By Fabrizio Tassinari, Special to CNN
Editor’s note: Fabrizio Tassinari is head of foreign policy at the Danish Institute for International Studies and senior non-resident fellow at the German Marshall Fund of the United States in Berlin. The views expressed are his own.
Once again, the world is populated by two German entities. You cannot draw them on a map this time, but their contours are still clear.
The first Germany is heading for general elections on September 22. It is a nation self-absorbed by the bread-and-butter issues that form the baseline of economic livelihood. Politics being local, some of the items on the agenda appear quirky to outsiders, such as the discussion of a “veggie day” in state canteens. From minimum wages to rising inequality, this Germany is preoccupied with similar things to any post-industrial democracy, plus a touch of trademark Teutonic rigor and angst.
The second Germany doesn’t need to go to the polls to be crowned Europe’s paramount power. This is the country with an aggressive commercial diplomacy that dictates policy on the profligate nations of Southern Europe. The Economist recently wrote about Berlin’s reluctant hegemony; others call it a “geo-economic power.” The key question for this other Germany is whether and how it will take up the mantle of leadership, in Europe and beyond.
By Global Public Square staff
Imagine if we had national elections this week. There would be no shortage of big debates over: the deficit, taxes, Obamacare, the size of government... you name the big topic, and our two parties will have a big disagreement.
Contrast that with another major country which actually is at the polls Sunday. The hot topics there are: whether or not to have one day of the week set aside for vegetarianism ... whether or not mothers should pick subsidized childcare over keeping their kids at home ... or get this one: whether or not foreign motorists should pay tolls. Seriously? Where in the world is this wondrous country with no real problems?
Well, it's one of the world's largest economies, and Europe’s largest: Germany.
Part of the reason why Germans are debating mundane issues is because, unlike in the rest of Europe or indeed much of the world, the overall picture is quite rosy.
By Heather Conley and Amb. John Kornblum, Special to CNN
Editor’s note: Heather A. Conley is senior fellow and director of the Europe Program at the Center for Strategic and International Affairs (CSIS) in Washington and a former Deputy Assistant Secretary of State. John Kornblum is a former U.S. Ambassador to Germany and CSIS Senior Advisor. The views expressed are their own.
As she enters her third and final election on September 22, German Chancellor Angela Merkel seems to be losing her political mojo in the campaigns’ final days, just as she did in 2005 and in 2009. Is it her refusal to emote? Has the absence of a European and foreign policy finally begun to worry even the most pacifist of Germans? Whatever the reason, Merkel is again stumbling a few days before the polls.
In 2005, Merkel’s pre-election musing about tax increases went down badly with voters A 21 percent lead in the polls melted to a small plurality. Merkel’s Christian Democratic Union (CDU) party was forced to build a grand coalition with her political nemesis, the center-left Social Democratic Party (SPD).
In 2009, German forces in Afghanistan called in a questionable yet lethal NATO air strike in the northern Afghanistan province of Kunduz just days before the vote. Merkel and her government were forced to admit publicly for the first time that German forces were in actual combat in Afghanistan and not peacekeeping operations. Again, the German people were not amused with this revelation and the election was much closer than analysts predicted.
"Fareed Zakaria GPS," Sundays at 10 a.m. and 1 p.m. ET on CNN
Last week, Fareed argued in his TIME column that for the next generation of growth, the U.S. “must focus on training and retraining workers, break the immigration deadlock, build out our infrastructure and invest in science and technology.” But he also argued that the United States needed reform, changes that will “make our entitlement programs affordable as we age.”
Here he speaks with Pulitzer Prize-winning economist Paul Krugman about how this applies to Europe, and whether stimulus and why stimulus and reform shouldn’t be seen as mutually exclusive.
The point I want to ask you about is the kind of reforms that open up markets. You know, Japan has 800 percent tariffs on rice. Italy is 73rd in the world in ease of doing business. The reason I'm asking is because…you've quoted…almost approvingly, something Naomi Klein argues, which is that whenever you have these crises, the problem is that these countries then adopt market friendly policies. They're called neo-liberal policies. And these are terrible for the economies.
Now, I'm thinking, the whole history of the last 35 years, as you know, is the countries that adopted these policies, by and large, grew pretty well – from Eastern Europe to India. You know, look around the world and becoming more hospitable to trade and markets has generally been a good thing.
So I'm actually, you know, still very much pro-globalization. And certainly, you look at some places – India actually being a case where you really do seem to have gotten a lot of mileage out of liberalization.
But that's starting from a very extreme regime. So when we're talking about Western European countries…I mean Ireland. Think about Ireland. I always think Ireland was the poster child for reform. Everybody talked about what a great job they’d done, how the structural changes were so great.
And now that Ireland finds itself in a financial crisis, people say, well, what you need to do is structural reform. Uh, wait, didn't they already do that? What happens if you've already reformed everything? What next?
By Nicholas Walton, Special to CNN
Editor's note: Nicholas Walton is the communications director of the European Council on Foreign Relations. The views expressed are his own.
The first notable dissenting voice came from a familiar figure, that sensible German woman with her reasonable manner and head full of common sense. “Let’s talk,” said Angela Merkel, in response to her British counterpart David Cameron’s speech on Europe, in which he pledged a referendum in the next parliament on whether Britain should leave the European Union.
The wider European response to Britain’s perceived wrecking tactics had ranged from scorn to anger; Merkel spoke instead of reaching a “fair compromise” with the perfidious Brits. Although this left plenty of future room for Merkel to be able to twist British arms towards her own Europhile viewpoint, it also spoke to a wider concern about the direction the European project might be taking: while some worry that the Brits are turning away from Europe, others worry that Europe is turning away from the world.
By Hans Kundnani, Special to CNN
Editor’s note: Hans Kundnani is editorial director at the European Council on Foreign Relations. The views expressed are his own.
The overwhelming feeling in Europe following Barack Obama’s re-election was a sense of relief. Although European approval of his administration’s foreign policy has dipped since he took office in 2009 – particularly over his increased use of drones and his perceived failure to put greater pressure on Israel – Europeans overwhelmingly preferred him to Mitt Romney. Indeed, according to one poll carried out in 12 European Union member states before the election, 75 percent said they would vote for Obama and only 8 percent for Romney if they could choose.
Still, Obama’s second-term foreign policy has the potential to divide Europe – and to divide Europe and America. Two developments in particular will shape Obama’s second-term foreign policy – deficit woes and a pivot towards the Asia-Pacific. Both will create tough choices for Europeans as they struggle to deal with the euro crisis.
By Sebastian Dullien, Special to CNN
Editor’s note: Sebastian Dullien is senior policy fellow at the European Council on Foreign Relations and professor for International Economics at HTW Berlin – University of Applied Science. The views expressed are his own.
Throughout the euro crisis, it has been remarkable how often the financial markets have gotten things wrong when analyzing policy decisions. After almost every major summit of the past couple of years the markets have reacted with immediate enthusiasm, sending share prices and bonds soaring and bringing spreads down. However, the relief never seemed to last long, and within a few days markets soberly realized that the steps announced after each EU summit were less far-reaching than originally thought, and insufficient to put an end to the euro crisis.
Last week, the financial markets were disappointed by the words of European Central Bank President Mario Draghi. Instead of at once beginning to print money and buying periphery bonds (as some market participants had hoped), or at least cutting the main refinancing rate further from its already low 0.75 percent, the ECB simply announced that its council “may consider undertaking further non-standard monetary policy measures according to what is required to repair monetary policy transmission” (ie bring down excessively high spreads between the yields of periphery bonds and those of Germany) and would work on modalities over the coming weeks. Mario Draghi even made it clear that the ECB would only buy periphery bonds if the country in question had agreed on a program with the EFSF/ESM bailout funds. Markets didn’t like the news, and reacted with rising spreads on periphery bonds and falling share prices. The euro also weakened.
Editor’s note: GPS speaks with historian Niall Ferguson about the rise of China, the likelihood of conflict in Asia and whether Europe is relevant. Watch GPS on Sunday at 10 a.m. and 1 p.m. ET for Ferguson's take on the euro crisis.
One of the biggest stories in international terms this century has clearly been the gradual shift in power from West to East, and especially the rise of China. Is China’s continued rise inevitable?
Not much in history is inevitable, but the shift from the West to the East looks like a pretty profound trend that it’s hard to imagine suddenly stopping. The IMF has China’s GDP exceeding that of the United States within four years, and the way growth rates are right now, something amazing would have to happen here in the U.S., and something very terrible would have to happen in China, for that not to take place.
So I think this is the biggest trend in economics, and perhaps geopolitics, in our lifetime. It goes back to the late 1970s and the reforms of Deng Xiaoping. I don’t think it’s going to stop for at least another 10 or 20 years, at which point demographics and other forces will start to slow the Chinese economy down. But this isn’t something that is just about to collapse, and those that think there’s a China implosion just around the corner are engaging in wishful non-thinking. It’s not going to crash. It may slow, but it’s not going to implode.
By Siobhan Dowling, GlobalPost
The German military is changing. What was once a male bastion has slowly been taking on a more female hue, with women accounting for almost one in 10 of those serving in the armed forces.
Now the military, or Bundeswehr, says it wants to see even more women in its ranks. “Currently 9 percent of all soldiers are women,” Chief of Staff Volker Wieker told Bild am Sonntag this month. “Our goal is a combined ratio of 15 percent.”
To achieve that, the army intends to make itself more attractive to female recruits, in particular by improving family-friendly structures. Yet problems persist. FULL POST
Editor’s note: Will Marshall is the president and founder of the Progressive Policy Institute. The views in this article are solely those of Will Marshall.
By Will Marshall, Special to CNN
Despite all the attention lavished on the Greek election, the outcome barely registered in Europe’s financial markets. Everyone knows the eurozone’s fate won’t be decided by the shimmering Aegean Sea, but in drizzly Berlin.
Germany is the key, but it’s torn by conflicting impulses. As the main engine of European economic integration, Germany is determined to preserve the 17-nation eurozone. But as Europe’s lender of last resort, it’s loath to bail out countries that took advantage of the euro to borrow extravagantly and live beyond their means.
To avoid such “moral hazard,” German Chancellor Angela Merkel sternly insists that Greece and other debt-ridden nations, notably Spain and Italy, commit to stringent fiscal discipline in return for the loans they need to service their enormous debts and pay their bills. Greek voters were incensed by these Teutonic demands for spending cuts and tax hikes, but they narrowly chose to stick with the euro rather than risking a “Grexit” from the eurozone.
What the “Club Med” countries really need, however, is not a morally bracing dose of austerity, but the kind of structural adjustments that Germany itself undertook — during its “Third Way” phase — to meet the challenges of globalization. The fundamental problem isn’t that these countries are profligate, though some have been. It’s that their economies are uncompetitive, a reality masked until now by a strong common currency.
Editor's note: Clyde Prestowitz writes on globalization for ForeignPolicy.com and is president of the Economic Strategy Institute. John Prout is the former Paris-based treasurer of Credit Commercial de France.
By Clyde Prestowitz and John Prout, Special to CNN
With Greece probably heading for an exit from the euro, the European and global economies may be facing disaster. However, there is still time for European leaders to reverse this destructive dynamic with one simple, outside-the-box solution: Instead of pushing Greece out of the eurozone, Germany should voluntarily withdraw and reissue its beloved deutsche mark.
The analysis of the problems of the euro and the European Union has long been upside down, focused on the debt and competitive weaknesses of the so-called peripheral countries (Greece, Italy, Spain, Portugal and Ireland) and especially of Greece. But issues of debt and competitiveness existed and were dealt with rather easily long before the euro arrived, through periodic devaluation of the currencies of the less-competitive countries against those of the more competitive countries, and especially against the deutsche mark.