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Nov 22, 2016 | 01:56 GMT

6 mins read

Europe Needs More Than Merkel

The Limits of German Influence
(SEAN GALLUP/Getty Images)
It can be difficult to separate the important from unimportant on any given day. Reflections mean to do exactly that — by thinking about what happened today, we can consider what might happen tomorrow.

On Sunday, Angela Merkel announced that she will run for a fourth term as German chancellor. During a meeting of her Christian Democratic Union party, Merkel promised to campaign on a centrist platform focused on "democracy, freedom, and respect for human and individual rights." After the surprising results of the Brexit referendum and the U.S. presidential election, many in Germany and around the world see Merkel as a source of stability and moderation during times of uncertainty and excess. But while the German leader will probably try exploit this image in the run-up to the national elections in late 2017, the challenges that the European Union will face in the coming months could be too big for a single person, or even a single country, to handle alone.

In 2017, the European Union will confront political, financial and security threats. France will hold presidential elections in April and May. A victory by the National Front, a party that wants France to leave the European Union and the eurozone, could lead to the dismantling of the currency area and even to the dissolution of the continental bloc. In addition, if constitutional reforms in Italy fail in a Dec. 4 referendum, early elections could be held there in 2017. That could open the door to a win by the Five Star Movement, a party that also wants to leave the eurozone.

Should the National Front or the Five Star Movement come to power and honor their promise of putting their countries' eurozone membership to a referendum, the first reaction by Germany would be to seek accommodation with them to avoid an escalation of the crisis. But the government in Berlin would also start making contingency plans for the demise of the currency area. Events early in 2017 could therefore force Merkel to shift her electoral strategy from a campaign focused on the virtues of EU integration to one centered on emergency plans to protect Germany's position in a disintegrating European Union.

Germany will also have to deal with uncertainty in Central and Eastern Europe. President-elect Donald Trump's victory in the United States has raised questions about the strength of the U.S. commitment to security in the region and about a potential rapprochement between the United States and Russia. While countries such as Italy and Austria will probably push for an improvement of EU ties with Moscow, those closer to the Russian border, such as Poland and Estonia, will look to Germany for reassurances against potential Russian aggression while developing their own regional security ties.

Germany will react to these developments by pushing to keep sanctions against Moscow in place for a few more months to buy time to assess the new global reality. This will prove difficult, however, especially if Washington eventually decides to lift its own sanctions on Russia. In addition, some of the most popular presidential candidates in France have spoken out against the sanctions, a position that could generate friction between the European Union's top political forces.

Berlin will also continue to seek greater European cooperation in other areas of security and defense. Progress on those issues, however, will be modest at best because the often dissimilar national interests in the European Union will limit the room for agreement on foreign policy and defense issues. More important, Germany is far from being able to supplant the United States as the main military protector of the European Union's eastern flank.

Though Germany is Europe's largest economic and political actor, it faces strong constraints. For one, Germany's export-driven economy depends on access to foreign markets, so the current political wave of free trade skepticism in the United States and Europe could damage the German economy. Additionally, the European Union brings together 28 countries with very different national priorities. Most countries are willing to challenge Germany's leadership and ignore EU pressure when their domestic interests are at stake. The decision by most EU governments to ignore a German-backed plan to distribute asylum seekers among member states is a reminder of the limits of Berlin's influence. On the other hand, Germany's tolerance of the failure of eurozone members to meet EU deficit and debt targets is both an expression of Berlin's political flexibility and an acknowledgement of its limitations when it comes to enforcing the bloc's rules.

Germany's ability to lead the European Union is also governed by the frequent contradictions between its national priorities and the challenges created by the process of European integration. The eurozone remains a currency union without a fiscal union, which means that its member countries share a currency while applying different fiscal policies. Plans to create a European banking union have only been partially implemented, while German resistance thwarted the idea of issuing debt jointly backed by eurozone countries. A permanent rescue fund for the eurozone, which could finance bailouts for small economies, is not strong enough to handle a country such as Italy should it face default. At the heart of all these incomplete projects lies Germany's reluctance to accept measures that involve a greater degree of risk sharing with Southern Europe.

History also guides Germany's actions. Berlin doesn't want to be seen as acting alone, so it constantly seeks coalitions to help it lead. Europe's political fragmentation, however, is making it increasingly difficult for Germany to find enough consensus within the bloc. This situation could worsen during 2017 if Euroskeptic forces become more influential. In some cases, the messages of those parties also carry a dose of anti-German rhetoric, blaming the government in Berlin for the austerity measures that were introduced in response to the economic crisis.

In addition to having to operate within those limits, the next German government could also have to contend with domestic political pressure. Polls show that popular support for Germany's largest parties is decreasing, with some votes migrating to rising forces both on the right and the left. This could lead to a more fragmented parliament and to a coalition government that controls a smaller majority of seats, which could limit the new government's ability to approve controversial policies. In recent years, Merkel was able to overcome opposition within her own ranks to such measures as Greece's third bailout program because of the large number of seats that her coalition of center-right and center-left forces controlled. A similar majority cannot be taken for granted after the next election.

Since the start of the economic crisis almost a decade ago, Germany's strong economy and stable political system made it the European Union's leading force. In times of uncertainty, it is only natural for political and economic actors in Europe and abroad to look at Germany and expect it to act resolutely. The German government will certainly react to events in Europe next year and will try to keep the bloc together. But it will also face limitations of its own. Europe's internal contradictions and external threats are creating challenges for the European Union that could go well beyond Berlin's ability to influence events in the bloc.

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