The federal election in Germany marks the end of the era of chancellor Angela Merkel who had been in charge for 16 years. She evolved into a remarkable leader and trusted partner of many heads of governments around the world.
Given Merkel’s important role as a leader in world politics, what implications will her retirement have for Germany and international politics? Here are a few assumptions:
Germany’s foreign policy will not change dramatically
Contrary to some discussions on a shift in foreign policy, in particular a harder course towards China, any shifts will be in tone rather than substance. Why? Apart from points of style, there is a broad underlying consensus regarding Germany’s strategic interests and an implicit understanding about its role in global politics, as a moderating force between East and West.
While the next German government will undoubtedly seek to strengthen transatlantic relations, there is a cross-party consensus that in order to protect its interests, and to remain relevant, Europe must be an independent force in international politics.
Europe will be in a freeze-mode until mid-2022
With the exit of U.K., Europe more than ever depends on the functioning of the Franco-German engine, which is essential for any major European initiative. With German government-building likely to take some months, and French presidential elections in May 2022, Europe will focus on internal dynamics until mid-2022.
This doesn’t mean Europe will not play a role on the international stage until then — Germany takes over the G-7 presidency in January, and Macron will seek to campaign on the back of his international leadership role (helped by France holding the EU presidency from January) — however, Germany’s and France’s actions will be driven by the electoral considerations at stake. And if Macron gets reelected, he will take over the role of No. 1 politician in Europe.
President von der Leyen will seek to fill the vacuum
Merkel’s exit and Macron’s election campaign creates a leadership vacuum for the time being. EU Commission President Ursula von der Leyen will try to fill the vacuum. In contrast to her predecessors, von der Leyen has already been successful in increasing the commission’s power in her first two years in office. How? By making the commission the central player for Europe’s recovery policies via the creation of a 750 billion euro fiscal stimulus program, and by making access to the funds conditional on compliance with the EU’s fundamental rights.
In addition, von der Leyen is leveraging the EU Commission’s regulatory powers to push for a number of high-impact legislative initiatives, from a forthcoming supply-chain legislation that could be a game-changer for market access in relation to ESG and forced labor standards, to climate and trade policy, to the regulation of platform businesses.
The supply chain law in particular could have global ramifications, as it will require EU and non-EU businesses to take responsibility of its entire supply chain in terms of environmental, human and labor rights standards, or risk seeing their products banned from the world’s biggest market. Every corporate with supply chains and business partners in particular in emerging markets will face the challenge to ensure full transparency and force its partners to fully comply to ESG standards.
Europe will emancipate itself from both the U.S. and China
Despite the optimism across Europe capitals following the election of President Biden in the U.S., the U.S.-EU relationship will not get back to where it was in the post-WWII era. This is for two reasons: a) Europe and the U.S. do not have identical interests and priorities (which is why the EU consciously decided to conclude the EU-China Investment Agreement without consulting with the U.S.); and b) the transatlantic region is no longer the top priority of the U.S. (and Europe arguably of limited strategic importance in the Asia-Pacific from a U.S. perspective).
The Biden administration has already concluded that Europe will not blindly follow the U.S. on China and is hence putting its emphasis on strengthening relations in the Asia-Pacific, even accepting temporary diplomatic strains with Europe, as the case over the Australian cancellation of its submarine order from France has shown.
Just like Europe’s political leaders, Germany’s top policymakers have arrived at the conclusion that as geopolitical tensions in the world are back and here to stay, Europe must take its fate in its own hands and do more to protect its strategic economy and interests. Interestingly, China, Europe, and the U.S. all follow a similar playbook of reducing supply-chain vulnerabilities, and strengthening its industrial base, and investing in next-generation technologies. As a logical next step, Europe will invest heavily to decrease dependencies on other markets, including the military dependency from the U.S.
The big question: new mode of strained cooperation or global impasse and tensions
The big question going forward is whether the obvious geopolitical tensions, which are based the ongoing power shift, competing interests, and different worldviews and ideologies, will lead to a permanent standstill in global relations or whether a path forward can be charted.
The 90-minute phone call between President Biden and President Xi in which both emphasized the need for sustained dialogue to manage the relationship is a good sign, but can only be a starting point.
Depending on how Europe plays its cards it can either be a marginal player in this great power arena, or a third force that can help reduce tensions and trigger breakthroughs on key challenges where cooperation is possible and essential – from climate change, to inclusive economic growth and human progress, to an ethical and human-centered approach to technological innovation in key areas, from AI to biotech.
At the moment, the focus is almost entirely on what divides the China, the U.S., and the rest. However, while power competition is here to stay and requires careful management, in particular of potential flash points such as any changes of situation regarding Taiwan, there are numerous areas, where interests and even valued are or could be aligned.
World wasn’t flat under Merkel and will stay fluid without her
The 2020s started with the world facing a historic public health crisis. Now, the next year will be critical in setting the path for global relations: after the German government handover from Merkel, the French elections, and the U.S. having finalized its China strategy, it is critical that world leaders carefully manage existing tensions and find the courage to rise above national interests and find avenues for consensus to tackle the enormous challenges humankind and our planet are facing, leveraging the potential of human ingenuity, and smart markets.
Joachim Koschnicke, a former adviser to Angela Merkel on strategic planning and communication, co-leads public affairs offerings at Finsbury Glover Hering in Berlin.
The views and opinions expressed in this opinion section are those of the authors and do not necessarily reflect the editorial positions of Caixin Media.
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