The European integration project started as a project to create a “European Germany” but instead it has produced a “German Europe”. Some believe the rules of the European game had changed for ever with the reunification ofGermanyin 1989. It has taken the euro crisis to spell out the brutal implications.

 

On 28 November 2011 the Polish Foreign Minister, Radoslaw Sikorski, gave a speech inBerlinimploringGermanyto exercise more leadership inEurope. He said: The break up of the eurozone would be a crisis of apocalyptic proportions, going beyond our financial system. Once the logic of “each man for himself” takes hold, can we really trust everyone to act in a communitarian way and resist the temptation to settle scores in other areas such as trade? Would you really bet the house on the proposition that if the eurozone breaks up, the single market, the cornerstone of the European Union, will definitely survive? After all, messy divorces are more frequent than amicable ones.

 

Brave Words from Poland

 

He went on to say: I demand ofGermanythat, for its own sake and for ours, it help the eurozone survive and prosper. Nobody else can do it. I will probably be the first Polish foreign minister in history to say this, but here it is: I fear German power less than I am beginning to fear its inactivity. You have becomeEurope’s indispensable nation. You may not fail to lead: not dominate, but to lead in reform.

 

Anyone with any knowledge of the history ofPolandandGermanyknows that it was a pretty brave thing to say. It sums up with audacity and clarity a bold vision forGermanyto lead and build a shared community calledEuropewhere the total can become larger than the sum of the parts. Sandwiched betweenRussiaandGermany,Polandhas chosen wisely; after all, President Dmitry Medvedev has just threatened to deploy Russian missiles on the European Union’s border.

 

WhilePolandhas embraced moreEuropefor its future, others are taking a more measured view. From a strategic perspective there is the nagging old fear that an ascendantGermanymay be wrecking everything in the process while it finds its well-deserved place under the sun. The new German question asks whether Europe can find a new equilibrium now thatGermanyis so visibly the preponderant power. CanGermanylearn to lead in such aEurope?

 

Germanyhas already been excoriated for failing to lead and standing idly by while the euro burns. But whenGermanyinsists on having a fiscal union as a condition for saving the euro, she is accused of exercising oppressive leadership and forcing a fiscal federalism down the throat ofEurope.Germany, the rest of us have been reminded, has always been too big forEurope.Franceobviously prefers intergovernmental coordination rather than a leap to fiscal federalism; and so doBritainand theUnited States.

 

These countries are attuned toBerlin’s habit of giving higher policy priority to avoiding moral hazard over restoring confidence in financial markets. ForGermany, fiscal austerity has to be agreed first before monetary easing can be sanctioned. And in the end, some compromise betweenBerlinandParisis likely to prevail. IfGermanymoves quickly, the euro may still have a second chance, especially if it is accompanied by decisive intervention in the markets by the European Central Bank.

 

But this strategy fails to offer a sustainable long-term answer on how to deal with the lack of competitiveness and growth in the periphery countries. The economic argument at the heart of all this never really changes.Germany’s fiscal federalism will endure only if it acknowledges that the regime requires symmetrical obligations on creditor and debtor countries to deal with any imbalances. If the system is to endure, austerity on one side has to be balanced by growth on the other.

 

Two Great Empires of the Past

 

If German leadership is to avoid being oppressive, it must recognize that fiscal federalism cannot be a one-sided affair. It cannot expect that all the adjustments must come from the weaker eurozone countries. Any agreement, whether enshrined in treaty or otherwise, that condemns much ofEuropeto indefinite austerity will not survive the realities of national politics.

 

Few would dispute that the survival of the euro now rests with German leadership. There must be more to that leadership, though, than the promise of austerity.Germanyfinds itself at the crossroads of history pondering its future with a mixture of hesitancy and tetchiness.

 

Professor Dani Rodrik of Harvard University has argued in favor of breaking up the eurozone: Economically, the least bad option is to ensure that the inevitable defaults and departures from the eurozone are carried out in as orderly and coordinated a fashion as possible…..What the current crisis demands is an explicit reorientation away from external financial obligations and austerity to domestic preoccupations and aspirations…..The challenge is to develop a new political narrative emphasizing national interests and values without overtones of nativism and xenophobia. If centrist elites do not prove themselves up to the task, those of the far right will gladly fill the vacuum, minus the moderation.

 

How willGermanyrespond in this historical moment? I went back to study history in search of inspiration.

 

Two thousand years ago, up to one-half of mankind lived within two political systems, the Han Empire in eastern Eurasia (206 BC to 220 AD) and the unified Roman Empire in westernEurasia(27 BC to 476 AD). Both empires were broadly comparable in terms of size and population. Both were destabilized but their subsequent histories took very different paths.Chinaremained a single nation despite many episodes of becoming disintegrated and being conquered. Europe remained divided after the fall of theRoman Empireto this very day. And for most of those years the divisions had always been most serious in German tribes.

 

The Decline of Rome

 

Europe according to the eminent historian Patricia Crone was the product of three elements: (1) the culture of Ancient Greece andRome, (2) Christianity, and (3) the culture of the German warriors who invaded theRoman Empire. The fall of theRoman Empireis dated to 476 AD. But only the western half of the empire fell at this time. The Roman Empire had been permanently divided into east and west around 400 AD and the eastern, Greek speaking half survived for 10 more centuries with Constantinople (known earlier asByzantiumand now asIstanbul) as its capital until the year 1453, when it was finally overrun by the Ottoman Turks.

 

The conflict in the western Roman Empire could be seen from the first century AD, when Roman troops crossed the Rhine and advanced into what is nowGermany. The German tribes destroyed these legions. In the third century AD, German tribes began to invade many parts of the empire and formed numerous settlement enclaves. The German tribes had no desire to take over the empire; they were invaders, looters, settlers, but not conquerors. They came in search of a better life in the empire.

 

The empire was unable to defeat or eject them, and had no choice but to let them remain in more or less independent enclaves. Germans that settled within the empire were gradually recruited into the Roman army. When the next wave of German tribes invaded the empire again in the fifth century, there were Germans fighting on both sides. Germans made up half of the Roman army and even some of its generals.

The German tribes accepted the existence of a Roman Emperor until 476 AD, when one German Chieftain decided to get rid of the Roman Emperor and made himself the King of Italy. The new king, however, continued to acknowledge the Roman Emperor of the East as his overlord.

 

The great historian Edward Gibbon concluded it was not barbarians at the gate, but internal decay that had led to the decline and fall of theRoman Empire. The Germans were not really conquerors in the usual sense of the word, but settled down marauders that had inadvertently annexed an empire. The Germans were illiterate and could not manage what they had taken over. They quickly accepted the services of the Roman Catholic Church to govern the territory for them and they were converted to Christianity.Romefell not because the Romans were defeated in one great battle, but because every place in the empire had been invaded and became settled with German tribes.

 

In the seventh and eighth centuries the Islamic Invasion took place and conquered North Africa andSpain. The invasion was stopped by Charles Martel, leader of the Franks, a Germanic tribe, and grandfather of Charlemagne.Europesurvived to remain Christian. When the Pope was threatened by the Lombards (another German tribe that invaded modern dayHungaryand later settled in northItaly), he sent for Charlemagne’s father Pepin, who marched south and duly subdued them. In 800 AD, when Charlemagne visited Rome the Pope crowned him Emperor of the Holy Roman Empire and made him the military protector of the Papal States.

 

Rivalries of Popes and Emperors

 

The kingdom of the Franks was the only German tribe that was able to produce a long lasting state that at its peak covered modern dayFrance, part ofSpain, northItaly, and part ofGermany. Still it was a very weak state compared to theRoman Empire. The king was unable to collect taxes to support an army. He had to rely on appointed dukes and counts throughout his realm to keep local lords in order and to ensure their allegiance. After the death of Charlemagne the empire fell into three parts. The western part eventually became modern-dayFrancebut they were not descendants of the Franks. The Eastern part became the basis ofGermany.

 

Fighting continued and the Pope had to appoint whatever local prince he could find and crown him as emperor. Whoever became the king ofGermanywas crowned by the Pope as Emperor of theHoly Roman Empire. The Germans ran a mixed system of inheritance and election to ensure that a good warrior was chosen to be king. The German kings were the only kings inEuropewho were elected. Elsewhere, inFrance,SpainandEngland, a system of inheritance emerged and took hold; and their kingdoms became better consolidated.

 

Rivalry between Emperor and Pope never ended and their shifting alliances with local princes and the emerging towns was a constant feature of political life in theHoly Roman Empire. The Reformation took root and flourished inGermanybecause secular power was dispersed. It was the duty of the emperor to put down Martin Luther’s heresy. But the emperor’s order was frustrated by Frederic the Elector of Saxon and other German princes who protected Luther. They saw this as an opportunity to put themselves in charge of the church and its lands.

 

Germans, for the most part, became a loose and disunited people when theHoly Roman Empirewas shattered into a patchwork of states following the end of the devastating Thirty Year’s War (1618–1648) with the Peace of Westphalia. Initially the war was fought largely as a religious conflict between Protestants and Catholics. Gradually, the war developed into a more general conflict involving most of the European powers.

 

TheHoly Roman Empirewas ended in 1806 by Napoleon Bonaparte whose victorious armies ended the First German Reich, which had survived for a thousand years. To its credit it also successfully prevented the advances of the Ottoman Turks into Europe after the fall of theEastern Roman Empirein 1453.  It was therefore pivotal in keeping Europe Christian.

 

Protestant Prussia and Catholic Austria became the two most powerful states in theHoly Roman Empire. The nineteenth century was the age of ideology, not religion, and nationalism gained ascendancy, undercutting both liberalism and socialism in the areas of the formerHoly Roman Empire. Otto von Bismarck who became Chancellor of Prussia embarked on the German unification project to forge with blood and iron the Second Reich through two limited wars.

 

The Austro-Prussian War of 1866, between the German Confederation under the leadership of the Austrian Empire and its German allies on one side andPrussiawith its German allies andItalyon the other, resulted inAustria’s defeat and the unification of all northern German states under the Prussian-dominated North German Confederation, which excludedAustria. The war also resulted in the Italian annexation of the AustrianprovinceofVenetiaand contributed to the subsequent unification ofItaly.

 

The Franco-Prussian War of 1870 was a conflict betweenFranceandPrussiaand it drove the South German states into the arms ofPrussia, which was aided by the North German Confederation. Following a prolonged siege,Parisfell on 28 January 1871. The complete Prussian and German victory brought about the final unification ofGermanyas a nation-state under King Wilhelm I of Prussia of the German Empire.

In the first half of the twentieth century two World Wars were fought in battlefields ofEurope. The Second World War started by Hitler’s Third Reich embraced the historically un-German objective of conquering the rest ofEurope. It ended in the defeat and division ofGermanyinto western and eastern parts that were only reunited after the fall of the Berlin Wall in 1989.

 

Deconstructing the Holy Roman Empire

 

The history of the Second Reich and Third Reich cannot be a guide for how the events of today can be handled other than as negative examples of what to avoid. Rather, the experience of theHoly Roman Empirethat survived for a thousand years offers three important lessons.

 

First, the kings ofGermanywere mostly elected from and among the members of the royal houses. This ensured that the Emperor was never strong enough to force powerful local lords into submission, but had to engage in a constant give and take with shifting alliances. This may have provided the best institutional environment for capitalism to make a breakthrough.

 

Second, the Pope conferred legitimacy by appointing the German king as emperor. Today the people ofEuropehave to play this legitimizing role. For this to succeed, it is important that the faceless men and women inBrusselsshed their bureaucratic aloofness and elitist arrogance to help the European cause regain momentum.

 

Third, although the emperor might have been weak, the empire survived successive Islamic and other invasions and keptEuropesafe. TheHoly Roman Empirewas very different from the nationalist statist conception of the Second Reich and Third Reich.

 

The French Enlightenment philosopher Voltaire mocked the Holy Roman Empire as neither holy, nor Roman, nor an Empire. Yet its survival is somewhat magical, carrying a name and an idea that embodied all three core elements that define Europe. Its belief system was Christian, it laws were Roman, and it was an empire in a non-oppressive Germanic way.

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