Germany and European Integration: Keeping Together While Moving Forward

Barbara Lippert | 5 June 2017

German and EU Flags, Luigi Rosa, CC-BY-SA-2.0

Germany has a track record of initiating a multi-speed EU as a tool to foster European integration. It was a co-founder of the Schengen cooperation in 1985, which was initially even outside the treaties. It was a sponsor of Economic and Monetary Union (EMU) and the institutional deepening of the eurozone. It participates in the rare showcases of enhanced cooperation – divorce law, the unitary patent and property regimes for international couples, and it supports initiatives for structured cooperation on defence and security.

Since the Tindemans Report of 1975, Germany has belonged to pioneering countries that wanted to establish new or deepen existing policy fields with the help of multi-speed arrangements. For the sake of overcoming deadlock, Germany has accepted that there are more and more opt-outs for countries that hold back integration. But the price to be paid for increased differentiation was the continuous fraying of the acquis and of the EU’s decision-making system. Opt-outs for the UK in core policy fields and in particular the agreement of February 2016, intended to keep the UK in the EU, marked the peak of this approach. In the future, and for smaller members than the UK, this permissive stance might not be on offer any more.

From time to time, nostalgia for a core Europe, as proposed by Wolfgang Schäuble and Karl Lamers in 1994, comes up, as does the idea of a return to the European Community six of Rome. However, recasting the EU from 27 to a smaller and tighter group or a union that works as a flexible network is not the strategic goal of any Berlin government. On the contrary, holding the EU of 27 together is the overall objective.

Compared to France and President Macron, Germany is more cautious and aware of the risks of driving differentiation too far, even to the point of breaking up the EU. So Chancellor Angela Merkel exercises a balancing act. On a recent visit to Warsaw, and at the summit in Malta, she stressed inclusiveness and openness as important principles for the group of countries that do go ahead. She knows that core Europe as an exclusive club is the nightmare of all nightmares for the Visegrád countries. And, en même temps – at the same time – at the Palace of Versailles, the Chancellor demonstrated the will to club together with France, the key country for every avant-garde cooperation, Italy and Spain. From a Berlin perspective, the Versailles setting is not ideal because Poland is not currently on board due to the negative and disruptive policy of the PIS government.

So consolidation and rebuilding trust among the 27 comes first. Berlin would nonetheless support policy-driven differentiation in areas where concrete added-value can be expected. The agenda for differentiation could comprise, for instance, the harmonisation of taxes for enterprises or other fiscal harmonisation and the joint MPCC military headquarters, all of these below the threshold of treaty change. And it may be that external threats – from Putin and Brexit to Trump and the instability in the neighbourhood – could well ignite the necessary political momentum that the EU lacked during the last decade of ‘polycrisis’.

The next critical juncture could be an Intergovernmental Conference to change the Lisbon Treaty in core areas such as the Economic and Monetary Union with proposals for a eurozone fiscal capacity and more competences for a eurozone finance minister, a pooling of resources and joint structures for a defence union and for a security union to foster police and intelligence cooperation as well as in judicial affairs. Such deepening of integration will certainly need to progress gradually and at different speeds, but preferably in one and the same direction for all member states as stated in the Rome Declaration of March 2017.

However, a radical alternative would be a new settlement for a proper two-tier EU with strong demarcations between the two clubs. There seems to be, however, little political appetite across the 27 and certainly not in Berlin for a scenario of ‘nothing but the single market’ that the European Commission outlined in its White Paper. Other à la carte approaches do not stand the reality test either, considering member states’ diversity of preferences and interests, the interdependency between EU policies, and the limits set by the single institutional framework. Up to now institutional barriers to differentiation, namely with regard to the supranational Commission, the European Parliament and the European Court of Justice, have also made impossible more radical options for differentiation.

All in all, Germany acknowledges that differentiated integration is a reality of today’s EU and is sometimes the pragmatic answer to concrete problems. Recent declarations from Berlin on more differentiation and flexibility within the EU are an attempt to add momentum to a debate over the future of a more legitimate and effective EU that ‘must take its fate into its own hands again‘, as Merkel said on 27 May. During the term of the 19th Bundestag and the next German government, political reform and EU treaty change will be back on the agenda.

Barbara LippertBarbara Lippert

Stiftung Wissenschaft und Politik

Dr Barbara Lippert is Director of Research at the Stiftung Wissenschaft und Politik (SWP). Her research focuses on EU enlargement policy and Germany’s approach to European affairs. She is Advisory Board Member of the Scottish Centre on European Relations.