The Merkel era and the danger of centralization

Like Louis XIV, German Chancellor Angela Merkel often acted as if she were above the law. Unfortunately, she was not one of a kind. Europe’s current leaders are making similar moves, to the great detriment of the continent.

Merkel era end
The Angela Merkel era may be coming to an end, but Europe will be dealing with the consequences of the decisions for many years. © GIS – This cartoon is available for sale in our shop.

After 16 years, the Angela Merkel era is over. As German chancellor, she was able to leverage her country’s strong economy and make herself a sort of “Sun Queen” of Europe. Indeed, there are some uncanny similarities between the soon-to-be ex-chancellor and Louis XIV of France (1643-1715), the Sun King.

It is undeniable that Ms. Merkel’s modest lifestyle differs drastically from the lavish one led by the French king, but there are striking resemblances in the way they implemented their policies. Louis XIV believed he was above all law. The quip “L’etat c’est moi,” or “I am the state,” is attributed to him. For her part, the chancellor ignored legal limitations and the long-term interests of her republic, and instead made decisions based on political expediency or “feel-good” morality.

Political expediency

During the Greek debt crisis and under the mantra “If the euro fails, Europe fails,” Chancellor Merkel led the charge to repeatedly bail out Athens, violating Article 125 of the Maastricht Treaty (widely known as the “no bailout clause”). In the long term, these measures were also damaging the Greek population.

Her decision to phase out nuclear power after the Fukushima disaster hurt the German economy – and it was made against better judgment for reasons of political expediency. There were three major negative consequences for Germany: the country now suffers from Europe’s highest energy costs, it depends even more on fossil fuels for its power generation, and its energy security is weaker. The move therefore undermined all three pillars of a sound energy policy: affordability, security and ecological sustainability.

In a final, toxic “gift” to the people of her country and Europe, she agreed to a common eurozone budget.

Then there was the Willkommenskultur or “welcoming culture” she initiated with the virtually unlimited acceptance of migrants. The policy broke Schengen rules, while the unchecked influx destabilized Germany’s internal security. To her credit, we should acknowledge here that the subsequent agreement she made with Turkey to take in millions of migrants helped to ease the pressure.

In a final, toxic “gift” to the people of her country and Europe, she agreed to a common eurozone budget that will pool European Union debt and lead to a “transfer union” – in which wealth is redistributed from wealthy to poorer countries. The decision will cause long-term harm to Europe’s prosperity, and while it might not destroy the euro, it will certainly debase it. Moreover, poorer countries will be hurt in the long term, since we know that regions that receive wealth transfers remain weak or even decline. A good example is southern Italy since the country’s unification some 150 years ago.

Just as Louis XIV did not have to bear the consequences of his decisions – widespread bloodshed and killing of his descendants – Ms. Merkel has also left the fallout of her actions for others to resolve. And as Louis XIV was not the only one responsible for the situation he left behind, so too Chancellor Merkel is a typical representative of the political class of her time.

Trend toward centralization

Within this context, it is now worth asking what the situation on the continent looks like and how it moves forward from here.

The new government in Germany will be made up of a three-party coalition. After 16 years with the same leadership, change could be good – but will this change be the right one for the country? The coalition agreement is nearly 200 pages long and makes many promises. Little is said, however, about how all these initiatives will be financed. That makes sense, since actually fulfilling all these promises would be financially unsustainable. In fact, it seems to follow a certain logic that asks why Germany should be fiscally responsible if it will anyway become tangled up in a common eurozone budget that will certainly be fiscally careless.

European leaders and the media like to single out Hungary and Poland as “reckless” when it comes to reforms that some say threaten the independence of their judicial systems. Judicial independence is, without a doubt, crucial. That other countries may also infringe upon judicial independence does not excuse moves in that direction. The question, however, is whether the issue is one with which the EU should concern itself. The two countries are frequently criticized on other issues that are certainly not the bloc’s domain, such as sex education. They have also been pilloried for their migration policies. All this raises doubts about how seriously European officials take self-determination and makes plain the desire among them for an exaggerated level of centralization based on subjective morality.

If Europe wants to preserve its strength in variety, must monitor this accumulation of power carefully.

The Elysee Treaty of 1963 between France and West Germany, signed by French President Charles de Gaulle and German Chancellor Konrad Adenauer, formed the foundation of French-German collaboration on the European project. The resulting amicable, open and efficient cooperation between Paris and Bonn, and their respect for all partners, was a pillar of Europe’s success.

Recently, Rome and Paris decided to conclude a friendship treaty of their own. However, the agreement was signed by Italian Prime Minister Mario Draghi and French President Emmanuel Macron, two proponents of centralization and profligate spending – policies far removed from those of de Gaulle and Adenauer. Europe, if it wants to preserve its strength in variety, must monitor this accumulation of power carefully.

In the short term, it might appear that the tendency toward uncontrolled spending and centralization in Europe is not a problem. After all, the European Central Bank can provide all the money that these plans require. From this viewpoint, ECB President Christine Lagarde is now the continent’s most powerful person. Against all best practices, Ms. Lagarde, a politician, was installed as the custodian of the European currency. Like any typical politician, she believes in technocratic measures based on the primacy of politics.

Europe belongs to its various populations, not to technocrats.

Her policies align very consistently with those of her predecessor in the role, Mr. Draghi, who began the institution’s abandonment of its basic rules: independence from politics and guardianship of the currency’s stability. Instead, not only is the ECB deeply involved in both fiscal and monetary policy, it often takes the lead. In the spirit of L’Europe c’est nous (“we are Europe”), President Macron and Chancellor Merkel decided upon Ms. Lagarde’s nomination. By breaking statutes and buying sovereign debt, the ECB also seems to believe it is above the law and accountability.

The policies of power-hungry centralization have made Europe very fragile. Rarely has it held such a weak position in the global competition. The continent must realize that its strength is in its variety, which was already pooled together in the internal market. That was a fantastic achievement, based on decentralization and competition. Deep centralization will act as a poison to that accomplishment.

Though certain European institutions in Brussels are necessary, they (especially the European Commission and Parliament) and national “leaders” must know their limits. Europe belongs to its various populations, not to technocrats.

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