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U.S.-German relationship on the rocks

By Ian Bremmer and and Mark Leonard,October 18, 2012

It should be a marriage made in heaven. Barack Obama and Angela Merkel are quiet, pragmatic politicians less interested in grand gestures than in results. Merkel gives Washington someone to call when Europe is in crisis. Obama gives Europe the longed-for U.S. leader willing to invest in multilateralism and multinational institutions.

So why does a widening divide between Berlin and Washington threaten the entire Western alliance?

A fundamental shift in interests and outlook is leaving the United States and Germany with potentially irreconcilable differences.

U.S. grand strategy relies not just on diplomats, soldiers and sailors but also on trade negotiators. But economic initiatives serve geopolitical goals. Promotion of the Trans-Pacific Partnership, a promising multinational trade deal, is as much about establishing a counter to rising China as is the shift of more U.S. warships into Asian waters.

German officials, on the other hand, are focused ever more narrowly on economic stability and sustainability. Before the euro zone descended into crisis, Germany appeared to be becoming a “normal” Western power, interested in extending its political influence and willing to commit troops to defend its liberal values and security in Kosovo and Afghanistan. More recently, however, Germany has become less multilateral, at least on security questions, and less willing to transfer sovereignty to supranational institutions such as the European Union or to take part in international missions. The result is a strange mix of economic assertiveness and military abstinence. Germany has become a geo-economic power, using commerce to extend its influence and advance its interests.

And U.S. geopolitical ambitions and Germany’s geo-economic agenda are clashing. Eighteen months ago, Germany infuriated the White House by joining Brazil, India, Russia and China in abstaining on the U.N. Security Council proposal to create a no-fly zone over Libya. The decision provoked speculation that Germany wanted to shed its supporting role in the U.S.-led Western alliance in favor of the more independent, non-aligned and mercantilist-driven positions taken by leading emerging powers.

But the real rift had begun to open six months earlier, during the Group of 20 summit in South Korea. President Obama, who had spent weeks trying to rally developing countries behind the idea of global rebalancing, was taken by surprise when the German chancellor made common cause with China and other export nations to oppose this stance. The German abstention on Libya made no difference to U.S. plans, but at the G-20, Berlin and Washington stood on opposite sides of the most fundamental questions facing world leaders: How can governments rebalance the world’s trade relations, and should they stimulate demand or impose austerity?

Unfortunately, there is little Obama can do to win the Germans back. Washington can bolster the loyalty of other allies with offers of political access, military hardware and intelligence. The commerce-minded Germans are not interested in these. U.S. officials gripe that Merkel will not listen to the president’s advice for managing the euro-zone crisis. German officials say that the world’s second-largest creditor has little to learn from its leading debtor.

Meanwhile, Berlin and Beijing, a match made in mercantilist heaven, are turning heads. On her recent trip to China, Merkel notably did not allow fundamental differences in political values to complicate a budding “special relationship” between the countries.

In the coming months, the United States and Germany are likely to become further estranged. Differences over how to refloat the global economy will become more obvious. U.S. officials may lecture their European counterparts on the need for sharing military burdens. Europeans are likely to insist that the demands of austerity do not allow them to spend more on militaries while cutting everywhere else.

In the medium term, economic realities will limit U.S. geopolitical ambitions. It will take time for Washington to get what it wants from negotiations for the Trans-Pacific Partnership, and it’s not clear how Washington will respond if Beijing tries to force neighbors to choose between expanded security partnerships with the United States and deepening trade and investment ties with China.

Germany’s focus on trade power is also likely to encounter head winds. Berlin’s lack of geopolitical influence will seem much more important if German demands for extended austerity in Europe feed anti-German fury and if closer relations with Beijing force German officials to ignore Chinese abuses of state power. Merkel’s government could find itself short on influential foreign friends.

But the biggest challenge posed by the U.S.-German estrangement extends to the foundation of a liberal world order. Since the Cold War ended, the United States and Europe have advanced the principle that democracy, not single-party rule, is key to political stability and that market-driven capitalism, not state-directed development, is crucial for lasting prosperity. If the United States becomes less willing or able to advance these values abroad, and if Germany, Europe’s engine, allies with fellow creditors over fellow democracies, who will be left to advance the principles that have politically and economically empowered hundreds of millions of people since the wall fell?