The Germany-shaped void at Europe’s heart

LAST MONTH Olaf Scholz and Emmanuel Macron entered an EU summit with a plan. The German and French leaders agreed that a “strategic agenda” document, drawn up to set the EU’s priorities for the next five years, was inadequate. The passages on climate and migration were weak, and what about defence? But their extensive rewrites, drawn up just before the meeting, sparked a revolt among the other leaders, Italy’s Giorgia Meloni among them. Voices were raised, fingers jabbed, and the pair retreated in humiliation. They had failed the most elementary test of the European Council: avoid springing surprises on your colleagues.

The story would be just one data point in the EU’s long history of communiqué contretemps if it did not highlight a worrying trend. For if Mr Macron is no coalition-builder, Germany, the EU’s biggest economy and most populous member, is supposed to be different. But where the country once shaped the club’s approach to everything from fiscal policy to Brexit, under Mr Scholz it is punching well below its weight—and irritating its partners.

Interviews with diplomats and officials reveal two dimensions of German dysfunction in Brussels. The first is the dismal state of the three-party “traffic-light” coalition, comprising Mr Scholz’s Social Democrats, the Greens and the pro-business Free Democrats (FDP).

Previous German coalitions have hardly been models of harmony, and the so-called “German vote”—when an inability to find a common line forces Germany to abstain in EU votes—is well known in Brussels. But veteran Eurocrats say Mr Scholz is especially bad at imposing his will on his bickering ministers, and that policy shifts arrive far too late. The biggest offender is the FDP, which has upset delicate negotiations on, among other issues, phasing out the combustion engine. Yet “our problems are not about any one party but lack of leadership from the chancellor,” says Anton Hofreiter, a Green MP who chairs the Bundestag’s EU committee. “No wonder such a government has problems in Europe.”

The dysfunction hurts German credibility, complained the country’s EU ambassador in a leaked letter to his political masters in Berlin last year. Matters have only deteriorated since. Diplomats from friendly countries say they have begun to work around Germany rather than with it. Worse, say insiders, the mess in Berlin gums up Brussels’s inner workings as officials struggle to predict where Mr Scholz’s government might go next. “Talking to different ministries in Germany is like talking to different countries,” says one official working on Ukraine.

Then comes the second problem: the conduct of the chancellor in the European Council. EU summits are often testy, unpredictable affairs in which leaders’ personalities can be decisive. One official who has observed both chancellors closely says that, where Angela Merkel, Mr Scholz’s predecessor, “literally held the EU together” by taking soundings and shaping compromises, Mr Scholz merely states his position, offering no room for debate. The assessment is widely shared. “They negotiate like petty accountants,” recalls one Brussels-based official of a budget dispute. “Merkel wouldn’t have done that.”

What is the case for the defence? First, that Mr Scholz, who took office in 2021, is a relative newcomer; it took Mrs Merkel years to find her feet in the EU. Second, that conditions have changed: in the debt crisis of the 2010s a booming Germany found it easier to impose its will on weaker countries; today it is flirting with recession and managing different problems. And third, that Mr Scholz inherited a discredited energy and security policy (albeit one in part shaped by his own party) that, once Russia invaded Ukraine, left Germany “morally bankrupt”, as one diplomat puts it.

In fact Germany has a decent record on Ukraine. It sends more arms than any other European ally, has strengthened its own armed forces and has weaned itself off Russian gas. Vigorously rejecting claims that their boss is ineffective in Europe, figures close to Mr Scholz cite his support for Ukraine’s EU accession bid—including engineering an only-in-Brussels gambit of overcoming Hungary’s opposition by arranging for Viktor Orban to leave the room during the crucial vote—and his spearheading of an ambitious European air-defence project. They also point to German opposition to what they regard as bone-headed regulatory proposals from Brussels.

Yet the diplomacy often seems tin-eared. One Polish diplomat was “deeply disappointed with Germany” after Mr Scholz’s refusal at a recent summit even to countenance new plans to reinforce the EU’s eastern flank, which he blamed on delicate domestic budget talks. In 2022 Germany infuriated other governments by announcing a €200bn ($218bn) energy-subsidy package without alerting them. “The co-ordinating role that Germany used to have is gone because everyone is taken by surprise,” says Nils Redeker of the Jacques Delors Centre think-tank in Berlin. This makes it harder for Mr Scholz to press his case on matters like China policy or free-trade agreements, where he is often wading against the European tide.

Of course, many countries have awkward coalitions or idiosyncratic national priorities. And Germany’s legal bar on large-scale borrowing, and its fierce constitutional court, are structural impediments to EU endeavours pushed by others, such as a larger budget or more common debt. “People have much higher standards for Germany than they do for other countries,” says Mark Leonard, director of the European Council on Foreign Relations think-tank. The difference is, as Mr Scholz acknowledged when he took office, that Germany has a “special responsibility” for Europe’s success. So there is often a gap between Germans’ pride in their achievements and outsiders’ disappointment at unfulfilled expectations.

The Berlin-Berlaymont locomotive

Ironically, there is one effective promoter of Germany’s interests in Brussels. She just happens to sit outside the government. Ursula von der Leyen, a former German defence minister who has accrued unusual power since becoming president of the European Commission in 2019, co-ordinates closely with the chancellery in Berlin, despite a frosty personal relationship with Mr Scholz. “It’s helpful for Scholz to have someone who knows his mind better than he does himself,” says a confidant of the president. For instance, the commission recently delayed a proposal on defence financing that could have raised the spectre of common EU bonds: anathema to Germany. (Expect that issue to return in Mrs von der Leyen’s second term, which was approved by the European Parliament on July 18th.)

Other tricky discussions loom. Mr Scholz has said that admitting Balkan countries as well as Ukraine and Moldova into the EU is a priority. But new Dutch and perhaps French governments will be sceptical. Another important file is the capital markets union, a long-stalled project to smooth financial flows across Europe backed by Mr Scholz. Here the battle is internal: the FDP, including Christian Lindner, the finance minister, resolutely opposes compromise on matters like centralising market supervision. Hanging over everything is the prospect of a second Trump presidency, which risks trade wars and an end to American support for Ukraine.

Does the cautious Mr Scholz have the stomach for these fights? Advisers insist he does. But things are likely only to get trickier at home. Poor results in the recent European elections, and expected reverses in state elections in September, will only encourage the traffic-light parties to amplify their differences—especially as next year’s federal election comes into view. Not for the first time, Europe may find itself waiting for Germany. ■

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