How will Merkel respond to the ‘Trump doctrine’?

British Prime Minister Theresa May was the first foreign leader to meet Donald Trump at the White House, but the one who counts in Europe is German Chancellor Angela Merkel. Her response to Trump’s apparent readiness to overturn seven decades of American support for NATO and the European Union will be crucial in determining the future of Germany and the EU.

The provocations of what may come to be called the “Trump doctrine” are causing angst in Berlin. At their joint press conference on Jan. 27, May claimed to have secured the president’s “100 percent” backing for NATO, the western alliance underpinned by American military might since 1949.

But Trump’s description of NATO as “obsolete” just days before he took office continues to reverberate, as does the message from U.S. Defense Secretary James Mattis, who on Feb. 15 said that America could “moderate its commitment” to the alliance if other members continued to spend too little on their military. The position is especially worrying since Trump is tolerating Russian President Vladimir Putin despite Russia’s annexation of Crimea and support of separatists in eastern Ukraine.

Trump gives short shrift to the EU, depicting it shortly before his inauguration as “a vehicle for Germany”, which according to his chief trade adviser is exploiting the United States through an undervalued euro. By contrast Trump effuses over Brexit, saying at the press conference with May that “a free and independent Britain is a blessing to the world”. Trump’s praise of Brexit and prediction that other countries will leave the EU breaks with American support for European integration stretching back to the Marshall Plan.

German Chancellor Angela Merkel leaves after her testimony at a parliamentary inquiry in Berlin investigating the NSA's activities in Germany, February 16, 2017. REUTERS/Axel Schmidt - RTSYZAJ

Taken at face value, the Trump doctrine undermines the key strategy of post-war Germany, which from Konrad Adenauer to Angela Merkel has sought to regain international respect and influence by binding the country to a common European destiny. Integration has been primarily economic and monetary through institutions such as the European Commission and the European Central Bank rather than through a shared European military, which remains covered by NATO. Germany has thrived both politically and economically by pursuing this approach, not least through achieving German unification in 1990.

If Germany can no longer rely on American support, Merkel will have to reshape that post-war strategy. Her most radical response would be to push for the creation of a European military force, while also getting the EU’s troubled core, the 19-country euro area, to work better.

The creation of such a military force with its own permanent headquarters is potentially easier because the UK, which has always opposed such a move, has written itself out of the script. Yet it would be hazardous for Merkel. The decision to pursue economic integration at the Treaty of Rome, whose 60th anniversary will be celebrated at the end of March, followed the collapse of an attempt in the early 1950s to create a “European Defense Community”. Such a project risks conjuring up old specters of German armed might, scaring Germans as much as other Europeans.

Sorting out the euro area will be just as tricky for the chancellor. At the heart of the problem is a flawed design that has proved too strict for uncompetitive and debt-ridden countries in southern Europe, in particular Italy – the monetary union’s third-biggest economy. The euro is weak not because of Germany but because the ECB is keeping monetary policy ultra-loose in order to resuscitate the sick in the single-currency ward.

Since the costs of a breakup of the monetary union would be huge, the way to make the euro zone work better is through a common fiscal policy based on a shared budget, which would in turn require much deeper political integration. But there is little appetite for this, in Germany or other crucial countries such as the Netherlands, for fear that northern taxpayers will end up paying the bill for struggling southern economies.
Selling the case at home for deeper economic ties will be particularly tricky for Merkel as she prepares for an election in September. The chancellor, who is seeking her fourth term in office, faces an unexpectedly strong challenge from Martin Schulz, the candidate of the Social Democratic Party and former president of the European Parliament. Merkel has less room for maneuver than before due to the rise of Alternative for Germany, a right-wing party that has capitalized on public frustration with the chancellor’s migration policy that let in so many asylum-seekers in 2015. And Germans are feeling less-than-enthusiastic about the ECB, the centerpiece of European integration. A nation of savers does not take kindly to earning negligible interest on their deposit accounts when inflation, their historic nemesis, is back, surging from 0.7 percent in November to 1.9 percent in January.

Merkel is likely to react cautiously to the Trump doctrine in order to see if the president’s actions are less provocative than his words. If his dissatisfaction with NATO is primarily that Europe does not pull its weight, then that call for burden-sharing can be met through higher defense spending by Germany and the rest of the EU. The sour mood of voters in Europe rules out any immediate push forward on deeper fiscal and political integration.

Yet the chancellor’s predicament in responding to the challenge posed by Trump reflects an unwelcome reality. The German question once posed the difficulty of containing German power within Europe. Now as much as anything, it means the difficulty of getting Germany to underwrite Europe.

Paul Wallace is a London-based writer. A former European economics editor of The Economist, he is author of The Euro Experiment, published by Cambridge University Press.

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