Dr. Jakub W. KOREJBA
Germany has been the engine of European integration since its own unification. But German economic miracle that sponsored both processes was based on the geopolitical order that no longer exists.
Since the war in Ukraine begun and especially since it went badly wrong for Moscow, the Eastern-European order based on the division of zones of influence between Berlin and Moscow started to disintegrate opening both opportunities (to fill the geopolitical niche left empty after Russia’s depart) and risks (of a long lasting and potentially destructive regional chaos). This situation forces German decision-makers not only to adapt national strategy (in domains such as military expenditure or energy importation) to new external conditions but to rethink the overall strategy towards Eastern Europe. Especially, that after loosing its Russian partner, Berlin may have difficulties to internally generate the strength that was for a long time the base for its influence abroad.
The strength of German economy was long time seen as a guarantee of European prosperity and presented (at least by German politicians) as an example to be learned and repeated by other nations. Biggest, strongest, most innovative and crisis-resistant German economy was presented as an indispensable core element of European model of life and the “locomotive of integration“ stipulating that without Berlin the process of continental economic growth and political rapprochement wouldn’t be possible. The present condition as well as a vision of Europe’s future were logically put into direct dependency relation with the condition of German economy.
The discourse of infallibility and patronizing demeanour à la Wolfgang Schäuble were often present in Germany’s commentaries on problems such as economic growth, budget deficit, debt crises and mismanagement of European funds that were permanently present in other European state’s agenda but not in the German one. Unpleasant it may be to hear that, for years it was difficult to deny because this contrast between Germany and other countries was justified by objective economic indicators.
This situation lasted for many years and could potentially last for long time more, but one February morning destroyed the existing model leaving whole Europe with the fact of a a sudden and ultimate fiasco of German strategy: for the unknown reason (which will most probably be an object of investigation for the whole generation of political analysts) Berlin’s perennial friend and reliable partner Vladimir Putin decided to overturn the whole construction meticulously assembled by subsequent chancellors and triumphally accomplished by Angela Merkel. The leadership that was reached by “soft“ economic pression and seemed to be an indisputable basis of German influence, a cornerstone of a German-led Europe, the ‘only possible’ and the ‘best’ Europe we may dream of in the 21st Century was put into question.
With German economy showing first signs of losing its formidable condition and even facing a possible recession, a deep and durable one according to available economic forecasts, this model needs new sources of growth. At the present stage, as the process of isolating Russia from Europe is not terminated, it is not possible to forecast if German economic model will be able to maintain itself, and surely not in the previous form. What we see may possibly be a definitive end of the German economic miracle and this forces Berlin to rethink its overall strategy towards Europe in general and the Eastern Europe in particular.
Until now, Russian aggression in Ukraine has collapsed only one pillar of German economic strength (that is energy prices) and this was already enough to provoke a major change of prospects of German economy. That is why it makes sense to briefly examine other elements German economic power is based on and try to assess their crisis resistance. This is a task of great importance: as German project for Europe is based on economy, the state of German economy will determine Berlin’s ability to lead in Europe politically.
German economic force is based less on innovations and more on traditionally organized and managed great industrial concerns working in a close symbiosis with the government: it doesn’t invent and implement future-oriented, ground-breaking technologies, but massively manufacture trusty and time-proven good-quality cars, chemicals, household appliances and all other kinds of machines, which Germany exports all over the world. It is based on strong working culture and high productivity (but not the best, being ranked behind Scandinavian countries, the Netherlands or even France) but the secret lies elsewhere: it consists in a very good ratio between the quality and the price which allows German producers to attain purely fantastic level of revenue margin, to reach an almost impossible value added and keep its fruits at home. In another words: Germans are good and cheap at the same time.
But what keeps them competitive, especially given the statist, social-oriented, burdened by the almighty trade-unions and not very innovative nature of German economic structure?
First of all – the common European currency which closes in one monetary area the economies as different as those of the North and the South of Europe, making German industry the most competitive and thus automatically sweeping Italian or Greek products from the shelves of supermarkets all over the Common Market.
Secondly – the major and long-term savings Berlin (and previously Bonn) is making on military expenditure with Germany being a country almost entirely outsourced in the sphere of national defence. To avoid going into details – one may try to imagine (or simply count the numbers) how much Türkiye or Poland could annually invest into its industry and infrastructure if they were not obliged to maintain and enlarge their military budgets. Additionally, Germany receives mass hard currency influx being the fourth-largest arms seller, as it may export virtually all of its military production.
Thirdly – the influence of the process of EU-led de-industrialization of Europe (but not Germany itself) which was observed in at least last 30 years. As almost all other European countries were switching to service-oriented economy, Berlin kept ignoring European directives as well as its own recommendations and stayed a hardly industrialized economy, just as all other major powers (the USA, China, Russia, India) did, making the rest of Europe critically dependant on German goods.
But the very basis of German competitiveness lies in an access to cheap raw materials – Chinese components and Russian natural resources of which oil and gas sold by Moscow at politically-motivated dumping prices form a foundation of German economic miracle. A foundation that has just collapsed, entirely changing the basic conditions of German economic model.
The speedy pace and totality of the collapse of the German energy strategy based on its privileged ties with Russia is the first, but surely not the last shock, Berlin will have to absorb in short time with all other abovementioned fundamental factors of German economic prosperity to be most probably very soon put into question. This puts on the table the need fofr evaluation leading to the very fundamental question of how German economy and thus German strategy could be founded on such a week basics?
All economic and political arguments enumerated above are definitely accurate symptoms of mismanaged strategy, but it seems, that the core problem has a conceptual, not to say philosophical nature and is not-accidentally connected to how Germany sees and treats two other European countries, the ones that both do not fit into German vision of Europe, if they want (and they evidentially do) to keep their position and maintain their national interests: Poland and Türkiye.
Berlin has based its vision of Europe on the very traditional, classical geopolitical and geoeconomic concepts formulated for the Imperial Germany by Ratzel and Haushofer and, seemingly, never given up by the strategic planners in Berlin. According to them, Europe’s optimal construction should be based on several circles centred on Berlin with a net division between the capital, the core and the periphery, itself divided into a few components. In such a construction, there is few chance for any real discussion about the balance of national interests and an equal division of profits between countries belonging to the ‘core’ and those from the ‘periphery’.
The ultimate failure of German strategy was founded when Berlin decided to deny Poland and Türkiye the position of real partners and treat them as respectively, the inner and the outer periphery of Europe. The sabotage of the integration process and the final denial of full membership of Türkiye in the EU was the turning point in the continental history. Berlin marginalized the partner, which was on one hand in a position to strengthen Europe and give the Union the new dynamics but on the other, required respect for its interests and an equal status, something that Germany was not only unready to provide but regarded as a direct threat to its domination. If the other partner, Poland was accepted as an EU member, it is only due to the very obvious geopolitical fact, that Polish border is located at some 90 kilometres from the centre of Berlin, and the security risk of using the Turkish variant towards Poland was simply too adventurous for Germany. However, this step was compensated by the (unequal) terms on which Poland was incorporated into the EU and the practice of European Commission’s hard policy towards Warsaw.
Both Türkiye and Poland were seen as a periphery of the German core and artificially kept in the ‘middle-income trap’ with Berlin using their relative underdevelopment to profit from their resources (namely the demographic potential) and make their markets open for German production. And, of course, periodically blaming Warsaw for being ‘too pro-American’ and Ankara for being ‘too pro-Russian’. But how could they not be, if this was the only accessible instrument to balance the evident and all more overt continental hegemon growing in front of their eyes?
Now, as German strategy already started to collapse, it is time to reopen the discussion about the place and role Poland and Türkiye may play in Europe in general and in German strategy particularly. The German project may no more be treated as an unpleasant but inevitable compromise, ‘the best of bad options’, because it is not only counterproductive for the rest of Europe, but started to hamper Germany itself.
Hopefully, after a year of war in Ukraine and all consequences it brought, Berlin needs no more catastrophes to happen to understand that the Eastern Flank of Europe will never be safe and prosperous without Poland as well as the Southern Flank without Türkiye. The time of unilateral decisions made by Berlin and imposed to its supposedly younger partners definitively passed, the previous German strategy proved that it was unable to organise Europe efficiently, to guarantee the framework for safety and development and thus, Berlin should seriously think about a new one based on a polycentric Europe of equal partners.
All the more, because the current crisis in Ukraine, just as the previous and not really terminated Refugee Crisis show, that it is impossible to build an imperial European Union in which Poland and Türkiye play the role of German satellites and humbly implement directives sent from Berlin. The future of Europe will be based on a horizontal coordination between partners and not on their vertical coordination with Germany. The ‘new’ will replace the ‘old’ anyway, because no future may be built on a failed strategy: with Germany, despite it or, if there is no other option left, without it.
