Germany's location at the center of the north European plain ensures that it is both rich and insecure. The lack of natural borders to the east and the west maintain a situation of permanent neighborly distrust. Its export-driven economy dominates some of Europe's most navigable rivers, arteries that feed the world's fourth largest industrial complex. Germany's unification in 1871 changed the way Europe worked by unifying hundreds of previously fragmented political entities into an economic and military superpower. The European response to Germany's unification was a series of wars that led to the country once more becoming divided and occupied by foreigners.
Europe's reaction to Germany's second unification almost 120 years later was quite different: Instead of death and destruction, the Europeans decided to try integration and peace. The fall of the Berlin Wall in 1989 led to the creation of the European Union and the eurozone, both of which were born out of hope and fear. West Germany had been a peaceful NATO member since the mid-1950s, but concerns about a strong and unified Germany were as palpable in 1990 as they were in 1870. France and the United Kingdom opposed German unification, with British Prime Minister Margaret Thatcher famously saying in 1989, "We defeated the Germans twice! And now they're back!" France saw the creation of the euro as a way to integrate the Franco-German economies in such a way that cooperation would be inevitable. If Germany could not be stopped, then at least it would have to be contained, with its power diluted into wider European structures and institutions.
The Burden of Leadership
The irony behind the attempts to create a more European Germany is that, 25 years later, the continent is debating whether Berlin is trying to build a more German Europe. The European economic crisis deepened the differences between Germany and its neighbors, France in particular. Paris' dream of a co-leadership of Europe was substantially harmed by the stagnating French economy. And so Germany is once again the main economic and political power in Europe. But Berlin doesn't want to lead Europe — or at least it doesn't want to do it in such a way that would worry its neighbors. Germany is often described as a "reluctant hegemon," a powerful country that could lead Europe to a brighter future but simply chooses not to. Berlin faces opposition when it leads and is criticized when it doesn't.
Germany's reluctance to fully embrace its role in Europe has historic roots. The memories of Nazism are still too fresh, and many Germans simply do not want their country to lead Europe. They would rather have a prosperous yet politically shy country — something similar to Austria or Switzerland. The Germans feel proud and afraid of what they have achieved since 1989. They find themselves at the center of Europe once again and dread what could happen next. This does not mean that Germany lacks an aggressive foreign policy, but it is mostly based on the protection of its domestic welfare — in other words, making sure that protecting its export markets and keeping the European Union alive does not result in Germany footing the bill.
Germany is trapped in a contradiction. On the one hand, it relies on its export market to maintain social cohesion at home. Almost half of Germany's exports go to its neighbors, explaining why Berlin benefitted substantially from the creation of the eurozone — a system that traps some of Germany's main customers within the same currency union. But on the other hand, Germany also needs to protect its national welfare, which explains why Berlin used the economic crisis to pressure eurozone members to apply deep structural reforms. The problem is that, in many cases, this pressure led to recession and unemployment, which weakened support for Germany as Europe's potential leader.
At the heart of the European Union there is a contradiction between a country that needs to export to survive and countries that need to protect their economies to prosper. Germany may be a reluctant hegemon, but it also tries to lead countries that are unwilling or unable to follow. One of the many consequences of the European crisis is that countries have decided to selectively ignore or even violate the rules of the eurozone to pursue their own national strategies. The European Union is basically a contract, and contracts can be broken if they no longer work for the parties involved. The European Union was built on the promise of peace and prosperity. It still delivers on the former, but there are serious questions about the latter.
Interestingly, the economic crisis also affected the way some Germans see the European Union, and the country is beginning to manifest early signs of Euroskepticism. The slow but steady rise in conservative forces that want to stop financial assistance to countries in distress — and even leave the euro — is an early signal of this trend. From the beginning of the crisis, the German government opted to both criticize countries in southern Europe in addition to providing assistance to them. This strategy proved successful from an electoral point of view but did not fundamentally change the way Europe works. The same problems simply keep coming back.
Germany's neighbors are approaching the point where they will be forced to make tough choices. They could accept to live under the supervision of a country that is bigger, more productive and more assertive than the rest, or they could return to some previous form of cooperation that does not necessarily involve giving up national sovereignty. Because of the recent rise in nationalism in Europe, the latter seems increasingly more likely. This does not mean that Europe will experience war any time soon, but it does show that the dreams of European federalists, dreams of a United States of Europe, will probably not materialize.