Germany

Gerard Baker has written the cover piece for this week’s magazine and it’s a must read. In it, he explains why ‘closer fiscal union’, as Rompuy terms it, is not to Germany’s advantage: ‘Any attempted fiscal union might well yield to Germany the biggest single vote in how much to raise in taxes and how to spend it. But it could still be outvoted by an alliance of smaller countries. Such a set-up would become an institutionalised mechanism by which German taxes will be siphoned off permanently to weaker European states. The nightmare for Germans is that an unholy alliance of Spanish, Greeks, Italians and Portuguese will be able to

Defence Secretary Liam Fox is used to looking across the Atlantic for military inspiration and across the English Channel to France for the future of defence cooperation. But he might do well to look somewhere else – namely to Germany where the young defence minister, Karl-Theodor zu Guttenberg, has launched one of the Cabinet’s most ambitious cost-cutting programmes. He is planning to cut the number of active-duty soldiers from 250,000 to 150,000 as part of a an effort to find  €1bn (£840m) worth of cuts as part of the government’s €80 billion austerity programme. He is even contemplating an end to compulsory military service — something normally seen as a

Angela Merkel’s fall from favour is something David Cameron ought to bear in mind as he looks for lessons to guide his term in office. The German chancellor could do no wrong when she was first elected. A new “Iron Lady”, she was seen as a giant among pygmees. Tony Blair was leaving the scene, Nicolas Sarkozy had yet to be elected, the newspapers swooned, the voters applauded. Mrs Merkel was respected in the US and Europe. She made her unwieldy coalition with the Social Democrats work, almost singlehandedly picked the NATO secretary-general and ruled over EU meetings. Now, EU commission president Jose Manuel Barrosso is (rightly) calling her “naïve”

A Conservative Party article of faith has been the belief that other Europeans are innately more pro-EU than the British. In the past, this has undoubtedly been the case. Poll after poll has shown that Britons see the EU differently than most other Europeans. But as I have argued before, times are changing on the continent. In an article in the Frankfurter Allgemeine Zeitung (not a Europhile newspaper by any stretch), Germany’s new politics is explained. Nikolas Busse argues that the Greek crisis and failure of EU leaders to cobble together a plausible bail-out is the first major manifestation of Germany’s new role in Europe – that of a country

If there is a strategic thought lurking inside the Tories’ grab bag of foreign policy ideas, it seems to be closer cooperation with France, particularly on defence matters. Should William Hague become Foreign Secretary after the election, he might end up working with a new French counterpart, as rumours persist about Bernard Kouchner’s imminent departure (knowing this, he apparently even floated his own name for the Kabul UN job). A new Parisian counterpart for Hague – for example, the current French Agriculture Minister, Bruno Le Marie – could make a new Entente Cordiale easier. But, even then, would the French be up for closer links with the UK? Angela Merkel

Is Greece too big to fail? When the Eurozone project was up and running, its taxpayers were promised: this was not a system where they’d have to bail out a badly-run country like Greece or Italy (or Brown’s Britain, were we members). But this rule (a clause in the Lisbon Treaty) is being torn up with various assurances from Germany and the ECB that they Greece is too big to fail – and they’d rather put their taxpayers’ wonga on the table than risk their precious promise. I made this point in my News of the World column yesterday (that bit not online). Here’s the story: 1. The Eurozone did