Lessons in Unification: Germany's History and the EU's Future
From STRATFOR - Global Intelligence
By Marc Lanthemann
leaders will soon return from summer vacation, and when they do, they
will be forced to confront problems that persisted in their absence --
namely, high unemployment and a looming consumer credit crisis. Some
have expressed optimism over recent improvements in the European crisis,
but German leaders may be less assured. More than anyone else, they
understand that the debate over whether the European Union should
integrate further is unavoidable; further integration may be one of the
only ways the bloc can outlive its current problems.
understand this because Germany's own unification was such an arduous
process. It took decades of war, major technological shifts and
extraordinary leadership for the various German mini-states to unify.
Ultimately, they came together for one reason: survival. Now Germany
must once again measure the risks and rewards associated with
integration, only this time for the sake of preserving the whole of
Europe. But there is a limit to how much Berlin is willing to sacrifice
for a group of nations that innately distrusts German power.
a model of governance, the European Union failed simply because it was
never executed fully. In 1992, a few countries within the European
Union's free trade zone agreed to abandon their own currencies for a
common currency, thereby relinquishing their monetary policy to a
centralized bureaucracy, the European Central Bank. They did not agree
on what their next steps should be toward further fiscal, and thus
political, integration. The eurozone has since expanded to include 17
countries, but it did little to change the fact that the value of money
was created in one place but spent in another.
arrangement proved to be an extraordinary generator of wealth in times
of global prosperity, so long as financial markets regarded Greece's
economic risk to be on par with Germany's. But it left the eurozone
uniquely unequipped to deal with large-scale economic crises. Without
monetary control, individual countries could not devalue their
currencies -- a common practice for escaping recessions. Meanwhile, EU
institutions were unable to implement and enforce a coherent strategy
because they lacked the fiscal and political control over their
constituent members. By dividing power between the countries and a
centralized bureaucracy, each part is left unable to move effectively,
and the entire system becomes paralyzed.
its current form, the European Union is inherently unstable and
unsustainable. However, many Europeans still believe the Continent can
and should be unified; for them, unification is a path out of the
current crisis. And they are right to think so. In theory, a federalized
Europe would be more stable and more prosperous than the current
are only the most recent Europeans to dream of a unified Continent.
Many before them have attempted to bring so many countries under the
aegis of one polity, but none were able to bridge the interests of so
many powerful nations. The problem is that their attempts began with
bloodshed and ended in chaos.
it is not a perfect analogy for the formation of the European Union,
Germany in the 19th century is perhaps the best example in modern
history of a successful unification. Unlike Europe, Germany was the
product of polities with common ethno-linguistic roots. Nonetheless, its
composite parts were an assortment of competing mini-states whose
sacrifices helped build a prosperous nation. German history could inform
Europe's understanding of the true costs of unification. For its part,
Berlin should bear in mind the lessons of unification as it is forging a
true European Union, should it choose to do so.
often than not, new political systems are rooted in the ashes of war.
The European Union and Germany share this tradition. Theirs is a legacy
of birth marked by conflict so severe that it destroyed the old system and gave way to unorthodox solutions previously unthinkable.
European Union came from the trauma of World War I and World War II.
This 30-year period brought what was then the most powerful group of
nations in the history of the world to its knees, leaving behind a
ruined, exhausted and divided Continent.
Napoleonic Wars brought about modern Germany. By the end of the 18th
century, Germany's predecessor, the Holy Roman Empire, was composed of
nearly 200 quasi-independent states in an area that covered what is now
Poland, the Czech Republic, Slovakia and many others in Central and
Northern Europe. This disunited band of bickering principalities,
duchies and electorates was utterly incapable of standing up to the
citizen armies unleashed after the French Revolution. The revolutionary
armies eventually consolidated under the control of the general-emperor
Napoleon Bonaparte, easily defeated the haphazard coalition of German
forces and their allies and steamrolled through Europe before reaching
took 22 years and six successive coalitions by all the major European
powers to finally defeat the French armies. The Holy Roman Empire had
been completely dissolved and the Napoleonic Empire, through its chief
diplomat, Charles Maurice de Talleyrand-Perigord, had encouraged a
process whereby small German states would be incorporated into their
larger neighbors to ease political transitions. By the early 19th
century, only about 40 German entities remained.
The French Revolution
was as instrumental for creating Germany as the two world wars were for
creating modern Europe. The French Revolution created new ways of
thinking about what it meant to be a nation-state. Years of bloodshed
left behind a group of exhausted nations conscious of their own weakness
as the world around them changed. However, a different kind of
revolution was necessary to spur the creation of a united Europe. The
prospect of economic gain would have to entice individual nations to
integrate more closely. For Germany, that event was the Industrial
Revolution; for Europe, it was the global economic boom of the 1980s and
the 19th century, technological advances in manufacturing processes
made manufacturers radically more productive. New transportation
technologies, particularly the steam engine, enabled nations to become
internally connected through rail and to reach more consumer markets.
The Industrial Revolution began in England and eventually spread to the
Germany remained politically fragmented, unable to join this revolution
or embrace an industrialized economic model. Prior the Industrial
Revolution, political fragmentation was only modestly restrictive; most
of the Continent relied on agriculture, not industry. But the
development of high-productivity manufacturing required large amounts of
unevenly distributed mineral resources and free access to large amounts
of consumers, conditions that put the various fragmented German
mini-states at a serious disadvantage. Products manufactured in Prussia
had to be inspected and taxed as many as a dozen times before reaching
Wallonia, where coal and steel had to undergo the same ordeal in the
opposite direction. This created huge additional costs for German
industries and stunted the development of the German states. The
resultant economic imbalance was one of the many catalysts for the
German revolutions of 1848.
the late 20th century, modern Europe believed it had to remove tariffs
and the restrictions on capital movement if it were to keep up with the
growing economic and political might of the United States and Japan.
These two economic powers dwarfed even the greatest individual European
nations, but as a whole, Europe remained the wealthiest part of the
world. For Europe, like Germany in the 19th century, a free economic
zone was the logical next step.
the behest of Prussia, a small number of German states formalized a
customs union in 1834 that eventually reduced or otherwise abolished
tariffs, created a single labor market and integrated capital markets.
Starting in the 1840s, Germany's first rail links were laid across the
members of the customs union, establishing an increasingly prosperous
domestic market and bolstering Prussia's pre-eminence among German
states. The union continued to expand over the years but always stopped
short of becoming a monetary and banking union.
saw little interest in diluting the strength of its banking sector
before guaranteeing its control over the fiscal and economic policies of
the other members of the customs union. It is at this point that the
unification of Germany and the unification of the European Union begin
19th century Germany, modern Europe pushed the boundaries of the trade
union and has created a European Central Bank that administers the
monetary policy of a steadily increasing number of member states. While
nations were willing to relinquish control of their currency, tempted as
they were by the promise of accumulating even greater wealth, they are
not as willing to surrender sovereignty over their fiscal policy. Many
see no reason to give Brussels control over their military or energy
budgets, for example.
the European Union also lacks an internal leader that is willing and
able to act decisively. From the very beginning, Prussia shaped the
unification of the German nation. It had gained some 500,000 subjects
and 10,000 square kilometers (nearly 4,000 square miles) of land after
the Napoleonic Wars and had the best land army in Europe. Like Prussia,
modern Germany is the wealthiest and most powerful member of its
respective trading bloc, yet it has continuously balked at assuming
leadership of the European Union. In a telling anecdote, when financial
markets were reeling from uncertainty over a string of bailouts,
Poland's foreign minister famously said in 2012 that for the first time
in history his country feared German inaction more than German action.
No 'Blood' or 'Iron'
reluctance to be Europe's leader is perfectly rational for Berlin. In
fact, its reluctance highlights another key difference between
Chancellor Angela Merkel's situation and that of her most illustrious
predecessor, Otto von Bismarck. The original design of a united post-war
Europe was foreign-made. A trade union in Europe served the strategic
interest of the United States. While modern Germany has greatly
benefited from the European Union (more than anyone, in fact) as a trade
union, it is far from certain that a full fiscal and political union is
in Berlin's interest. It is not even clear that it would solve the
great problem in modern Europe: the current economic and social crisis.
wealth of Prussia's customs union was not a means in itself for
Prussia, although it greatly contributed to its strength. Prussia's
national security was at stake. The Napoleonic Wars and the slow but
steady expansion of the Austrian and Russian empires made it very clear
to Prussia that only a political, economic and military union of
German-speaking people would guarantee its security.
calculations are nearly absent from German strategic thinking today.
There are no security threats to the core of the European Union that
could spur Germany into action. Even Russia has understood the lessons
of the Soviet Union and, for now, appears content to focus on
maintaining its own domestic stability while making only modest forays
in Central Europe. Thus there is nothing driving Germany to push for
further integration with the European Union.
question then is whether Germany's imperative to preserve the trade
union, on which much of its economic prosperity depends, will merit a
stronger push from Berlin. The case study of Germany offers yet another
cautionary tale regarding the true costs of the next step to
1862, after being appointed Prussia's minister-president and foreign
minister, Bismarck appeared in front of the parliament and delivered a
historic speech asking lawmakers to approve a massive increase in
Prussian military spending. Bismarck noted that the great problem of
German unification would be solved only by "blood and iron." Bismarck
clearly understood that the alignment of economic interests that had
created the customs union had reached its limit and that the next phase
in the creation of a wealthy and secure European state would have to
turned out to be right, and modern Germany was born on two
battlefields, 800 kilometers and four years apart. In 1866, the Prussian
armies defeated Austria and its German allies at the Battle of
Koniggratz, in the modern-day Czech Republic. The battle settled the
Prussian-Austrian war and firmly excluded Vienna from its position as a
contending head for the German states. It left a union with Prussia as
the sole viable path for German security and prosperity. Bismarck had
thus crushed all internal dissenters to a united Germany under Prussia's
aegis. Notably, he did not forcefully incorporate them into Prussia's
orbit even though he could have easily done so. Instead, he fabricated a
foreign threat from a historical foe, Paris, to bring them into the
July 1870, Berlin coaxed Paris into an offensive action against Prussia
after some creative diplomacy by Bismarck. The memories of the
Napoleonic Wars prompted the last independent German states to rally
under the Hohenzollern banner. Two months later, the superior Prussian
army trounced the French at the Battle of Sedan and captured the French
leader, Napoleon III. In 1871, in the palace of Versailles, Prussian
King Wilhelm I was acclaimed as the kaiser of the new German Reich.
France and Germany find themselves once again at the core of the
European political system. Stratfor has often written that the fate of
the European Union rests on the stability of the Franco-German alliance,
the foundation on which more than six decades of European peace is
based. As the crisis worsened, the differences between the French and
German models have become more pronounced, and tensions have begun to
it is unthinkable to imagine Merkel delivering a "blood and iron"
speech at the European Parliament. However, building nations from
several composite parts necessarily requires redistributing wealth and
power, an approach that runs counter to the sovereignty of the
constituent entities. At some point, nations must be coerced, though
military coercion is by no means the only available option.
is where the analogy between the European Union and 19th century
Germany ends. It is increasingly unlikely that a true fiscal and
political union in Europe can be achieved by aligning the interests of
the constituent nations. However, there does not seem to be any pressure
on Germany to force other nations into a more integrated union.
Europeans hope Germany's September elections will usher in a more
assertive administration and bring about the end of the European crisis.
These people would be well served to look at Germany's history to fully
understand the cost of unification.