Analysis: Germany takes on the EU's rotating six-month presidency
Yesterday, Angela Merkel and Emmanuel Macron met in Meseberg, north of Berlin, for their first face-to-face encounter in months. The German Chancellor proclaimed that when France and Germany agree, the EU doesn’t always agree, but when France and Germany don’t agree, there cannot be agreement. In many ways, that goes without saying but it is a reflection of where power lies within the European Union.
For historical reasons, Germany has publicly shied away from overtly wielding power. But, it clearly does. Ursula von der Leyen heads up the Commission, German diplomats hold sway behind the scenes. Its population size means it has the largest representation inside the European Parliament. Tomorrow, it ascends to take over the rotating presidency.
Right now the European Union needs leadership and Angela Merkel, who has been in charge of the German powerhouse for the past 15 years, is not shying away from that role. She has continuously argued, throughout this crisis, that this is the most crucial moment in the union’s history. An economic crisis not seen for nearly a hundred years, a health emergency that has not gone away. If it ends badly, not only would it tarnish her reputation, but some think it would lead the EU down a path from which it might not recover.
Emmanuel Macron branded it the moment of truth, urging leaders to reach a deal on the recovery fund when the group finally meets in person next month. Objections still remain, particularly from the so-called frugal four, over the size and scale of the fund, its mixture of loans and grants and about who gets how much.
In recent days, objections have been expressed (by countries like Denmark) over the amount of money being received by countries like Poland, where I’m writing this newsletter from. It is due to receive a net contribution of €16 billion, just behind Spain. Italy, for example, is due to receive €22 billion, The Guardian reports. The Danish prime minister wants to know why, since Poland has reported fewer infections and deaths from the virus and its economy has been less hard hit.
Just one facet of a complex web, which will mean tough negotiations in the weeks to come. And that is why Merkel’s role will prove so crucial. Germany is squeezed between a hesitant north and a desperate south. This crisis has effectively seen Europe’s largest economy switch sides, aligning itself with France, Spain and Italy to agree to a historic harmonisation of EU debt. Germany has woken up to the fact that it needs the European Union, too.
Germany has gained so much from its membership, particularly in the 20 years since the introduction of the euro. Yes, it might be the Union's largest net contributor, but its economy has made great gains without a massive appreciation in the euro, allowing its manufacturing base to remain competitive, while also providing access to the world's wealthiest single market. In Berlin, the mood has shifted to preserving the model, even if it means compromising on previous red lines to protect its own self-interest.
Germany’s presidency of the Council of the European Union will possibly be the toughest faced by any member state to date. It is not just the €750 billion recovery fund needing to be signed off, but also those pesky and tricky Brexit negotiations on future trade and the push to make Europe a greener continent. But, maybe the presidency has come at the best possible time for the European Union? Germany and Ms Merkel have the political and economic might to steer the ship through these choppy waters. It won’t be easy, but you would have to conclude that, if anyone can do it, it would be Europe‘s most successful national leader.