Mark Mazower | New Europe’s old ghosts4 min read . Updated: 01 Jan 2015, 12:17 AM IST
Euro zone faces the prospect of a Japan-style era of stagnation, and chronic high unemployment on its southern fringe
The past stalked Europe in 2014. When the year started, the centennial of the Great War’s outbreak attracted much commemorative energy. But, as it progressed, disturbing parallels appeared—not to 1914, but to some of the nastier features of the interwar years.
From Scotland and Catalonia to the borders of Ukraine, the politics of nationality flared, while Europe’s economy stagnated—hostage to a German inflation phobia that dates back to 1923. And, as the year unfolded, a new geopolitical tug of war between the continent’s two early-20th century giants, Germany and Russia, became apparent, while Europe’s amnesiac political elite seemed to be fumbling on one front after another.
To anyone who recalls Danzig and the Sudetenland—the endless nationality claims and counter-claims that triggered World War II in the borderlands of Eastern Europe—Russian President Vladimir Putin’s revanchism in eastern Ukraine’s Donbas region in 2014 has a disturbingly familiar ring to it. His rhetoric of humiliation and encirclement, the instrumental talk of minority rights, and the Kremlin’s use of local proxies, with all of the uncertainties that accompany reliance on such actors—all of this was reminiscent of nothing so much as interwar Germany’s own irredentist policies.
The politics of nationality is not confined to Eastern Europe. Scotland’s independence referendum in September threatened to split the UK. The same month, up to two million pro-independence Catalans marched through Barcelona, in what may have been the largest demonstration ever seen in Europe. Ask most Catalans what independence will bring, aside from freedom from Spain, and you won’t get much of an answer: resentment at past wrongs overshadows any serious calculations about the future.
But perhaps the purest reversion to interwar nationalist ideology is occurring just beyond Europe’s borders—in Israel, of all places. There, Prime Minister Binyamin Netanyahu’s government has proposed a law enshrining the collective primacy of the country’s Jews—legislation that destroys in spirit and form what little is left of Israel’s founding commitment to equality under the law. Could there be any sadder demonstration of the cunning of history?
Europe’s past was equally present in the realm of economics in 2014. Thanks to the European Union’s (EU) austerity policies, the euro zone faces the prospect of a Japan-style era of stagnation, and chronic high unemployment on its southern fringe.
The irony is that Germany’s anxieties about price stability, which underlie the EU’s embrace of austerity, are entirely misplaced: German inflation could scarcely be lower. With German unemployment, too, hitting record lows, while joblessness hits record highs in Italy and remains at obscene levels in Greece and Spain, what has emerged is a two-tier Europe, with German chancellor Angela Merkel’s government calling the shots.
For now, the periphery countries calculate that the eventual benefits to be gained from remaining within the euro zone will outweigh the current pain of austerity. For its part, Germany exacts austerity as the price of its participation in the single currency. It is on this uneasy basis that its hegemony in Europe rests.
Though depoliticization and apathy have held back serious challenges to German dominance, such challenges are emerging. German policymakers have discounted the rise of extremism in relatively small countries such as Hungary and Greece. But one wonders how they might respond to spectacular results for Marine Le Pen’s National Front in next year’s French regional elections or in the presidential election in 2017.
And of course the big mystery is Germany itself, seemingly lifted from history by its own economic buoyancy. Can German politicians abandon Weimar-style economics before they are hit by Weimar-style political disintegration? And even if they manage this eventually, will Germany have lost much of Europe in the meantime?
This brings us to the nascent but unmistakable signs of a Russo-German rift. If Franco-German rivalry shaped the era between 1870 and 1920, it was the conflict with Russia that defined the next 70 years. That conflict was forgotten for two decades after the end of the Cold War, because Russia’s internal travails and Germany’s desire to demonstrate its post-unification harmlessness kept both powers from flexing their muscles.
Now that Putin has made muscle-flexing his main form of diplomacy—not merely in Ukraine and the Baltic states, but also in the Balkans and the North Sea—it has fallen to Germany to shape Europe’s response. The motive today is not to defend ethnic Germans abroad—their expulsion in the millions in the 1940s ended that particular concern—so much as the more laudable desire to preserve the values of a democratic EU against the new authoritarianism from the East.
Whether Germany can continue to perform this role, however, will depend on what kind of EU emerges over the next few years. In particular, if Europe is to succeed with Germany at the helm, Germans and everyone else will have to break more decisively with the past than they have managed to do so far. ©2015/Project Syndicate