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THE GIANT STUMBLES
ould you rather be dominated by a weak Germany or a strong Germany?' That is a hard question to answer, rather like 'how would you prefer to be beaten by your husband?' But it is a question which policy-makers in Britain, and in other EEC countries, need to consider very carefully. The only sensible answer — 'Neither' belongs, since Maastricht, to the realm of wishful thoughts. We now have only the two alternatives. And even so, though we might have a preference, we may not have the choice.
The recognition of Croatia and Slovenia by EEC member states last week gave us a taste of how policies will be made in future: first, a German proposal which gains only minority support; then, an announcement that Germany will go ahead anyway; after that, a dwindling of the doubters into a dis- contented rump; and then a miraculous conversion. One day before the German- imposed deadline for recognition, Mr Hurd told a House of Commons committee: 'I would have thought it would not be very long before we recognised at least Slovenia and Croatia.' Looking back at that state- ment, one can only marvel at the Foreign Secretary's prophetic insight.
On this issue, as it happens, the Germans were right. We should blame them neither for their choice of policy, nor for pushing so hard to promote it. But we should blame our own government for locking us into a system in which one country can so easily sway the rest, and where the process of domination is glorified as the achievement of 'unity'. Of all the strange ideas which have become common currency during the last few years, the strangest is the notion that we are 'locking Germany into Europe'. A strong cage is indeed under construction, but the keys to it are jingling on Germany's belt.
That cheerful sound is hard to distinguish from the chinking of coins in Germany's pocket. Money does buy influence in these matters, and sometimes the price is surpris- ingly low. Think of the joint Anglo-German consulates and embassies which are now planned for several of the ex-Soviet republics — so much cheaper for our poor over-stretched Foreign Office, and so much more communautaire (or should that be gemeinschaftlich?) Then try to imagine how, once these diplomatic joint ventures are fully functioning, it will ever be possible again for Britain's policy towards those countries to diverge in any important respect from Germany's.
'Yes, but how much more powerful our policies will be when we are acting together with the strongest country on the entire continent': that is the reply of the enthusi- asts for domination by a strong Germany, who care more about having policies which are powerful thin about having policies which are our own. The alternative, which they tend not to consider, is domination by a weak Germany. This may at first seem more attractive; but it is possible that a dominant weak Germany will use its domi
nance to shore up and protect its own weakness, by making us weak too.
The first inklings of this possibility came with the arguments at Maastricht about the so-called Social Chapter, which was based on the principle that the heavy burden of extra costs which afflicts German industry should afflict Germany's European com- petitors too. Mr Major has held this threat at bay for the time being, though if he loses the next election we shall be signed up for the Social Chapter faster than you can say `full benefits for part-time workers'. But some elements of this social programme will be pushed through anyway under the cover of 'single market' legislation. And besides, the logic of the argument is irre- sistible to the worker in the street: 'If only you gave yourself as many holidays as the Germans, and were guaranteed a pension as large as theirs, you would become as rich as they are.'
The average German has six weeks' holi- day a year, and takes another four on sick leave. (In Britain the figures are four and three.) The plant in a German factory oper- ates for 53 hours a week (76 in Britain).
The labour cost per unit of German manu- factured goods is 25 per cent higher than in Britain. Even the biggest German compa- nies — Siemens, Bayer, Hoechst and others — are now locating their new factories out- side the country, driven out by the high cost of social benefits (£6 per employee per hour). Last year's mad spending spree on the east of Germany pushed up wages as well as inflation, and the steel-workers are threatening strikes in support of demands for pay rises at nearly three times the infla- tion rate.
It is possible that Germany has now reached a historic turning-point: the moment when it ceases to be a real eco- nomic power-house, and instead becomes high-spending, self-indulgent and protec- tionist. If • so, we have chosen a strange moment at which to chain ourselves to this tottering giant. With our own recession already made more severe by our sub- servience to German interest rates, we think that we are paying a heavy price for keeping Germany strong. The price of Ger- man weakness may turn out to be even higher.
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