Germany and stability in Europe

Helmut Kohl's domination has ended with a bang and Europe is now a problem. Seeking to be tied down lest the jackboot reappear is a poor kind of fatalism, says David Walker

Klaus Kinkel, the German foreign minister, says he wants to spread "the German culture of stability" to the rest of Europe. This must be the famous German sense of humour. Stability? Nearly five million Germans officially unemployed, a figure not seen since Heinrich Bruning was Chancellor in 1931 - and guess who was his successor but one?

Stability, when striking miners refuse to get their tanks off Helmut Kohl's lawn and extract from him yet further subsidies for a coal industry where every single ton costs the taxpayer 200 DM (pounds 80) - around 10 times its world market value.

This is the Germany where a secret report says a third of the railway network needs to be cut ), the steel industry heavily rationalised and health care sharply reformed. Where the pension system is stacking up liabilities at an unsustainable rate but where the governing coalition can do nothing without the assent of the opposition (who control the upper chamber of parliament) and they won't play ball.

Oh yes, and this is a country where some Germans give prizes to foreign authors of books alleging virtually the entire nation had complicity in the extermination of European Jewry at the same time as others (including some senior members of Chancellor Kohl's coalition partners, the Christian Social Union) deplore the public exhibition of pictures containing incontrovertible evidence that the Germany army was an active perpetrator of atrocities across Europe.

Stability, Herr Kinkel, when the only chance the unemployed have is for the Bundesbank, currently repentant after having subjected Germany to masochistically hard levels of currency appreciation a couple of years ago, allows the Deutschmark to soften

Germany is, in short, in a bit of a mess. The era of Chancellor Kohl's dominance ended with a bang last week; the Christian Democratic Union is scrambling for the succession stakes. Kohl's great work - reunification - still casts a shadow: the east German economy is far from sorted, and public finances will long bear scars.

But it is important, especially for us, the British, with all our historical baggage, to understand just what the German malady amounts to. It does not mean the end of Vorsprung durch Technik. At the same time as the miners were demonstrating in Bonn and Berlin last week the regular Cebit techno- fair opened in Hannover. German enthusiasm for the Internet is burgeoning; the idea that Germany is not going to be a major player in new technologies won't wash.

What Germany needs is a dose of "Thatcherism" in the sense it needs to move away from old staples such as coal and steel and probably also away from the generous assumptions which underpinned the "social market economy" (a creation, let it not be forgotten, of the conservatives Konrad Adenauer and Ludwig Erhard).

How well will German politics cope? If they can select a leader with more appeal than Oskar Lafontaine the Social Democrats must be in with a chance for the national elections due next year. Then it would be down to them, out of power since the early Eighties, to deal with the unions, welfare, tax reforms, and (since they might need the greens as coalition partners) the environment.

It is a heavy list. But those who spend their time examining the entrails of German democracy for signs of failure and incipient fascism are going to be disappointed. The German political system is in rude health. Functioning federalism which can still happily embrace cultures as different as those of Bavaria and the Saarland is one of the glories of the postwar constitution.

The real German problem is Europe. This is apparent in the sense that Maastricht and EMU have been allowed to become arbiters of the fate of significant politicians, not just Chancellor Kohl but also the CSU leader and finance minister Theo Waigel and many of their colleagues, too. At this stage in the economic cycle, with unemployment as high as it is, German leaders need extensive room for manoeuvre. Instead they have allowed the European "project" to box them in. Read my lips, Herr Waigel says: 3 per cent is 3 per cent - referring to the maximum German budget deficit for EMU entry.

But how will the Kohl government reach it? Buying-off the miners will cost millions of marks. Tax revenues are running below expectations. EMU involves the end of the Deutschmark, the abolition of the Bundesbank - the destruction of two great sources of German postwar identity. And in aid of what? It is too easy to reply in terms of Chancellor Kohl's personal European aspirations. It is not just him. The silence of the opposition and the trade unions on EMU is even more telling - mildly critical remarks by the SPD leader Gerhard Schroder are treated as revolutionary.

When Theo Waigel went to Brussels last week he complained about contributing the equivalent of pounds 7.5bn a year to the EU budget, on top of Germany's huge direct contributions to regeneration in eastern Europe. "These are things we are doing not for Germany but for Europe"he said.

But why? Why this clinging, to a European scheme which may be preventing German adaptation and reform, may be stopping Germans asserting legitimate self-interest? It is because Europe stops Germans having to think about their future as a nation. You can hear it from young intellectuals or old CDU hacks. They talk about merging Germany into Europe. We cannot handle a "Europe of Fatherlands" said a leading intellectual the other day because we would be bounced back into Greater German aspirations. It is a version of the Old Adam argument: tie us down, pen us in or else demonic forces will force us to put our jackboots on.

It is a poor argument, embodying a dangerous kind of fatalism. Europe will never wash away German history or German nationality. In his speech after awarding Daniel Goldhagen the Democracy Prize for his book Hitler's Willing Executioners, the philosopher Jurgen Habermas said the Germans were too taken by this kind of pessimistic historicism. What happened in the Thirties and Forties was the result of a one-off concatenation of ideas and mind sets.

Europe may even be an impediment to the Germans realising what they have accomplished post-war, and rejoicing that they have it in themselves to solve their own problems.