Germany and the European Union: Post-Brexit Hegemon?

• Author: Bulmer, Simon
• Position: COMMENTARY - Essay

Introduction

The vote of the British people in June 2016 to exit the European Union (EU), initiating a process popularly known as Brexit, has opened up a wide range of questions about future political trajectories not only for Britain but also for the EU itself. The United Kingdom (UK) is scheduled to leave the EU on March 29, 2019, two years after triggering the Article 50 exit process. (1) One of the key questions in relation to the impact of Brexit on the EU is how will it impact intergovernmental politics and the balance between the remaining large member states? Who will provide the necessary leadership within the EU? Specifically, will Brexit lead to Germany assuming a more prominent role such that it becomes the EU's hegemon?

In exploring the possibility of Germany taking on a greater role in the EU, I consider first of all the likely consequences of Brexit on policy dynamics within the EU. I then turn to the issue of leadership in the EU. During the EU's crisis years' (the 2010s) Germany displayed the attributes of a dominant force in the EU, specifically in its economic strength. Historically, however, German governments had avoided leadership in the EU except in conjunction with France.

In exploring Germany's potential to play the role of hegemon it is important not to overlook the constraints that exist. For instance, owing to the burden of history Germany has eschewed playing a leading military role in post-Cold War Europe. Moreover, the September 2017 German federal election brought a Eurosceptic party--Alternative for Germany (Alternative fur Deutschland, AfD)--into the Bundestag, the lower house of the German Parliament. This development is part of an increased politicization of German European policy that has become evident over the last decade; the AfD's entry into the Bundestag is likely to trigger greater circumspection in Berlins European policy and new electoral dynamics.

Drawing from these steps in the analysis I will argue that German power will undoubtedly be important to the EU's future. The question is: how? In one scenario, Merkel's fourth government may be able to re-establish the Franco-German relationship, harnessing Berlin to the pro-integrationist agenda of French president Macron. In another scenario, Germany could play the role of hegemon. However, as will be seen, assuming the role of hegemon does not automatically translate into political leadership. A German government unable to take decisions despite its structural power could be a major problem for the EU.

What is clear in considering the scenarios is that Brexit is just one development shaping events. It cannot be analyzed in isolation here. Within the EU, 'rule of law' tensions with Hungary and Poland and the impact of rising domestic Euroskepticism, for instance, with the Italian populist coalition government installed under Giuseppe Conte, mean that the departure of the British 'awkward partner' (2) does not open a clear path forward for the EU. Similarly, the turbulence of international politics in the Putin-Trump era, and regionally within the Middle East creates an increasingly congested political agenda for the EU to confront. Germany cannot provide all the solutions to such a diverse set of challenges.

Impact of Brexit on EU Policies and Politics

The impact of Brexit on the political direction of the EU has received only sketchy attention. (3) What does Brexit mean for the policy balance within the EU? A first step is to explore what will be lost with the departure of Britain as a member state.

There has been considerable consistency in British European policy objectives regardless of the party in office. UK governments have consistently supported pragmatic approaches to integration rather than federalist visions. In economic terms, UK governments have consistently advocated for a liberal EU internal market, particularly in financial services, and for liberal trade internationally. Politically, they have privileged a form of integration in which member governments control the levers of power unless there are some concrete policy benefits: a utilitarian approach. They have consistently supported EU enlargement (including Turkey's application), although this posture has been interpreted as part of a strategy to support widening the EU at the expense of its deepening. Internationally, the UK has been a global foreign policy player, often seeking to act as a bridge between the United States and the EU, but not always succeeding (e.g. the invasion of Iraq in 2003). In defense terms, as a nuclear power the UK continues to be a major player alongside France and is a prominent supporter of NATO.

At the same time, the UK has consistently blocked a number of policy developments. The main policies affected have been social policy and taxation. The UK's reversion to insistence on NATO primacy since the defeat of the Labour government in 2010 has constrained developments in EU security and defense policy. In other policy areas, notably monetary integration and migration control, the UK's opposition to a common EU policy mutated into opt-outs from the single currency and from the Schengen passport-free zone.

In policy areas where the UK has been obstructive, Brexit may open up new opportunities for the EU-27. In those policies where it has secured opt-outs, the impact of Brexit may be more neutral (but more on that below). Whilst Britain has often been termed an 'awkward partner' in the EU, Brexit comes at a time when Hungary is another contender for this description.

The UK has been a major net contributor to the EU budget over the course of its membership. The full financial consequences of Brexit will become clear with the negotiation of the EU's Multiannual Financial Framework (MFF) 2021-2027. Other member states, particularly Germany, are going to have to take on more of the budgetary burden.

As Krotz and Schild have noted, a number of changes are likely to result from the above circumstances. (4) The EU is likely to become somewhat more protectionist in its trade policies. Germany may experience changed terms of trade with the UK, its third largest trading partner. (5) Nevertheless, Germany's exporting strength is likely to make Berlin a more outspoken liberal protagonist on trade issues in the UK's absence, changing its previous brokerage role. There will be a tilt away from the northern member states that support liberal trade policies both within the single market and in external trade policy towards more interventionist southern European positions. In a number of further policy areas, Germany has been able to play the role of honest broker. For example, in the negotiation of the MFF 2007-2013 at a time when the UK held the EU presidency during the Blair government (December 2005), Germany stepped in to act as a broker because the UK was unable to combine this role with its efforts to hold back the expansion of the EU budget. (6) Germany could find itself as the leading state favoring budgetary constraint in the negotiations on the next MFF, again departing from this role as a broker.

A further likely change arising from Brexit is the impact on states not in the Eurozone. With proposals on the table from both the Commission and French President Macron regarding the strengthening of Eurozone governance, non-members of the Eurozone may be less able to resist reforms that may lead to an inner core emerging in the EU. The Eurozone members could become the core states in the EU to a greater degree than pre-Brexit. Germany's economic strength would become even starker in this situation than in the EU. Moreover, any moves to a core Europe could prove controversial in the EU, exacerbating the divisions that already exist with central and eastern European states over the handling of the refugee crisis and, with Hungary and Poland, about constitutional and political changes that have called into question those states' commitment to the EU's democratic order.

The impact of Brexit on European foreign policy is particularly interesting. The EU loses a truly global player, potentially weakening the EU's international status. France becomes the pre-eminent foreign policy power in the EU. On the other hand, the UK has contributed just 2.3 percent of the personnel engaged in missions under the Common Security and Defense Policy (CSDP), meaning it has played more of a strategic guidance role in the EU context. (7) This low level of personnel commitment is due in part to the UK's other international commitments. Nevertheless, the UK may maintain some engagement with CSDP, as suggested in a May 2018 House of Lords report considering different options. (8)

There are signs that the EU is seeking to mitigate some of the damage of Brexit upon security and defense policy by moving ahead through permanent structured cooperation (PESCO), bringing together 25 member states on the basis of Articles 42 and 46 of the Treaty on European Union, (Denmark and Malta being the non-participants at this stage). At the same time, France and Germany have embarked on a number of joint armament and procurement projects in order to reinforce their capabilities through bilateral cooperation. Yet it is clear that Germany is more comfortable with a PESCO framework comprising as many member states as possible, whereas...