The Return of German Pessimism

Stephen F. Szabo

Senior Fellow

Dr. Stephen F. Szabo is a Senior Fellow at AICGS, where he focuses on German foreign and security policies and the new German role in Europe and beyond. Until 2017, he was the Executive Director of the Transatlantic Academy, a Washington, DC, based forum for research and dialogue between scholars, policy experts, and authors from both sides of the Atlantic. Prior to joining the German Marshall Fund in 2007, Dr. Szabo was Interim Dean and Associate Dean for Academic Affairs and taught European Studies at The Paul H. Nitze School of Advanced International Studies, Johns Hopkins University. He served as Professor of National Security Affairs at the National War College, National Defense University (1982-1990). He received his PhD in Political Science from Georgetown University and has been a fellow with the Alexander von Humboldt Stiftung, the Woodrow Wilson International Center for Scholars, and the American Academy in Berlin, as well as serving as Research Director at AICGS. In addition to SAIS, he has taught at the Hertie School of Governance, Georgetown University, George Washington University, and the University of Virginia. He has published widely on European and German politics and foreign policies, including. The Successor Generation: International Perspectives of Postwar Europeans, The Diplomacy of German Unification, Parting Ways: The Crisis in the German-American Relationship, and Germany, Russia and the Rise of Geo-Economics.

The End of Modell Deutschland

Germans have been notoriously pessimistic throughout their history. Walter Laquer, a long-time analyst of Europe, once laid the origins of this pessimism to the Thirty Years War and the devastations which resulted in one-third of the German population dying. The experience of World War II and its aftermath only enhanced this pessimism which was the result of German power but also of German vulnerability. However, more recently, Germans have had the unexpected and unusual experience of limited optimism. The fall of the Berlin Wall unleashed an outpouring of joy and then-chancellor Helmut Kohl promised “blooming landscapes” in eastern Germany. Germany has become one of the most respected and admired countries in public opinion polls over the past decade or so. It has been, contrary to its history, a stable and prosperous democracy with a Social Market Economy combining capitalism with a sense of social justice and avoiding the worst kinds of inequality that plague the American system. Its political system has been able to limit the corruption of big money and has had few major political scandals. Freedom House awards it a rating of 94 out of 100, ranking it just behind the Scandinavian members of the EU and far ahead of the United States. Former chancellor Helmut Schmidt, not someone known for modesty, labeled his country already in the 1980s as Modell Deutschland.

Internationally, Germany has also been an exemplary European power and one of the most reliable supporters of the European Union. It was Germany which led the enlargement of the European Union to bring in the new democracies of East Central Europe and did what it could to prevent the United Kingdom from leaving the EU. It has renounced militarism and is no longer feared by its neighbors. German optimism peaked with the end of the Cold War, the peaceful unification of the country, and the demise of the USSR. As the diplomat Thomas Bagger wrote, Germans believed that history was moving in their direction with a future based on the multilateralism of civilian powers and a democratic peace.

However, as Germans have probably always feared, this era of good feeling is over, and they will soon return to their more characteristic pessimism. This is not necessarily a bad thing given the changing international and domestic political environment. As Martin Wolf argues, pessimism avoids the mistakes of overoptimism, “most recently over the wisdom of finance and the good sense of electorates.”[1]

Reasons to Worry: Domestic Politics

Here are some reasons for Germans to be worried about their future. First and foremost is the crucial combination of a resource-poor manufacturing nation with an export-oriented economy. Germany has become a world-class export power but has been dependent upon imported energy, especially from Russia, and markets, especially recently in China, for its prosperity. The obvious dangers of this have become apparent in the last few years. A recent article in the Financial Times describes why a “gloomy Germany fears another recession,”[2] German industry can no longer rely on fossil fuels, especially from Russia, and is at a growing competitive disadvantage internationally. Its aging society is increasingly dependent upon foreign workers at a time when resentment toward immigrants is growing. Already its companies are facing major shortages of skilled workers, something which can be fatal to an economy based on the so-called Mittelstand. German democracy has prospered as the economy has prospered, but will this be the case in difficult economic times?

Germany is vulnerable to both strategic shocks and its imbalanced economic model.

Its admirable political system is showing signs of deterioration as well. West Germany was a stable political system based on three political parties which were all centrist oriented. Unified Germany now faces a six-party system with at least two anti-democratic parties. The current government is the first in postwar German history to be based on a three-party coalition as the two formerly major parties, the Social Democrats and the Christian Democrats, can no longer muster more than about 40 to 45 percent of the vote together. More worrisome, Germany now seems to be becoming more of a normal European power, which means it is becoming susceptible to the right-wing populism of its neighbors and big protector, the United States. The rise of the Alternative for Germany (AfD) to the point that it now rivals the Social Democrats in terms of popular support, at least in the polls, is deeply concerning. Germans long resisted the authoritarian temptation to which their neighbors in Poland and Hungary, and more importantly in France, Italy, and even in Scandinavia have undergone. The admirable confrontation with the past that Germans had gone through seemed to be enough of a buffer to avoid falling into the authoritarian trap. This awareness has been weakened by generational change and demographic shifts.

This underlines a deeper and more disturbing truth that unification has not been as successful as promised or hoped. Western Germany remains a democratic society, but eastern Germany is much less so. The eastern German electorate resembles more the voter base of the right in the other countries of the former eastern Europe who never really went through the democratic socialization of west Germans, and they now seem to prefer a party that most west Germans have rejected. In foreign policy, they are far more Russia- and Putin-friendly than their western brothers and sisters.

Strategic Vulnerability: The End of Civilian Power

On the strategic level, Germany has been able to maintain its role as a civilian power with a limited defense capability due to the American strategic umbrella. This era is now clearly coming to an end with Russia’s brutal war on Ukraine at a time when the United States combines a growing concern about Asia and China with its increasingly unreliable political system as America experiences its own Weimar period.[3] Germans are now confronted by an aggressive, unpredictable, and very dangerous Russia which will pose a threat to it and European security for the next generation at least, as there is little prospect that a post-Putin Russia will be any less dangerous than the current version.

The German experience of a phoenix rising from the ashes after Hitler is unlikely in Russia. Yet Germany faces this threat with one of the worst militaries in Europe, the result of decades of neglect and of overlearned lessons of the evil of war. As a new study by the German Council on Foreign Relations points out, “since the end of the Cold War, successive governments and parliaments have continued to maintain armed forces but have failed to ensure these forces were capable of defense. The state has thus neglected its security responsibilities. Germany has been free riding on security, especially on the contributions of the United States. According to the logic of deterrence, this actually increased the risk of war.”

The question facing Germany’s future is whether it can find the kind of decisive leadership it has found in other major challenges.

In short, Germany is vulnerable to both strategic shocks and its imbalanced economic model. It has been buffered for many years by a benign international system in Europe. That system is now gone. Its major protector is no longer reliable, and the old Mittellage has returned as Berlin finds itself surrounded by European partners who are also becoming less reliable in terms of democracy. Its stellar business model and business community are dealing with increasing problems of corruption ranging from Wirecard to susceptibility to Russian money and influence. Nowhere is this clearer than in the example of Gerhard Schroeder and his allies who have been compromised by the Russians.

While faced with the lessons of dependence on Russia, many of Germany’s leaders, including its current chancellor, have not applied them to China and continue to increase German dependence upon not only Chinese markets but Chinese largesse. The recent measures taken by the Vice Chancellor and Federal Minister for Economic Affairs and Climate Action Robert Habeck are encouraging, but the coalition government remains divided. As was the case with Russia, German political leaders refuse to rein in the private sector and prioritize profits and jobs over longer-term strategic vulnerability.

A Test of Leadership

The coalition nature of German politics has preserved and expanded democracy and consensus-oriented incrementalist policies. However, once the party system becomes too fragmented, leadership becomes increasingly difficult and decisions are deferred. A system based on two large and one smaller party worked well, but one with six parties—including two with doubtful democratic credentials—is problematic. The question and challenge facing Germany’s future is whether it can find the kind of decisive leadership it has found in other major challenges, including those faced by Konrad Adenauer in the 1950s and Helmut Kohl after the fall of the Berlin Wall. Even Gerhard Schröder undertook major economic reforms during his time as chancellor.

The fact that the Federal Republic has found this leadership in the past is reassuring, and it will be a test for the younger generation of Germans who are now being shaped by these events. There are some encouraging signs with the emergence of Annalena Baerbock and Boris Pistorius as leaders who understand the new and dangerous strategic environment. As the German Council on Foreign Relations study notes, this is a historic decision point for Germany and Europe: “What happens now will determine whether Germany manages to change its political course and mindset and then stand up, including in military terms, for Europe’s security, or whether it will go back to its old ways after a brief moment of alarm.”

[1] Martin Wolf, The Crisis of Democratic Capitalism (New York: Penguin Press, 2023), p. xv.

[2] Martin Arnold, “Gloomy Germany fears another downturn,” The Financial Times, August 21, 2023, p. 2.

[3] For a recent and extensive of America’s democratic crisis see Dan Balz and Clara Ence Morse, “American democracy is cracking. These forces explain why,” The Washington Post,” August 21, 2023, p.A1.