New Delhi: In the words of MK Narayanan, former Indian National Security Adviser, “The European Union is today a pale shadow of what it appeared to be only a few months back,” and Foreign Minister Jaishankar rebuked the EU, stating that India looked for partners and not preachers. The EU, designed to create a shared geopolitical space, is now in disarray. Despite recession for over two years, Germany wants to preserve its economic leadership; France, with limited military capabilities and domestic disunity, asserts power superiority, Britain after Brexit is alarmed at the fragile NATO alliance and is interested in being part of ‘Europe’ again. Poland maintains privileged ties with Washington, Italy conducts an independent foreign policy and small European states scramble for relevance. Brussels, meanwhile, fields Commission president Ursula von der Leyen and foreign affairs spokesperson Kaja Kallas who lack authority because European unity has hollowed out. Western Europe comprises aging powers, their goal being to be associated when Washington, Moscow and Beijing make decisions. Only the USA seems able to bestow EU politics a sense of direction.
In East Europe, Hungary and Slovakia resent Brussels and align considerably with Russia, while Spain and Italy decline to consider Moscow a threat. In Romania, rightist George Simion, protégé of pro-Russian anti-NATO Eurosceptic Calin Georgescu who was disqualified over alleged Russian interference and disinformation, is favoured to become president in voting on 18 May.
The Euro became Germany’s instrument of control when southern EU states faced financial crisis and Chancellor Angela Merkel imposed austerity during the eurozone crisis and the Covid-19 pandemic. Southern Europe was bailed out on the backs of German prosperity, and when the Ukraine conflict led to rupture of Russian-German ties, this was welcomed across Europe. EU enlargement, once a geopolitical project, became a liability; it failed to give Brussels and Western Europe traction because the new members looked towards Washington instead. The EU’s task became one of managing decline, with interdependence within the bloc growing weaker.
Germany, the ‘debt brake’ and Alternative for Germany (AfD)
The rampant inflation that characterised the Weimar Republic made Germans fiscally conservative and fretful over public debt, conflating individual frugality with the priorities of the state. Austerity was enshrined as the solution to inflation and fascism. But Germany’s government under Friedrich Merz, chancellor from May 6, used the discredited pre-election parliament to abolish the ‘debt brake’, which removed restrictions on public borrowing for a rearmament programme, assistance to Ukraine, and €500 billion to be spent over 12 years for climate action and infrastructure, with individual German states also empowered to assume additional debt.
Germany, once the engine of Europe, resorts to public debt to relaunch its rapidly deindustrializing economy that once thrived on cheap energy from Russia. The dilapidated German military needs modernization while Ukraine is likely to be a long-term burden; it is impossible to define the separation between military and civilian deficit spending. Even Germany’s chief auditing body has criticized some proposed expenses that should have been remained subject to the debt brake. German governments are always coalitions, and the exclusion of the AfD, the second largest party and in some polls now the most popular, is an anomaly. Excluding the AfD serves to make it stronger and the established parties less so. Expecting no improvement in conditions, Germans feel they remain stuck under old management and most East Germans wish to restore Russian ties and resume cheap energy benefits.
AfD and Ban Threats
AfD came second in February’s federal elections winning 152 seats in the 630-seat house, but has been designated right-wing extremist by the country’s secret service — “The … understanding …within the party is incompatible with the free democratic order”. The Berlin foreign ministry defended this assessment after US Secretary of State Marco Rubio called it “tyranny in disguise” and Vice-President JD Vance said the Berlin Wall was being rebuilt.
AfD has called the judgement “clearly politically motivated”, a “severe blow to German democracy”, and that it was being “discredited and criminalised”. The government argued that the agency had made its decision with “no political influence whatsoever” in an unpublished report of 1,100 pages. The intelligence findings are now challenged in court but unlikely to succeed, and some politicians have called for an AfD ban under Germany’s Basic Law that parties that “deliberately undermine the functioning of Germany’s free democratic basic order” can be proscribed if they function in a “militant and aggressive way”. Vice chancellor Lars Klingbeil of coalition partner the Social Democrats said that while no hasty decision was required, “They want a different country, they want to destroy our democracy. And we must take that very seriously,” he told Bild. A vigorous debate is now joined in Germany on banning AfD, which will lead to greater polarization and alienation of East Germany, the stronghold of AfD.
Disunity in the Ruling Coalition
Germany is ruled by coalition; the present formation groups the Christian Democrats, Christian Socialists and Social Democrats, but internal tensions are clear. The coalition has sufficient strength in parliament but insiders claim there is grumbling about cabinet nominations, policy compromises and the huge borrowing package pushed through the old parliament in its final days. The abrasive and erratic style of Merz, who never held government office previously, fails to convince some followers that he is suitable for leadership, as was evidenced by his failure to be elected chancellor in the first ballot on May 6, regarded as a humiliation that presages difficult days ahead.
