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to the party.

3. The Changing Nature of European Relations

The unification of the two Germanies had several immediate effects on the landscape of relations within Europe and the broader international arena. In summary, these include: -

A) German economic buoyancy remains central to both social stability and confidence in German foreign policy. It was only by early 1995 that the German economy showed some recovery from this trillion dollar programme, but high unemployment (10.8-12% overall for 1996, 15% in Berlin; Soh 1996b) and signs of a recession in the economy had forced the Kohl government to begin considering serious cuts to welfare and working benefits, a move which has seriously alarmed German trade unions (see Seeleib-Kaiser 2002). Trade unions generally worked in a cooperative fashion with business and government to ensure a very competitive work-force (the principle of co-determination with a 'social market' economy). However, Germany within the EU remains committed to budget restraint. The Kohl government then targeted serious cuts that would seriously reduce the public level of involvement in the economy, aiming to go from approx. 46% to 40% of GDP (Straits Times 1996). This was the end of the welfare state as it had been practised in Germany (Soh 1996b; see further Seeleib-Kaiser 2002). It this context, the German government was unable to meet its goal of halving unemployment. There was some decline in joblessness in April 1998, but at 11.4% unemployment remained a major national problem in the late 1990s (Norman 1998). This and other factors helped lead to the electoral defeat of the Kohl government in September 1998 (see below). As of May 2000 unemployment was at 9.8%, a reduction from earlier years but still a serious problem. Unemployment as of 2001 was 10.4, and was projected at 10.2% for 2004 (DFAT 2004), once again resulting in social pressures on government policy. Generally, under the European Union Stability Pact, Germany is supposed to restrain deficit spending, and issue that may be important as the German government moves to cut income tax through 2003-2005. Indeed, in recent years both Germany and France have had problems meeting these economic restraints as suggested by the Stability Pact, leading to concerns that they were not ‘models of EU good citizenship’ (Strategic Comments 2004; for further critical comments see Meyer 2004). The factors led through March 2004 of a call by Germany, France and the UK for greater innovation in the European economy to find ways to find employment for Europe’s 93 million ‘economically inactive’ (Strategic Comments 2004).

B) A long term increase in German power - with approx 17 million East Germans added to the West, Germany emerged with a strengthened place in European affairs (Germany now has a population of 82 million). One future question which has been broached by the German government is whether Germany should receive a permanent place on the UN Security Council - at first there are still some legal impediments to Germany fulfilling military obligations which might accompany such a role (Schlor 1993, pp57-8). These impediments have been slowly eroded, and by late 1994 open discussion of the possibility of a more active role for Germany in the UN and NATO was possible. This resulted in a more active profile for Germany both in relation to the crises in Bosnia and Kosovo through 1997-1999, with Germany committing several thousand troops to stabilisation forces in both areas. In general terms, however, Germany has moved from the old image of a civil power (using money and social programs to support its diplomacy) to a more active role in NATO, the UN, and the emerging European Security and Defence Identity. However, in large measure German policy sees this in the context of 'soft power' (Thompson 2001). On this basis, it may to unwise to view Germany foreign policy as a

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