Monday, 30th October 2017

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A view from Berlin

The European Union has as many troubles as the Indian Union

By Amit Dasgupta & Krishnan Srinivasan
  • Published 30.05.16

In a Europe beset with an insignificant rate of economic growth and problems related to the refugee influx, internal divisions are growing larger. Given the threats from Islamic extremism, doubts about the value of free movement in the Schengenarea, the Eurozone debt, general disillusion with the European Union as manifested by a British referendum in June to decide whether to leave it, and the rise of populist political right- and left-wing parties, Europe is in unprecedented difficulties. For India, which has viewed Europe as an important economic partner and an advocate of free trade, this is not good news.

Right-wing extremism is on the rise in Europe among the newer EU members in the east, like Slovakia or Poland, and in Austria, which has a history of flirting with those who have an ambiguous relationship with Europe's darkest hours. Even in the Netherlands, which is more Europe-minded than most member states, the right-wing Geert Wilders mobilized a majority for a non-binding plebiscite against an EU association agreement with Ukraine, the very agreement that triggered a separatist war in the east of that country. None of these populists has a coherent political agenda to speak of: as in the United States of America with Donald Trump or the Philippines under Rodrigo Duterte. These are anti-establishment personalities who command widespread popular support.

European mainstream politicians have failed to give European integration the impetus it deserves as one of the success stories of post-1945 history, and developments after the Cold War have worsened the situation. The Organization for Security and Co-operation in Europe is an example of how an entity can grow too big to function, and whether in the long run an EU of 28 member states is going to be viable is an open question. An extended Europe is now little more than a common market, lacking common values, a common foreign policy, and even solidarity. Small wonder that the president of the European Commission has, without naming them, deplored the fact that many members are "part-time Europeans". Behind Europe's borders are areas of instability to which the EU has not been able to formulate any response. There is lack of leadership: François Hollande has been a lame duck throughout most of his French presidency, and Britain's David Cameron is not convincing on the European stage. Worst of all, Germany's chancellor, Angela Merkel, over the years praised as the world's most powerful woman, is going through a deep crisis.

Germany's economic data are outstanding, with the lowest unemployment rate since unification and an export boom. Notwithstanding the wealth of the country, to a great extent based on the opportunities of the European common market and the common currency area the Eurozone, the Merkel administration has challenged the EU's solidarity. Greece had no doubt falsified certain statistics to fulfil the criteria for Eurozone membership, but the German response was irrational. Instead of following the accepted wisdom that any nation needed stability and the creation of markets, Greece became the target of German prejudices that characterized the Greeks as lazy and untrustworthy in contrast to the hard-working and honest people of central and northern Europe. Instead of making investments into an economy with hardly anything to export and therefore unable to balance its books, Greece and its population have been penalized.

The influx of refugees has intensified European xenophobia. Eastern Europe insists on remaining white and Christian, which has to do with the lack of experience of immigration on any large scale. The German story is different. From the 1950s, West Germany had invited so-called 'guest workers', creating the illusion that they would return home one day although their children grew up in Germany. Today the largest group of such people is Muslim with Turkish roots - roughly three million out of a population of 80 million. Their contribution to Germany is beyond offering an additional workforce; they form an integral part of German society. Ageing Europe needs an influx of young and educated men and women, and not purely to guarantee the continued existence of pension funds; that is why Germany's green-card initiative was designed to attract Indian information technology specialists and why German industrialists are anxious to absorb the new migrants into the labour market as soon as possible. No doubt learning German, adapting to a new environment and obtaining the necessary qualifications will take time, but if any country has the means and the track record to manage that process, it is Germany.

While a silent majority supports Merkel's open-door policy, the public debate is dominated by resentment. The anti-foreigner East German Pegida (Patriotic Europeans against the Islamization of the Occident) and its related party, Alternative for Germany (AfD), might have remained transitory phenomena had Horst Seehofer, the chief minister of Bavaria and head of the Christian Social Union part of Merkel's governing coalition, not joined the movement. Following the credo that there must be no party to the Right of the CSU, Seehofer criticizes the coalition leader, Merkel, for her liberal policy, and the chancellor, who previously was adept at dealing with challengers, appears weak even on television. Perhaps instigated by her, a discussion has started in world media on whether she might be a candidate for the post of the United Nations secretary-general.

The vast majority of the refugees being young, single, male and Muslim, Seehofer has successfully played on anti-Muslim prejudices, and the effects were seen in recent German state elections, where the AfD, a complete newcomer, was very successful. In Saxony-Anhalt, the party won more than 25 per cent of the seats, forcing the remaining democratic parties to form an emergency coalition, and in highly conservative Baden-Württemberg, the success of the AfD has forged the first ever coalition government between the conservatives and the Green Party. Past experience suggests that the performance of new anti-establishment parties in Parliaments is such that the AfD might disappear after only one legislative tenure, but this will take time given the embittered atmosphere in Germany, and it appears doubtful that Merkel will survive many more years as chancellor. After more than 10 years in office, this may be considered a natural development, but with the continent lacking leadership and Germany any other major national figure, the day might come when Seehofer regrets having ejected the skipper from the ship.

Europe's internal problems affect its foreign initiatives. A constructive attitude towards China's One Belt-One Road initiative has been signalled, but the EU has yet to demonstrate a political and financial capacity to participate in the enterprise. The proposed Transatlantic Trade and Investment Partnership with the US is another casualty: negotiations are unlikely to finish before the US presidential election because of European public anxiety that the negotiations have been secretive and will affect consumer rights. In spite of a declared interest by EU leaders in negotiating agreements with big and growing economies and increasing trade and investment with Asia, disputes concerning industrial overcapacity in sectors like steel vitiate the atmosphere in China-EU trade and investment talks, and Japan-EU trade negotiations are reeling. The Singapore-EU Free Trade Agreement is stuck in court, and the EU-India FTA discussions are deep-frozen. Europe is not alone in its increasingly sceptical posture on trade agreements: the US has similar problems, and it is significant that all its presidential candidates, and the Congress, are inclined against the Trans-Pacific Partnership and other mega trade accords.

Indian sentiments towards Europe as a partner in its modernization and integration in the global economy remain positive, and the cultural, educational and touristic links are considered highly desirable. India and Europe have been strongly interconnected over centuries, but both have failed so far to elevate this relationship to the optimal level. The Indian Union presently faces manifold difficulties, but those of the European Union are no fewer and more existential.

A. Dasgupta is a senior researcher at the Federal Army University, Munich. K. Srinivasan is a former foreign secretary