For years it has been an open question who will be the informal “leader of Europe.” Over the last few years, it has been assumed that only Angela Merkel or Emanuel Macron could be serious contenders for the job—only natural given that Germany and France are the biggest countries within the European Union.
But the European project is in crisis once again. Angela Merkel is out, and the clout of her younger successor Annegret Kramp-Karrenbauer (AKK) has yet to be proven. Meanwhile, Macron’s support has dried up and Paris is burning, as a leaderless mob vents its frustrations at a President and his movement that have not delivered on admittedly vague promises of renewal.
The dynamic on the continent has always largely been determined by the dynamic between Germany and France, and today is no different. The European Union, and especially the Eurozone, is facing major economic challenges. Whereas large parts of Germany’s governing CDU and its Bavarian sister party the CSU are still insisting on financial stability and a not over-regulated market, France, following an economic tradition that has been well-entrenched in the French psyche since the days of Colbert, wants to take a different path.
France’s approach has long been to secure the competitiveness of its industry by devaluating its currency. From the year the Deutschmark entered the markets in 1948 until the introduction of the euro, the French Franc had lost much of its value against the German currency. It has become quite obvious that the French claim to being on equal economic footing with Germany is not really credible. French President Francois Mitterrand, who pressed hard for the euro, did so calculating that the Germans would never dare to endanger the new common currency and that they would, at the end of the day, always vouch for the debts of others. So far, the French gamble has paid off.
The past, however, is not always a reliable guide to the future. In retrospect, it was only a matter of time before German voters’ tolerance for redistribution would come to an end. That moment has not yet completely arrived, but the signs of its approach are everywhere apparent. The openly euro-skeptic party, the Alternative für Deutschland (AfD), which has not only entered parliament but is now the biggest opposition party in the German Bundestag, is one such harbinger. It has become increasingly difficult to persuade the Germans to bail out others when some of these people are more wealthy than the Germans themselves. That seems surprising given that salaries in Germany are among the highest in Europe. But when it comes to average household wealth the picture looks quite different. The rate of property ownership in Germany is far lower than in France, Italy or even in Greece. Furthermore, the average Italian is retiring earlier than the average German does.
Macron’s pitch for European leadership was in a way an extension of Mitterand’s game: talk up ever-closer union at the cost of promising serious domestic reforms in France. The recent violent protests have called into question his ability to deliver on those promises, and may have crippled him fatally, so it’s hard to imagine the European project being led by Macron from here on out. And Merkel, for her part, has been damaged goods since her fateful decision to embrace the migrants flowing into Germany. Her successor AKK may end up free of her predecessor’s taint, but she will find herself limited on European questions for the same reasons outlined above: The average German is in no mood to take on the debts of others.
The weakness of both Macron and Merkel, of both France and Germany, opens the door to another player on the European chessboard: the Austrian Chancellor Sebastian Kurz.
At first glance it seems controversial to claim that the Prime Minister of a country with less than nine million inhabitants can become the key European leader. But Kurz has proved he has more vision than any of his peers, and that he understands better than anyone how politics on the European level is going to work going forward.
On the key question of migration, Kurz was already positioning himself as a guy who can get things done while media mandarins from the West were celebrating Angela Merkel for her “bravery” in doing nothing. “I said that this is a big mistake,” the 32 year old Chancellor recently reminisced to the Financial Times. “If I look back to 2015 and the position of the European Union in those days, I would say there has been a dramatic change of position.” He is right.
In February of 2016, Kurz, then still Foreign Secretary of Austria, invited his colleagues from the Western Balkans to Vienna in order to negotiate closing down the migrant “corridor” leading to Hungary, Austria, and Germany. He did this in the face of loud protestations from the head of the EU Commission Jean-Claude Juncker, and from Merkel herself. As if to deliberately heighten the differences in approach, no one from either the EU Commission nor from Germany was invited to the meeting.
Whereas the euro crisis was mainly a north-south affair, the migrant crisis revealed a new east-west rift in Europe. The rift manifested itself most vividly in the founding of the so-called Visegard Group of countries—the coming together of Hungary, Poland, Czechia, and Slovakia—who all favored a drastically different approach to migration. But not only to migration! For these countries, an ever closer union within Europe is not a self-evidently desirable outcome. On the contrary, all of these states were part of the Warsaw Pact, dominated by Moscow, and rightly or wrongly, they feel neuralgic pains when being lectured and bullied by Brussels.
Austria is not a formal member of this grouping, but it is highly respected among them, and under Kurz’s leadership is successfully playing the role of a mediator between east and west. History is part of the reason for the easy relationships. All members of the Visegrad Group were either part of the Austro-Hungarian Empire or have kept historically close relations with Vienna. Before World War I, Austria was the dominant Western power in the Balkans, and as a result still has a deep understanding of the culture, history, and languages of this region. And during the Cold War, Austria, due to its neutrality, maintained special relations with all these states.
On migration, Kurz has been instrumental in obtaining European acquiescence to, if not outright unanimous support for, the Visegrad line. The informal ministerial meeting that took place in Salzburg this past September is a good case study. The meeting was closely watched for how Theresa May would fare. And indeed, she was the headline loser at the time, with the Europeans loudly rebuking her Brexit proposals. A Brexit deal would however emerge with time (and create problems for May at home), and so the Salzburg meeting has receded in memory.
But the meeting also marked another reversal that was much less reported: a split between Angela Merkel and Jean-Claude Juncker on migration. Juncker gave an interview to the Austrian media that said it all: “I made a proposal that I do not like myself: Countries that do not accept refugees should become more involved in other areas, such as funding border protection. Those who do not take refugees should at least provide for unaccompanied minors. I don’t believe that this would lead to protests on the streets in Hungary or Poland.” He may not have liked it, but this was a pivot to the Visegrad line on “flexible solidarity,” and it was what Kurz was assiduously pushing for in Salzburg. It was a stunning U-turn for the Commission president, and it left both Merkel and Macron not only stunned but isolated.
Kurz has not let up since. In October, he joined Hungary in publicly refusing to sign up to a UN migration pact. “We view some points of the migration pact very critically, such as the mixing up of seeking protection with labor migration,” he said at the time. The pact was a nonbinding, symbolic measure, the rejection of which ended up being equally symbolically powerful. Austria held the EU presidency through the end of 2018, and Kurz’s decision to speak out provided cover for several other European countries to come out in opposition. The final vote at the UN in December saw Hungary, the Czech Republic, and Poland voting no explicitly, with Austria, Bulgaria, Italy, Latvia, Romania, and Slovakia abstaining. Belgium voted for the pact, but its government fell over the issue.
The appearance of the so-called “New Hanseatic League,” a group of eight northern and Baltic states within the EU, trade-friendly and fiscally conservative, presents another example of Merkel’s grip on Europe slipping. With Britain apparently set to leave the EU, these states have clubbed together to ensure that they are not crushed by a Franco-German juggernaut. Instead of more French-style political integration, they are rallying behind goals like national responsibility and sticking to spending rules. In the past, it was Germany’s role to speak out for these states—and then to seek compromises with France, which in turn represented the so called “Club Med” group of southern states. But at the last summit of European finance ministers, it was the Dutch who watered down the high-flying ideas of Macron on a European budget, whereas Germany remained silent.
If Kurz can forge some kind of alliance between the “Hanseatic League” and the Visegrad States, it would be a gamechanger for the political dynamics of the continent. In that case, Germany will find itself in a highly inconvenient position: sitting between all chairs.
Fredrick the Great once said that the most important precondition for any good foreign policy is a good domestic policy, since “no one will be respected by others if he is weak at home.“ Kurz probably knows that dictum.