At next week's EU summit in Brussels, you can expect
the usual photos of backslapping European leaders sharing broad laughs and whispered
asides. But behind closed doors, things are likely to be a lot frostier: by all
indications, personal relations among EU power players are at a nadir. Jean-Claude
Juncker, prime minister of Luxembourg, has just deployed the spikiest insult in
the EU lexicon against German chancellor Angela Merkel: The German government,
Juncker told the German newspaper Die
Zeit, was handling its European business in an "un-European manner." Juncker
added, "Germany's thinking is a bit simple." In über-diplomatic,
consensus-obsessed Europe, where disapproval is usually expressed by arched
eyebrows and significant silences, it's rare for someone to draw a line in the continental
sandbox quite so clearly.
(And it's not only from abroad that Merkel is facing
criticism. Former German chancellor Helmut Schmidt added some incendiary
remarks of his own in an interview
with David Marsh for German business newspaper Handelsblatt. Asked about the conservative German central bankers
on whom Merkel is known to rely on for advice, Schmidt gave his harsh verdict: "In
their innermost hearts, they are reactionaries. They are against European
Juncker's outburst came in response to Merkel's outright
rejection of his proposal to allow establish joint "Euro bonds" that could
reduce the borrowing costs of debt-burdened EU member states.
And, in truth, it is getting harder to see what the
German endgame is. Berlin is professing that Europe's troubled economies can
and should secure long-term growth by means of fiscal discipline and improved "competitiveness."
That's fine in theory, but it doesn't explain how Ireland, Portugal and Spain
are supposed to service their existing debt in the face of rising borrowing costs
and sinking tax revenue.
Of course, what it does ensure is that Germany will
maintain its relative economic dominance. Germany's hardball no doubt appeals
to some of Merkel's domestic constituencies, but it may condemn the euro to
history's scrap heap, while doing irreparable damage to Berlin's relations with
its neighbors. Merkel should enjoy the pleasantries and chit-chat on the
sidelines of next week's EU summit, but she shouldn't take them for granted.