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June 30, 2021

Great Expectations (I): Time for a Südpolitik. A View from Spain

Many in Madrid hope that a post-Merkel government will accept that a monetary union is impossible without a fiscal union. In this and other areas, paying more attention to Spain would be a chance to advance the EU.

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Spanish Prime Minsiter Pedro Sánchez and German Chancellor Angela Merkel
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Most Germans want to have a European Union that resembles Germany: it should follow a federal logic, but shouldn’t be too centralized because then it would become too French. According to this view, the EU should also adhere to the principles of subsidiarity and have strong rules, but not too many “grand schemes” on the strategic front.

In the same way that Germans envision the EU, Spaniards have an idealized view of how Germany should be. Generally, Spaniards see Germany as an industrial power and a source of stability for the continent. Depending on who you talk to, however, you will get different visions of what a post-Merkel Germany should look like. Where there is strong consensus, however,  is on wanting a more European Germany and fearing a more “German Europe,” or even worse, a “German Germany,” as the former Minister of Foreign Affairs, Ana Palacio, put it.   

For people on the Spanish left Germany should be more “social” in its social market economy both at home and at the European level. This means tackling inequality, closing the digital gap, and raising wages, and at the European level promoting stronger convergence between rich and poor regions, fighting tax heavens, and developing a genuine industrial and strategic policy for Europe in the world.

People on the Spanish right, however, have a very different vision. They want a Germany that again strengthens the role of “the market.” After years of massive public intervention in the economy, only exacerbated by the response to COVID-19, they yearn for a normalization of interest rates, a reduction in bureaucracy and red tape, and fewer taxes down the road. Above all, they want Germany to insist that Spain implements the painful structural reforms they believe it needs to become more competitive.  

Green Hopes, Populist Hopes

This general division can be broken down even further into smaller ideological subgroups or niche movements. Ecologists, many of them now affiliated to the new urban and progressive party, Más País, have great hopes that the German Greens will win the next federal elections and bolster the green vote in Spain and the rest of Europe, thus accelerating the green transition. Militants on the far-left (some even further left than Podemos) dream of a Greens-Social Democrats (SPD)-Left Party coalition that will create a genuine European Union for “the people” and not just for the “merchants” they denounce. Given the SPD’s current weakness, they think this option is also the only coalition that can fight “creeping racism” in Germany and beyond.

On the opposite side, laissez-fair libertarians hope that Germany’s business-friendly Free Democrats (FDP) will do well and make Germany a bulwark against statism in the post-COVID era. The fear of this group is that great Leviathans are emerging in the United States and the EU, using competing with China as an excuse. Finally, the VOX voters, or at least their leadership, would welcome a good result by Germany’s far-right Alternative für Deutschland (AfD) to push back “multiculturalism and cosmopolitism,” the LGBT and gender equality agenda, and what they consider “the menace” of Islam.

Foreign Policy Wish Lists

This brings us to the debates on foreign policy. Here, too, views and desires differ and even, sometimes, clash. Atlanticists, some of them international relations “hawks,” want post-Merkel Germany to embrace the US-led Western camp wholeheartedly and loosen its ties with Russia and China: no more equidistance, no more ambivalence or hedging! By contrast, the “appeasers” or doves, some of them Asia enthusiasts, hope that Germany will continue to look East and try to improve relations with Turkey, Iran, Russia, and China despite their authoritarian regimes.

Then there are those who are more “French” and want a Germany that pushes with all its might for a European strategic autonomy that is worthy of the name. They want more advances in defense, technology, and financial sovereignty (including strengthening the international role of the euro) and the degree of political integration required to achieve it. This means moving from unanimity to qualified majority voting in many areas, especially in taxes and foreign affairs.

However, despite these differences, where there is a very strong consensus—and this was put in writing in a manifesto signed by former policymakers and experts on both the left and right—is in convincing Germany that the current monetary union cannot survive without a fiscal union. It is precisely Merkel’s lack of political vision that has been denounced by many Spanish intellectuals and policymakers, chief among them José Ignacio Torreblanca of the European Council on Foreign Relations. She has been taken to task across the board for being too timid or too short-sighted in not accepting this idea in the 2010-12 eurocrisis and praised for crossing her red line of “no eurobonds” in the current COVID-19 crisis by creating the Next Generation EU fund.

Incidentally, when it comes to generalities, the positions of Spain and Germany are considered very close. Both remain strongly pro-European and believe in an ever-closer union, in open markets, and a multilateral order based on the rule of law, protecting human rights and the environment. With regards to the economic agenda, however, especially the future of the monetary union, they are in opposing camps. The creation of a permanent fiscal capacity is a case in point. Thus, the hope in Madrid is that in the coming years the overall convergence will help to reduce the divergencies in the economic field, ideationally and materially. For this, as Ignacio Molina of the Elcano Royal Institute has suggested, Germany should develop a “Südpolitik” alongside its traditional French and Ostpolitik. This would mean moving from being the current “reluctant hegemon” (embodied by Merkel) to a “convinced and empathic leader.”

Not Paying Enough Attention

In numerous conversations with policymakers and officials from Spain and Germany, the feeling is that Berlin does not pay sufficient attention to Madrid. This is regrettable because Germany has in Spain an enthusiastic pro-European ally that is not a troublemaker within the Union (perhaps this is the reason why Berlin pays it less attention). And in a range of areas, be it digital connectivity, capital markets union, energy, migration, defense union, multilateralism, human rights, Latin America, and Africa, it could be a strong partner.

For this to happen, Spain in turn would need to become more proactive in European and foreign affairs. In the same way that Madrid demands more leadership from Berlin, the view in the German capital is that Spain needs to be more self-confident and take more responsibility in those dossiers where it has greater capacities. It needs to move from the traditional role of rules-taker to rules-shaper and even rules-maker.

In short, there are high hopes in Spain that a post-Merkel Germany will have greater strategic vision to deepen and strengthen the EU and that Spain can remain an important ally in this endeavor. Nonetheless, there is also a certain level of anxiety about whether Merkel’s successor will have her stature. As Javier Solana, the EU’s former high representative for foreign affairs and from the socialist camp, pointed out: “Beyond my ideological differences with her, I found Merkel to be a leader of the highest order. I have no doubt she will be missed both in Germany and the rest of Europe.”

Merkel brought together a lot of different ideological strands. She was a conservative, but also in many ways a socialist, a liberal, and a green. It is likely that the next coalition will have a mix of these elements too. This may disappoint those in Spain (and there are many) who want a “bolder” Germany in a particular direction, but it will please those who prefer a moderate and cautious Germany focused on continuing to be the anchor of stability for the Old Continent.   

Miguel Otero-Iglesias is Senior Analyst at the Elcano Royal Institute and Professor at IE School of Global and Public Affairs in Madrid.

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