Going Its Own Way

Here's the CW. George Bush "went ballistic" over Germany's independent demarche on Iraq, as one White House aide puts it. But has a historic relationship been irreparably harmed? No, say most spinmeisters. Chancellor Gerhard Schroder had an election to win, and it helped to just say no to war. But that was mostly rhetoric, at worst an honest disagreement among friends. Time and diplomacy will heal the rift.

That's one way to see it. Another is that this issue is here to stay. The reason: what's fast becoming the new German Problem--the question of where the Schroder government's defiant path is taking Europe's largest nation, and what it might mean for others. Last week NEWSWEEK offered a review of the economic challenges facing Germany, and how radically the country is departing from the European mainstream in refusing to address them. Similar problems are emerging in its foreign relations. For the first time since World War II, Germany is charting a course that may split it not just from Washington but from the rest of Europe as well.

Schroder calls this the new "German way." He first used the phrase in speaking about the economy. Now it's been extended to foreign policy. On Iraq, Schroder didn't just bash Bush; he also rejected any common European position that did not categorically rule out war, even if mandated by the United Nations. He did not consult any allies in that decision. Nor is he about to back off. After all, 74 percent of Germans are behind him, not to mention many Europeans who disagree with their own governments' pro-Washington policies. "We have no reason to change our policy on Iraq," said one German official last week, even as they sought to downplay frictions.

The image is of ships passing in the night, but with great consequences. Germany has long been one of America's most dependable allies. Not so long ago, it seemed that Berlin might supplant London in a "special relationship" with the United States. There was even talk of a permanent seat on the U.N. Security Council, giving Germany a powerful voice in decisions shaping the globe. Forget all that now. Whatever direction Germany goes in, relations with the United States may never be the same--certainly not while there's a Bush administration.

In Warsaw last week, Defense Secretary Donald Rumsfeld pointedly walked out before a speech by his German counterpart. (He pleaded a "scheduling conflict, no disrespect intended," but it was an eloquent harbinger of future relations.) In Washington, Congressman Tom Lantos declared Schroder "persona non grata on Capitol Hill," adding for the record that he spoke as the ranking Democratic representative on the powerful House Committee on International Relations. And while Secretary of State Colin Powell scrambled to list the ways in which Germany has recently been a helpful friend, from sharing terrorist intelligence to sending troops to Afghanistan, the Texas-bred Bush is not likely to forgive or forget. Apart from his anger at being blindsided, White House insiders say, he feels double-crossed. The president told Schroder that he understood how a war in Iraq would play in the German election, and that he therefore wasn't looking for overt support. But the chancellor's rhetoric (and, worse, his tone) went way beyond the pale, these sources say. It will be a cold day in hell before Bush next takes his call.

European allies are only slightly less riled than Washington. Just two days after his re-election last week, Schroder flew to London for a private dinner with the self-appointed "marriage counselor" in the Atlantic relationship, Tony Blair. But the conversation wasn't just about mending fences with the United States. With his unilateralist bolt from the pack, Schroder made a shambles of Europe's efforts to forge a common policy on Iraq. More, he had repudiated the United Nations, which every other European government considers to be the indispensable instrument for the exercise of global multilateral power. Within the context of Europe's traditional politics of consensus, few leaders quite knew what to make of Schroder's unilateralist campaign creed: "On the essential questions of German politics, the decisions are made in Berlin--and nowhere else." Translated into policy, such a German way could be dangerous, especially if it takes on an anti-American tinge, says one British diplomat: "That would split Europe very badly."

In fact, it already has. French President Jacques Chirac, who's said to personally detest Schroder, clearly took pleasure in the chancellor's troubles with America--just as he did in the earlier prospect that Schroder might lose the election. And when Schroder in September sought his help in saving the insolvent, partly French-owned telecom operator MobilCom, Chirac was happy not to return the call. Aides also say the French president was furious with Schroder at not being consulted over Iraq, but in fact the animosity goes far deeper. Walter Russell Mead of the Council on Foreign Relations in New York predicts a coming Franco-German "war," in which Berlin and Paris compete (rather than collaborate) for leadership of the European Union. Similar resentments have surfaced elsewhere, most notably in Spain and Italy, where conservative presidents are deeply pro-Bush. Says Margarita Mathiopoulos, director of the Potsdam Center for Transatlantic Security and Military Affairs: "Germany hasn't been so isolated since the second world war."

For Europe, Germany's isolation comes at the worst possible time. That has less to do with Iraq or U.S. relations than with Europe's own political agenda. Within the coming months, Brussels faces a slew of weighty decisions--all requiring collaborative German leadership. Along with Europe's other large economies, Germany is about to burst through the deficit-spending limits set by the euro zone's stability pact. Loosening them would favor growth, but at the risk of killing reform and gutting the conservative fiscal policies that hitherto have grounded monetary union. With up to 10 new members awaiting invitations to join, the EU must also negotiate tricky issues ranging from the future of farm subsidies to the conditions of enlargement. At its grandly named Constitutional Convention for the Future of Europe, underway in Brussels, it must figure out how to reapportion votes and vetoes among the various nation states, large and small, in reaching EU decisions--a choice that will determine Germany's influence within the Union. And not least, there will be tough choices concerning international trade and finance. One such: should Europe impose punitive tariffs on $4 billion worth of U.S. products, under the aegis of the WTO's finding that an American tax-credit regimen is illegal?

If it does, predicts Roger Kubarych at Hypovereinsbank in New York, "Congress will force the administration to retaliate." Whether or not Europe and the United States slide into an ugly trade war, he adds, will depend heavily on Berlin. Trouble is, Germany has been on the sidelines on many of these issues. "Under Schroder, Germany has had no clear line to its European policy," complains Daniel Gros, director of the Centre for European Research in Brussels. With Britain still unsure about joining the euro, and France pursuing its own interests when it comes to such matters as subsidies, the European Union faces internal paralysis at a moment that would otherwise demand inspired partnership.

Ironically, this week a reunited and fully sovereign Germany turns 12 years old. That's barely a blink in the eye of history. But it's long enough for Germans, perhaps, to feel their national oats. Long before last week's election, Schroder began speaking of the necessity to free Germany from its sense of collective postwar guilt--to become a "normal" country, with normal national aspirations, expressed in a normal and self-confident manner. His talk of a new German way is its direct expression. "We're only starting to emancipate ourselves from America's protection and our own historical guilt," says Georg Gafron, editor of the Berlin tabloid BZ. Such debate may be needed, and healthy, but it's also unsettling. "We Germans," he says, "have no idea where we're going."

If Germany's friends seek reassurance amid such confusion, it's worth noting that, when it comes to Iraq, Schroder's path is rooted in postwar tradition--anti-militarism. Behind the unpleasant rhetoric, he's posing worthy questions, especially as Europeans see it. Why war? Why regime change? Why now? Standing up to Bush has won him enormous respect, both at home and abroad. It's the right of dissent--even if America doesn't like it. Ultimately, the problem might not lie in what Schroder has done but in the way he's done it. If so, the German Problem may just be part of growing up.