Reunified Germany revels in its new-found confidence

Date: 02/11/1995

SIX years ago, Germans on both sides of the vanishing wall were breathlessly witnessing the unthinkable: the silent collapse of a threatening world that most people assumed would survive for decades to come.

Six years later, the unprecedented integration of a bankrupt state of 18 million citizens has given birth to a new Germany that, if anything, seems more confident and stable than the Federal Republic of old.

The anxious soul-searching of the early days of reunification - the fear of old demons riding on a wave of economic hardship and political uncertainty - is giving way to growing pride about a difficult job well done.

At a time when Europe's big countries seem weakened by the collapse of their political class (Italy), crippling in-fighting (the UK), or conflicting policy aims (France), Germany's rulers are quietly setting out to shape the rest of the continent in the image of their own, successful country. The alternative, they say, is nationalism, conflict and the threat of war.

If the cornerstone of this strategy is monetary union, its architect is Chancellor Helmut Kohl.

The man who secured unification in record time dislikes dwelling on Germany's dark past and feels a deep bond with his fellow countrymen. He is one of the very few statesmen around to see his country's aggrandisement as a menace to global stability, rather than as the ultimate political aim.

Like many long-serving rulers, having lost virtually all interest in domestic policies, Kohl's sole political project after 13 years in power is to end the centuries-old reign of the nation state, seen as a dangerous facilitator of devastating conflict.

Meekly waiting for the people of Europe to bring this about is not good enough, argues the chancellor.

The genial southerner is driven by a strong sense of urgency. Kohl is convinced that political agreement to a radical shift of power away from the capitals might be impossible to secure once World War II has receded from memory into history and a strengthened Germany outgrows its unification pains.

Since the prospect of securing its main partners' agreement to a spectacular leap into full political union seems uncertain at best, Germany's government has - with tacit French support - decided to seek it through the backdoor of economic and monetary union.

The strategy is daring and simple: no common monetary policy, according to Germany, will be sustainable without a common budgetary discipline, thereby setting strict limits to national sovereignty in fiscal matters.

Having secured a common tax and spending policy, you get the nucleus of common government. The removal of national governments' control of their military is then but a few steps away. Large-scale conflict in Europe - a threat which, as remote as it may seem today, has in Kohl's analysis yet to be removed - would be next to impossible.

This is the chancellor's plan, firmly backed by the ruling parties and faithfully supported by the main opposition force, the Social Democrats of the SPD. Even if the upcoming review of the Maastricht Treaty does not bring about the quantum leap in European integration that Germany is ultimately striving for, the step into monetary union would still secure a level of cooperation that makes EU integration 'irreversible', as top German politicians are keen to point out.

Ideally, say the government and opposition alike, Maastricht II should abolish unanimity voting in the Council of Ministers (providing for an opt-out from individual decisions such as the use of military force), extend the Commission's right to initiate new legislation to foreign policy and home affairs, and fully integrate the European Parliament into the legislative process.

But given the extent of British - and even French - opposition to such sweeping changes, Germany, while shaking its heads about its partners' perceived lack of courage and foresight, has grudgingly resigned itself to settle for less.

Yet the large consensus of the political establishment around the government's European strategy should not obscure the fact that the project could still run into strong opposition. The fact remains that most Germans, while increasingly losing their Euro enthusiasm (like others in Europe), remain deeply attached to the Deutschmark as a purveyor of stability and prosperity. The mighty Bundesbank could easily use its enormous influence to make opposition to EMU practically insurmountable, the SDP might be tempted to fight the next general election as a 'Save the D-mark' party and the Bundestag could scupper EMU with a single vote.

Take the Bundesbank first. As the iron-willed steward of the Deutschmark, Germany's central bank is widely suspected of secret opposition to an EMU plan that would consign it to history.

Given its standing with financial markets, economists and public opinion alike, the Buba could, with a few strong words at a critical juncture, give popular resentment against the D-mark's demise such backing that the government might be unable to ride out the storm.

This threat would be even greater should the SDP opposition decide to throw long-term political credibility to the winds and seek electoral salvation in a desperate attempt to pose as the saviour of the Deutschmark. Although the next Bundestag election is only scheduled for October 1998, its leadership's present disarray - combined with a series of electoral disasters and an unprecedented slump in the opinion polls - is throwing the party into an agonised search for any strategy to beat Helmut Kohl.

Senior CDU politicians have started voicing fears that the SDP might well sacrifice its European credentials, its past record and its deep convictions, in an all-out fight against electoral annihilation and go into battle under a populist Deutschmark banner. This prospect worries even Helmut Kohl, who is said to have instructed the CDU leadership to hold its fire against the opposition to give the SDP time to recover.

The threat of SDP opposition is all the more potent since the Bundestag has reserved the right - confirmed by the constitutional court in Karlsruhe - to hold a last vote on monetary union when the time comes. True, the parliament's vote does not represent a fully-fledged opt-out, as is sometimes mistakenly reported. The parliament - whose upper chamber, the Bundesrat, is now controlled by the SPD - will vote only on the government's assessment that all treaty requirements for EMU are respected. But in a heated period of electoral campaigning, such as the year 1998 is likely to be, a 'No' even to that might be deemed to be possible.

Starting with the man at the top, Germany's government is well aware of these threats. In choosing Hans Tietmeyer to head Buba, Kohl has selected a man who combines real standing in monetary circles with an old allegiance to the chancellor, which should weigh in the balance when the time comes to stand up and be counted. But the German people may well remain the key factor. The government is currently racking its brains over a massive public relations campaign extolling EMU's advantages.

Kohl will need all of his growing standing if he is to reconcile Germans to parting with their beloved Deutschmark.