At recent summit meetings of the G8, NATO, and the EU, major powers and smaller partners scrutinized German foreign policy under a magnifying glass. However, they apparently reached opposing conclusions about the nature of Germany’s new role in international relations.

Europeans − particularly members of the euro zone − see Germany as acting like a (benign?) hegemon against whom they must rally in order to defend domestic politics. The introduction of the euro significantly increased mutual dependence of the currency union member states and removed both exchange rates and monetary policy from the economic toolbox of national governments. However, the euro crisis demonstrated that interdependence is largely asymmetric, as the exit costs for the economically strong members such as Germany are considerably lower than the exit costs for weaker economies such as Greece, Italy, Spain, or Ireland.[1] Following the strong leadership of Chancellor Angela Merkel, who had been supported by then French President Nicolas Sarkozy, the EU in cooperation with the IMF put together rescue packages for souring Greece and Portugal that made payments conditional on significant budget cuts and spending limits. Such austerity policies have been designed to restore the confidence of financial markets, reduce interest rates for the huge volume of debts, and eventually put the economy on the solid footing of growth and competitiveness. Yet, people in these weaker countries suffer under the consequences of austerity programs and consider them ill-conceived to address their problems. Most importantly, they believe that Germany forced them to undergo drastic structural reforms that follow Germany’s own model of the agenda 2010 and so-called Hartz IV reform programs to restore international competitiveness. They resent the notion that international institutions such as the EU and the IMF − under strong German guidance − can impose unpopular policies. In order to symbolize their protest against such undemocratic coercion from outside, they associate Angela Merkel with Nazi emblems. They further claim that mostly Germany harvested the economic gains generated by the common currency because its export-oriented economy exploited the markets of the euro zone area, thus generating huge surpluses of trade and current accounts. And because the euro is weaker than a German mark would have been, Germany benefited from huge export increases in non-European countries, too. In essence, Europeans developed a narrative in which Germany exploited and further weakened them for national rather than European purposes. They claim that Germany uses the asymmetric euro arrangements and rules governing the rescue packages as “extractive institutions”[2] for its own benefit. Consequently, it would only be fair that the stronger euro countries show some solidarity by bailing out the weaker ones. Germany should give up manipulating the European rules for its selfish hegemonic purposes.

In NATO, Germany’s allies could not be farther away from a narrative of German hegemony. On international security and alliance issues, allies paint a picture of Germany acting as a free rider rather than a responsible leader. It punched below rather than above its weight when it cut defense spending, abstained in the UN from supporting the liberation of Libya, and has been unwilling to contribute its fair share to the new NATO initiatives such as “smart defense.” The smaller and economically weaker European members cannot be expected to maintain or even increase their share of NATO’s collective security burden when an economically strong Germany sheds its fair share of the collective burden. NATO allies demand that Germany needs to overcome its reluctance toward common military operations and play a leading role in future missions. Moreover, if defense spending cuts are unavoidable, Germany must contribute significantly to closer cooperation in research, development, and procurement, as well as accept a sound division of labor among states regarding specialized capabilities such as surveillance, strategic airlift, or air refueling. National capabilities must be pooled in order to be effective, and national defense industry bases should give way to common programs.

The most recent example of Germany’s uncooperative behavior is NATO’s Alliance Ground Surveillance (AGS) system. Based on a number of unmanned drones named “Global Hawk,” the system will give military commanders real time reconnaissance during common operations. Like NATO’s Airborne Early Warning & Control (NAEW&C) systems based on AWACS, AGS will be commonly owned and operated. Thirteen allies including Germany have been expected to acquire the system, which is to be introduced between 2015 and 2017.[3] However, the Bundestag recently refused to authorize the German share of the system’s procurement budget − €483 million – dealing a blow to NATO General Secretary Anders F. Rasmussen’s smart defense initiative. Smaller allies cannot be expected to support a NATO project and compensate for Germany’s whole commitment in the common budget. By refusing to contribute its fair share to the alliance’ common security burden, Germany considerably weakens the alliance.

On the surface the two narratives of German hegemony in Europe and its free riding in transatlantic relations cannot be reconciled. Germany cannot do too much and too little simultaneously. However, the common denominator of both criticisms is that German foreign policy follows its parochial national interest rather than pursuing shared values. Gunther Hellmann has charged that Germany follows a “clever” (schlaue) foreign policy strategy when in fact it should pursue an “owlish” (kluge) one.[4] If this continues, Germany will unavoidably fall into the trap of the “tragedy of great powers politics” (John Mearsheimer).[5] “Precisely because the system has been Germany’s destiny,” Josef Joffe wrote in 1999, “all German statesmen from Bismarck on have tried to Germanize it: to structure it in ways that favor German purposes while constraining the option of others.” Such clever foreign policy led the country and the continent into catastrophe. Instead, Berlin should “inject German-made public goods into the system than to try to squeeze benefits out of it.”[6] Owlish foreign policy is predictable, dependable, and follows common rather than national interests. These features need to be restored. Germany needs to convince allies and also weaker partners that it pursues common objectives and will contribute its share to the collective burden.

Christian Tuschhoff is a Senior Non-Resident Fellow of AICGS and an adjunct professor of political science at the Free University Berlin.

[1] Interestingly, Alexis Tsipras of the Greek radical left party Syriza argued that asymmetric interdependence no longer works in Germany’s favor because the exit costs for Greece will be as high as the costs for maintaining the membership. Ames Angelos and Alkman Granitsas, “Defiant Message from Greece,” Wall Street Journal, 18 May 2012.

[2] Daron Acemoglu and James A. Robinson, Why Nations Fail. The Origins of Power, Prosperity, and Poverty (London, UK: Profile Books, 2012).

[3] International Institute for Strategic Studies, “Nato Leaders to Consider Smart Defence in Chicago,” Strategic Comments 18/19 (2012).

[4] Gunther Hellmann, “Fordernder Multilateralismus,” Frankfurter Allgemeine Zeitung, 4 February 2009.

[5] John J. Mearsheimer, The Tragedy of Great Power Politics (New York, NY: W.W. Norton, 2001).

[6] Josef Joffe, “Germany: The Continuities from Frederick the Great to the Federal Republic,” A Century’s Journey. How the Great Powers Shape the World, ed. Robert A. Pastor (New York, NY: Basic Books, 1999). Quotes from pages 135-137.

  • K Bledowski

    The author finishes with “Germany needs to convince allies and also weaker partners that it pursues common objectives and will contribute its share to the collective burden.” That is not a conclusion but a premise from which the analysis ought to draw a conclusion. Aside from a few quotes of others, I can’t see any policy-inducing corollaries in the article.

  • Chris T.

    The comment above makes a valid point.

    In addition, even the title of this essay states a premise, nothing more, as if those are the only two possible perceptions. What if Germany neither is (or desires to be) a hegemon OR a a free-ride?
    Perceptions is actuially what this “discussion is about, and can be completely divorced from reality.
    Assertions such as:
    “They further claim that mostly Germany harvested the economic gains generated by the common currency because its export-oriented economy exploited”

    So what? Just because they claim it, doesn’t make it so. In fact claims such as this are just put forward by others’ who are ONLY looking out for thei own, NATIONAL, self-interest.

    WHen for example, has French foreign policy ever been anything other than one looking to its own self-interest>? And why should that not be so? It is after all what the government is there to do.
    However, for Germany, rules such as these apparently should not exist.

    Even so, under any real economic body of thought (Adam Smith’s, Carl Menger’s/ L. von Mises’) friendly competition (advaincing ones self interest) leads to good outcomes for all. )

    The many problem of the EU as a construct is manifest in all the distortions this organization causes in all things economic, and the misallocation fo resousources that engenders. Dut its supranational character, this makes it much worse.
    Had Germany looked MORE for its own needs, than for those of supposed “common good”, much of this distortion could have been mitigated, if not prevented.

    Instead the author argues for more of the same.

    • Chris T.

      forgot to add about the “exploitation” quote:

      The claim is also wrong!
      The main effect of the Euro was a transfer of low German interest-rates for debt to those countries with high-interest rate debt.

      Such a transfer IS (close to) a zero sum game: it can not take place without the low end structure being raised.
      Thus, Germany for more than a decade now, has had higher interest rates than would have existed without the Euro.
      The additional cost of this is staggering, and outweighs the benefits made in the claim.
      Just another example of Bastiat’s “things seen and things unseen”:
      They only see the benefits, but do not (or willfully ignore) see the drawbacks. And the latter outweigh.

  • Prof. Giuseppe Sacco

    Synthetic and objective, this piece leaves the reader with a question: why there has to be an alternative between “hegemon” and “free rider”? The two roles, in their respective geographical areas, can easily co-exist. Germany can perfectly reap the benefits of “asymmetric economic interdependence” in Europe, while being a passive beneficiary of the peculiar type of public goods produced by the Atlantic Alliance.