Europe’s Worst Double Talkers

Germany has long painted itself as the good European. Since the birth of the European Union as a steel-and-coal alliance more than half a century ago, Berlin has fought as hard as anyone for a single European marketplace, eastward expansion and, most recently, for Europe to become a leader in the battle against climate change. Yet under Chancellor Angela Merkel, Germany's rhetoric is failing to stand up to the reality of its policy. She portrays herself as a defender of European integration and the environment by fighting for a new Pan-European treaty and a tough environmental agenda. But German policymakers in Berlin and Brussels are taking a different tack altogether.

Why is this? In part it is because political leaders at least as far back as Helmut Kohl, chancellor between 1982 and 1998, know that talking a good game about Brussels is a politically savvy move and evidence of good will. But they also understand that Germany is a global powerhouse in its own right—the world's largest exporter of goods—with little need or desire for the kind of bureaucracy Brussels imposes on its enormous industrial and manufacturing sectors. German industry also enjoys a degree of closeness to the government that is extraordinary even by continental standards, and actively lobbies against many Brussels initiatives. Gordon Brown's cabinet in Britain is made up mainly of policy wonks and lawyers, with little corporate connection. French politicians defend their national champions—and sometimes end up working for them—but mainly because so many of them are still owned by the state. In Germany, conservatives and socialists alike have battled against transparency rules that would reveal where parliamentarians get their income, suggesting a deep link between the private and public sectors and a great big revolving door between the two.

For instance, former Economy minister Wolfgang Clement is now chairman of the energy company RWE. Another former Economy minister, Werner Müller, became chief executive of the major German power company RAG. Matthias Wissmann, a former Transport minister, is now president of Germany's car lobby, the German Association of the Automotive Industry. In perhaps the most striking recent case of the revolving door, the then Chancellor Gerhard Schröder signed a multibillion-euro pipeline deal with Russia just 10 days before Germany's 2005 elections. He lost, and almost immediately took a position as the head of the pipeline consortium's supervisory committee. Meantime, executives from Germany's enormous auto industry, with annual sales of €226 billion, openly acknowledge they have direct access to some of the highest officials in Berlin. Indeed many refer to cars as the glue that binds German socialists and conservatives into a virtually impenetrable force. "In Germany, unlike in other countries, the German government defends German private companies, rather than the common interest," says Claude Turmes, a member of the European Parliament from Luxembourg.

The result is a sharp divide between Berlin's rhetoric and policymaking, both in Berlin and in Brussels. This divide is most evident in political leaders' stance on the environment. Merkel has long made "green" a major part of her agenda, a smart move in a country that is home to one of Europe's most impassioned green movements. Few in Brussels or elsewhere doubt her personal sincerity in her battle against climate change. Last year, when Germany held the rotating leadership posts at both the G8 and the EU, she made climate and energy the centerpiece of her tenure. It is thanks to Merkel that Europe is now negotiating rules to slash auto emissions, cut EU greenhouse-gas emissions by at least a fifth by 2020 and boost renewable energy and biofuels. Germany is also extremely active in pushing for renewable energy sources, which now account for 14 percent of its energy mix.

Yet many question Merkel's willingness or ability to move her professed goals forward in a way that hurts German industry. Last year Brussels watered down a plan to force the auto industry to cut carbon-dioxide emissions, to the enormous benefit of companies that make relatively big and fuel-inefficient cars—like Germany's BMW and Porsche. Last December, as she talked about the value of cutting emissions, Merkel condemned even these new goals, arguing the European Commission was making "industrial policy at the expense of Germany and German carmakers." In March, she led the push for the European Commission to draw up a list of energy-guzzling industrial sectors that would be exempt from a new European carbon-trading system if there is no equivalent global deal. German industries' experience, says Regine Günther, head of the WWF-Germany's climate-change program, is that "with their power they can steer policy, and that they will continue to do so."

The difference between talk and action goes far beyond the environment. Merkel advocates for technological innovation, yet promised as she formed her government to protect the partially state-owned company Deutsche Telekom from an EU law that would have allowed rivals onto its broadband network, thereby increasing competition and lowering costs. Last June, Brussels hauled Germany to court on the ground that it was violating EU competition rules. The case is pending, but German broadband penetration remains lower than that of the United States, Great Britain, the Netherlands and five other EU members. It is a similar story on energy security. EU nations are struggling to cope with high oil prices and member nations' dependence on imports from mercurial suppliers like Russia. Merkel has publicly urged business to look for alternative fuels, and has repeatedly reassured the EU she will not continue the close relationship with Russia fostered by her predecessor, Schröder. Yet Merkel was the first EU leader to head to Moscow to congratulate Dmitry Medvedev for his victory in the dubious March presidential election.