We use cookies to help improve and maintain our site. More information.
close

April 11, 2017

What to expect, and not expect from Schulz

It has been our experience that the only thing capable matching the promise of a German Social Democrat in opposition is the disappointment of a Social Democrat in government. We got a glimpse of a future chancellor Schulz yesterday at his first press conference with foreign journalists who noted with horror that Schulz is still committed to the stability and growth pact. How could this be otherwise, since Germany has an even stronger constitutional commitment to a balance budget over the economic cycle - a rule change that was proposed by an SPD finance minister? 

What struck us as interesting is that Schulz now sees eurobonds as irrelevant because of the ESM. That is mildly surprising, given his strong support for eurobonds in the past. And it misses the point of why eurobonds are necessary for the stability of the eurozone in the long run. We were also interested to hear about his denial of the 2% Nato defence spending commitment.  He said Germany would have to grow its defence budget €20bn or more each year for the next few years, which was too big a financial burden. We haven’t heard a "can’t pay, won't pay" line out of Germany for a while. We are looking forward to the moment when chancellor Schulz explains his deep thinking on this issue to Donald Trump.

Show Comments Write a Comment

April 11, 2017

The view from Berlin

There is nothing particularly bad about the insights gained by Alberto Nardelli and colleagues from a recent visit to Berlin, producing a snapshot of the thinking of German officialdom. Government officials, think-tankers, and economists are outraged about Brexit - now perhaps more than last summer - because they are finally comprehending that Brexit is actually happening. The truth is that the don’t understood the UK very well, just as they didn't understand why the Americans elected Donald Trump. You can bet that German policy towards the US will not reflect the anti-Trump noise in the cafés and chancelleries of Berlin. And the same will be true of Brexit. 

First of all, we would recommend that readers don’t buy into the idea that there is such a thing as a single view from Berlin. The city holds conflicting views on any one subject. Angela Merkel has a working position - which is to say nothing for now, and to let events unfold. We haven't really advanced from this position a lot.

The fundamental point to note is that Brexit is not a number one, two, or even three, priority issue for any British interlocutor in Berlin. This is an election year in Germany, the first since 2002 where the outcome is not clear from the outset. Trump is shifting the geopolitical agenda. Shadows of a eurozone crisis are rising. And people are genuinely more worried about France, a country they understand better, than the UK. 

So when Nardelli writes that "this is how Germany sees Brexit", he is wrong. This is rather what they want him to write. But the German negotiating position, within the European Council, will be driven by German political and economic interests, and these will be informed by more detailed considerations nearer the time of actual decisions. The German government will ask itself whether it is in the country’s interest to isolate a country that will still be a member of Nato, G7, the G20, and the UN Security Council. The EU and the UK can ill afford to lose each other's support in this day and age.

The economic interdependence is even stronger. None of these interviewees have even begun to consider the implications of a hard Brexit at a time when Trump is threatening bilateral trade action against Germany. If you think about Germany’s vulnerabilities, ask yourself whether Germany wants to be subjected to tariffs from two of its three largest trading partners.

Show Comments Write a Comment

April 11, 2017

The view from Moscow

While there is no such thing as a view from Berlin about Brexit, we are more ready to believe Dmitry Tremin’s account of the view from Moscow over the US air strikes in Syria. This is normally outside our narrow reservation, but we take note of this discussion as the EU is caught in the cross-currents of US-Russia diplomacy. Trenin describes Moscow’s reaction as strong but measured. The Russian interpretation is that Trump’s strike against Bashar al-Assad was motivated by domestic considerations.

The risk of a confrontation between the US and Russia has clearly increased, now that both are militarily engaged in Syria, but Trenin says that greater US involvement may have a paradoxical outcome - it might ultimately improve the chances of a political settlement because it strengthens Vladimir Putin's influence over Assad. 

Much will depend on the next steps of US policy. If Trump continues to engage more actively in Syria from now on, Russia may face the choice of a humiliating defeat or a conflict with the US. This would be a dangerous moment. But we are not there yet.

Show Comments Write a Comment

This is the public section of the Eurointelligence Professional Briefing, which focuses on the geopolitical aspects of our news coverage. It appears daily at 2pm CET. The full briefing, which appears at 9am CET, is only available to subscribers. Please click here for a free trial, and here for the Eurointelligence home page.

 

Recent News

  • October 17, 2017
  • Catalan separatism has its martyrs
  • European Parliament agrees to restrict posted workers
  • Foreign policy will be key in Austrian coalition talks
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • October 02, 2017
  • Catalonia recalls EU and eurozone instability
  • French trade unions increase pressure over labour reforms
  • Watch out for a political accident in the UK
  • Municipal elections boost Portugal's Socialists
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • September 18, 2017
  • Why Germany cannot lead Europe, let alone the free world
  • Will Macron help to build up Mélenchon?
  • Boris' Coup
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • August 31, 2017
  • Where are the Républicains?
  • Poland unmoved by EU rule-of-law sanctions
  • May will stay through Brexit, and then fight the 2022 elections
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • August 21, 2017
  • Soft, getting softer
  • Tsipras' chances of a boost
  • On the fallacy of a middle-ground option for the eurozone
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • July 27, 2017
  • Löfven's move
  • The nearing end of petrol and diesel engines
  • Why a second referendum in the UK won’t happen, and why it would be wrong
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • September 25, 2018
  • Be careful what you wish for - second referendum edition
  • July 10, 2017
  • EU in self-destruction mode
  • The EU's fault lines
  • Fake News and Fake views
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • August 20, 2018
  • ... and a subtle shift in EU policies towards both Russia and Turkey
  • Nothing to celebrate about the end of the bailout programme
  • Support for Brexit holding up
  • June 20, 2017
  • How to soften Brexit?
  • The deep roots of Brexit: Thatcher and the Germans
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • July 09, 2018
  • German panic about Target2
  • AfD level with SPD
  • How the EU could fail
  • May 31, 2017
  • Getting real in the debate on the euro's future
  • Russia's growing influence in Italy
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • May 28, 2018
  • A no-confidence motion that could backfire
  • The political repercussions of a historic referendum in Ireland
  • Why the lack of an international role for the euro matters
  • May 10, 2017
  • PSOE primary campaign in full swing
  • Czech government crisis escalates
  • Backroom dealing on electoral reform in Italy
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • April 13, 2018
  • German support for eurozone reform next to zero...
  • ... and no support for France on Syria either
  • A French sermon
  • Why the euro endures
  • April 19, 2017
  • Shadows of money
  • Breppe Grillo vs Eurointelligence
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • February 26, 2018
  • Angela Merkel's cabinet
  • March 27, 2017
  • Governing formation troubles - Northern Ireland edition
  • Did Trump present Merkel with a bill for Nato?
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • January 08, 2018
  • Getting real on Brexit
  • Macron in China
  • March 01, 2017
  • The threat of Frexit
  • Fear and loathing of a referendum in Spain
  • How to get around Theresa May’s little ECJ issue
  • Solve the problem
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • August 28, 2018
  • Urban politics and national crisis - the Irish case
  • How anti-semitism became one of the main issues in British politics
  • November 13, 2017
  • A pro-European list: Wauquiez' nightmare
  • Catalan separatism isn't going away
  • Why oh why does Germany behave the way it does?
  • Why the four freedoms matter
  • February 02, 2017
  • Will it come to the use of force in Catalonia?
  • The day Brexit became irreversible
  • Can Trump and May succeed?
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • June 01, 2018
  • Will France and Germany stick together in their response to US trade tariffs?
  • From a eurozone budget to a slush fund
  • September 18, 2017
  • Why Germany cannot lead Europe, let alone the free world
  • Will Macron help to build up Mélenchon?
  • Boris' Coup
  • January 05, 2017
  • French Socialist primaries - old wine in new bottles
  • Le Pen's hard ecu
  • Will Tusk get a second mandate?
  • Themes of 2017
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • September 27, 2018
  • Two ways out of the Brexit impasse
  • February 16, 2018
  • How big will the euro budget be?
  • July 10, 2017
  • EU in self-destruction mode
  • The EU's fault lines
  • Fake News and Fake views
  • November 30, 2016
  • Is Russia behind a massive cyber attack in Germany?
  • Will Fillon move to the centre?
  • The Dutch left field is getting crowded
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • October 15, 2018
  • Black Brexit smoke
  • Bettel can relax and stay in office
  • Solving the crime vs solving the problem
  • April 16, 2018
  • Italy's and Germany's pained response to the Syria attacks
  • On the end of the eurozone's economic honeymoon
  • Why Bulgaria should stay out of the euro
  • Where shall we meet after Brexit?
  • October 16, 2017
  • What‘s the deep meaning of the elections in Lower Saxony?
  • Can Brexit be revoked?
  • Macron's grand narrative
  • April 19, 2017
  • Shadows of money
  • Breppe Grillo vs Eurointelligence
  • October 20, 2016
  • No games please, we are Europeans
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • October 12, 2018
  • A deal so close, and yet so far
  • AfD leaves Germans speachless and helpless
  • June 04, 2018
  • German discourse out of control
  • Wait for European disunity on US tariffs
  • January 24, 2018
  • AfD europhobe to chair of Bundestag's budget committee
  • Watch out for the Labour Party debate on the single market
  • On the productivity puzzle
  • September 18, 2017
  • Why Germany cannot lead Europe, let alone the free world
  • Will Macron help to build up Mélenchon?
  • Boris' Coup
  • May 12, 2017
  • What to do with Germany’s tax windfall
  • How Macron counts on building a majority
  • Options for the eurozone
  • January 05, 2017
  • French Socialist primaries - old wine in new bottles
  • Le Pen's hard ecu
  • Will Tusk get a second mandate?
  • Themes of 2017
  • August 30, 2016
  • Brexit facts on the ground
  • Burkinis and Republican primaries
  • The SPD and TTIP
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • September 19, 2018
  • Attacks weaken legitimacy of spitzenkandidat model
  • A very German farce
  • August 20, 2018
  • ... and a subtle shift in EU policies towards both Russia and Turkey
  • Nothing to celebrate about the end of the bailout programme
  • Support for Brexit holding up
  • July 09, 2018
  • German panic about Target2
  • AfD level with SPD
  • How the EU could fail
  • June 11, 2018
  • The end of the G7 - good riddance
  • Macron needs allies for his European agenda
  • Who is going to be the next director-general of the Italian treasury?
  • May 14, 2018
  • Catalonia: plus ça change...
  • Conveney says no to Brexit with border infrastructure
  • Why the noble Lords don't really matter
  • April 16, 2018
  • Italy's and Germany's pained response to the Syria attacks
  • On the end of the eurozone's economic honeymoon
  • Why Bulgaria should stay out of the euro
  • Where shall we meet after Brexit?
  • March 19, 2018
  • Waiting for Germany
  • Russia’s friends
  • Can the Commons force an extension of the Art 50 period?
  • February 22, 2018
  • Northern Ireland needs a structured dialogue
  • Something odd about the Italian discourse on Europe
  • January 29, 2018
  • Where is the opposition in France?
  • Scenarios and risks for Syriza over Macedonia
  • January 05, 2018
  • Catalonia's government by Skype
  • The case for EEA membership
  • December 11, 2017
  • A new era for the French right
  • Growing scepticism of a grand coalition
  • November 20, 2017
  • Showdown over Northern Ireland
  • Castaner and his list confirmed
  • Gennimata to lead the new left alliance
  • Brexit‘s ultimate irony
  • October 31, 2017
  • Puigdemont's flight of fancy
  • Hopeless but not serious
  • Serious but not hopeless
  • October 13, 2017
  • Why Austria’s vote matters
  • What a Paris diesel ban would mean for Europe's car industry
  • A Dutch referendum on the Dutch referendum?
  • September 25, 2017
  • Where does this leave eurozone governance reform?
  • Is Mélenchon losing his momentum?
  • Lost in Florence
  • September 06, 2017
  • On the failure of global policy coordination
  • The day Catalonia disobeyed?
  • Waiting for Varadkar
  • August 21, 2017
  • Soft, getting softer
  • Tsipras' chances of a boost
  • On the fallacy of a middle-ground option for the eurozone
  • July 31, 2017
  • Russia sanctions bill becomes US law
  • Spain's Guardia Civil in the eye of the Catalan storm
  • A grand bargain between France and Germany
  • July 17, 2017
  • What Tony Blair's Brexit confusion tells us
  • Schulz advocates compulsory investments
  • Italy’s government has effectively lost its majority
  • July 03, 2017
  • Can Greece exit its programme without a credit line?
  • The softening Brexit
  • Macron's state of the nation address
  • June 20, 2017
  • How to soften Brexit?
  • The deep roots of Brexit: Thatcher and the Germans
  • June 09, 2017
  • How about the Italian elections...
  • ...and the French?
  • May 30, 2017
  • Beer tent politics - Merkel edition
  • Brexit arrives in UK elections
  • Rajoy clears budget hurdle
  • May 18, 2017
  • German hard line on Brexit already cracking
  • Spanish parliament rebukes justice minister
  • Kenny's resignation and the likelihood of new elections
  • Getting real about fiscal union
  • May 11, 2017
  • Germany rejects IMF’s policy recommendations before they are issued
  • Why Labour is losing
  • May 05, 2017
  • Front National - thinking beyond Sunday
  • Tusk attacks Juncker over Brexit diplomacy
  • Extraordinarily ordinary
  • April 28, 2017
  • On the coming Tory landslide
  • How Grillo sees the markets
  • April 23, 2017
  • The demise of the AfD has accelerated dramatically
  • On how France will need to confront Germany
  • April 19, 2017
  • Shadows of money
  • Breppe Grillo vs Eurointelligence
  • April 15, 2017
  • Happy Easter
  • April 12, 2017
  • Macro in a state of denial
  • Where Schulz is vulnerable
  • Schäuble’s three party tricks
  • April 11, 2017
  • What to expect, and not expect from Schulz
  • The view from Berlin
  • The view from Moscow