One of the trends SNN has highlighted over the last few months is the growing independence of Germany (which is still occupied by thousands of US soldiers over half a century after the end of WWII) from the United States. A few decades ago Germany was a divided country, completely indoctrinated in self-hatred, that was easily pushed around by the Atlantic powers. These days Germany is a re-united manufacturing power in a largely de-industrialised Western World. It enjoys a low unemployment rate while most of the rest of the West wallows in high unemployment and massive debt. Germany has developed closer ties with Russia (where it has invested heavily) and increasingly relies upon that country’s enormous energy production rather than the US-controlled Gulf States’ energy. The Germans have opposed or dragged their heels on all the various wars the US has started in recent memory, moving them close to Russia and China on the international scene.
Recent news of US President Barack Obama’s troubles getting the Germans to bend to his will is very much in line with the trend towards independence. The weakness of the US’s position relative not just to Russia but also to Germany is increasingly apparent. Keep in mind that all these negotiations and international diplomacy are going on while the US is losing a war in Afghanistan and alienating virtually the entire Pakistani population (a country that was formerly quite friendly to the US). In fact, the troubles for the US don’t stop there. The US-supported Orange Revolution failed in the Ukraine and the US and Israeli-backed Georgians were soundly defeated by the Russians in South Ossetia and Abkhazia. As if these international failures weren’t enough, the US is mired in high unemployment and its diverse and divided society is increasingly skeptical of the government. While the trend for the Germans is towards greater independence, the trend for the US is towards decline and loss of international influence.
A recent article by Tony Czuczka and Margaret Talev for Bloomberg describes the showdown between Obama and the Germans:
President Barack Obama has spent much of his term trying to get Chancellor Angela Merkel in his corner, only to find the German leader won’t easily bend to U.S. will.
Five months before the presidential election, the stakes are rising. Obama, in advance of a G-20 summit and European Union crisis meetings, is urging Merkel to take actions aimed at forestalling a euro region financial meltdown that would threaten the U.S. — and his campaign.
…Obama has joined European leaders who chafe at Merkel’s prescription of budget austerity. While Germany may back expanding EU job-creation projects, Merkel balks at proposals for greater deficit spending or underwriting the entire currency union’s debt with joint bonds, even as the turmoil risks driving Greece out of the euro and Spain to seek aid for its banks.
The U.S. may be more vulnerable than Germany, which has bucked the crisis. German unemployment is at a two-decade low of 6.7 percent and the economic growth that helped the euro area avoid recession is lessening Merkel’s incentive to change tack as Germany heads toward its own election next year.
“A further negative shock from Europe has significantly more potential to have a negative impact on the U.S. than on Germany,” Jacob Funk Kirkegaard, a research fellow at the Peterson Institute for International Economics in Washington, said in an interview. “If we had 5 percent unemployment, there wouldn’t be much contagion to the U.S. If we had strong job growth, a balanced budget, this wouldn’t really matter much to investors.”
Federal Reserve Chairman Ben S. Bernanke said at a congressional hearing yesterday that Europe’s debt crisis “poses significant risks to the U.S. financial system and the economy.”