Rot at Europe's Core : The European Union Faces a New Challenge for the Coming Decade-How to Manage a Weak Germany, Adrift and Lacking Leadership

Article excerpt

Gerhard Schroder is feeling besieged. Every day he's trashed in the German media. At press conferences, he irritably lashes out at critics. His poll numbers are abominable--32 percent and sinking. Abroad, he's robbed Germany of nearly all clout with his count-me-out stance on Iraq and his near-total absorption with domestic crises. No one even tries to understand his policies. One week he raises taxes by 23 billion, soon afterward his chancellery "leaks" a paper calling for the exact opposite. As if he had nothing more important to do, he's suing two tiny regional newspapers for claiming his marriage is on the rocks. Woe betide them had they suggested he dyes his hair.

Few Germans can imagine this mess dragging on for the three and a half years left in his term. But it's their neighbors who are really getting concerned. Germany's troubles come at an inopportune moment for Europe. The global slowdown threatens its export-dependent economies. Its leaders are divided over everything from Iraq to the future shape of their newly enlarged Union. How to apportion power and decision making among so many members? Should there be a strong European president? Is inflation or deflation the greatest economic threat? With a stricken giant at its middle, Europe's answers to these problems will be very different than just a few years ago. What's more, its leaders now face another perplexing question--how will Europe manage a weak Germany and its aimless chancellor?

The consequences of Germany's weakness are only just dawning on Europe. For starters, consider its ultimate vision of itself as a United States of Europe. German Foreign Minister Joschka Fischer flew to Brussels last week to reiterate Berlin's demand for a strong central authority to lead the EU. He was promptly rebuffed by Britain's Deputy Foreign Minister Denis MacShane, who ridiculed the proposal as calling for a "kaiser" to rule over Europe. Neither France nor Britain wants to transfer more power to Brussels; each prefers to negotiate European policies individually, among national governments. For years Germany has carried the torch for a federal Europe-- and by virtue of its sheer size and economic strength, it has largely prevailed. But can it continue to do so now that yesterday's European "locomotive" has become its caboose? "Germany's weakness means the chances for the old model of ever-closer union are rapidly deteriorating," says Holger Schmieding, chief European economist for the Bank of America in London. The prospect, he says, is a Europe that increasingly closely resembles "a glorified free-trade area."

That's likely to also doom what's called, in Eurospeak, the Common Foreign and Security Policy. For decades, European leaders have dreamed of speaking with a single voice. Their cacophony of conflicting opinions has hampered Europe's ability to stand up to the United States in times of crisis. Iraq is but the latest case in point. For many Europeans, it's bad enough that Prime Minister Tony Blair aligned Britain with George Bush so unequivocally. But when Schroder unilaterally ruled out Germany's involvement in a war--under any circumstances--he sacrificed European foreign policy to his own domestic interests. Once again, Europe's voice is fractured and weak.

France now speaks for Europe, more than does Germany. …