Germany to reprise its role as pillar of European construction

Faithful to its nature, this column has not commented on the results of the elections in Germany, nor on the new Chancellor and the new government taking up their functions. This is a rule with me: not to take position on the internal policies of any of the Member States, just on the effects of these policies on Europe. Well, in the case of Germany today, first impressions are positive from two points of view: a) the coalition in power has taken very clear positions in favour of the relaunch of European construction, and all signs indicate that its actions will be highly effective in favour of this; b) there are several indications that the economic situation in Germany will be brought back into line fairly vigorously, which will open up favourable prospects, not just for Germany itself, but for Europe as a whole.

The political plank. For half a century, the alternating between parties in power has never had any effect on Germany's fundamental support for European construction. The odd (inevitable) hitch has never undermined the overall positive stance; German history has seen many great pro-European chancellors, Christian Democrats and Social Democrats alike, from Konrad Adenauer who, when he learned of the Schuman plan, told Jean Monnet: "If this plan works, my life will not have been in vain", to Helmut Schmidt, who was a staunch supporter of the single currency despite the opposition of national public opinion, the majority of industry and even his own country's Central Bank, because he didn't want the DM to be able to crush the other European currencies, thus leading to frustration and fear. It is true that after the flamboyant period of Helmut Kohl (with François Mitterrand in Paris and Jacques Delors in Brussels), economic difficulties poured a certain amount of cold water on all this enthusiasm. But almost never has the German political elite shown (the "almost" referring mainly to Ralf Dahrendorf) the Euroscepticism, discouragement or rebirth of nationalism experienced (and still being experienced) by various of the other Member States. It comes as no surprise, therefore, that a majority made up of the CDU/CSU and SPD parties is, in principle, in favour of European construction and its relaunch. The first stances and the first diplomatic initiatives by the new Chancellor Angela Merkel and her ministers all go in this direction.

Nor should it come as any surprise, against this backdrop, that Ms Merkel's lightning visits to the European institutions and to several capitals laid emphasis on: a) the objective of a social and political Europe (two adjectives which are not part of the vocabulary of all the Member States); b) support for the "treaty establishing a Constitution for Europe", a statement which is brave because it is not fashionable. The date set for relaunching the Constitution will be spring 2007, in the middle of the German Presidency of the Council, after the "reflection pause" underway; c) the confirmation of the Franco-German relationship, with no trace of exclusivity and no claims to be imposing its views on anyone else; d) Ms Merkel's particular, even personal, sensitivity towards the countries of Central and Eastern Europe; e) re-establishing full confidence in relations with the United States and trans-Atlantic links. Angela Merkel's first speech to the Bundestag confirmed, or even reinforced, these views.

The economic plank. Obviously, I have no information that isn't available to everybody, but I would like to point out that in particular, this information highlights: 1) the priority given to budgetary cleansing, an objective made credible by the reforms bravely brought in by the previous Chancellor and the coalition government's programme; 2) the already re-conquered place as the world's largest exporter; 3) an upturn in the order book for industry, which, in the month of February alone, swelled by 3.3% (whereas France's index is stationary and Italy's is on the slide, to mention but two large countries of the euro zone). For Germany, the production of goods must keep or re-gain first place in the European economy, whatever the attractions (and gain) of financial activity, and it is setting the example, having made sure that this priority has been recognised at European level. As for the increase in VAT, which has raised a number of reservations, we must not forget that the German rate is currently one of the lowest in Europe (16%, compared to 19.6% in France). Furthermore, the protection of nature and biodiversity (which goes hand-in-hand with the safeguarding of agricultural activity) will be just as much of a priority, in Berlin as in the majority of the Länder.

Of course, a lot of effort is still needed to bring unemployment down, balance the budget and give the consumers back their confidence, but Germany will succeed. It will do its best to ensure that the EU adopts its financial perspectives 2007-2013 this month, even though this is far from a done deal. (F.R.)

 

Contents

A LOOK BEHIND THE NEWS
THE DAY IN POLITICS
GENERAL NEWS
ECONOMIC INTERPENETRATION
WEEKLY SUPPLEMENT