Throughout the European Union’s sovereign debt crisis, the conventional wisdom has portrayed Germany as leading the EU, in particular by imposing its economic policy preferences on the eurozone. A quick glance at Greece, Italy and Spain, suffering ever more acutely from austerity measures imposed at Germany’s insistence, would seem to confirm that perception. Germans are convinced that these countries need still more of the austerity cure, while Athens, Rome and Madrid are trying to convince Berlin that the medicine is just as fatal as the disease.
The outcome of this argument will determine who leads the EU moving forward, and although Germany seems to be the most powerful player these days, it would be wrong to assume that Berlin has already won that battle. In reality, Germany is already pretty isolated, and a new European coalition bent on pushing back against the “Berlin Consensus” seems to be forming.
Back in 1994, a paper (.pdf) co-authored by Wolfgang Schäuble, today Germany’s finance minister, and a German parliamentarian observed that “Germany is bigger than all its neighbors, but not bigger than all its neighbors together.” Avoiding the emergence of a European coalition against Germany, the paper therefore concluded, should be a strategic priority for Germany, with the promotion of European integration as the surest antidote.