′Berlin′s austerity policies have lost a big supporter′ | Europe| News and current affairs from around the continent | DW | 24.06.2016
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'Berlin's austerity policies have lost a big supporter'

The Brits have voted themselves out of the European Union. Now pressure to reform the EU is growing on Brussels and Berlin, Philipp Rotmann, a political scientist at the Global Public Policy Institute, tells DW.

Deutsche Welle: Germany is the strongest country in the EU. The United Kingdom offered great political support to Berlin. What's next for Chancellor Angela Merkel?

Philipp Rotmann: Yes, this is a big problem for Germany - especially for the business, finance and political sectors. Berlin's austerity policies have lost a major supporter in Europe. I believe that, in the long term, policies such as those that were imposed on Greece will not prove sustainable. Maintaining unity and the ability to make tradeoffs among partners will require the application of social, even Keynesian, economic policies.

Is there a threat of a knock-on effect of eastern and southern European nations looking to leave the EU?

Yes, there certainty is - especially because pro-Europe policies only appeal to a small sector of society. It's conceivable that, as in Great Britain, other countries will see internal demand for referenda that their governments will not be able to suppress. This especially applies to countries in which the political systems are already a bit mixed up, such as countries in the south, in Spain, in Greece, but also in the Netherlands or France, places that currently have strong populist movements.

How big is the pressure on the European Union to make changes?

Phillip Rotmann, Berlin

The Berlin-based political scientist says the EU may have to try Keynesian economics

It's gigantic. It would be utterly laughable for the EU to stick its head in the sand now. For example, foreign affairs representative Federica Mogherini wanted to put forth an "EU Global Strategy." When one of the three big pillars of the EU breaks away - and, on top of that, one of the two countries that one could describe as having a global perspective - it would be utterly laughable to put forth an ambitious foreign policy.

Still, the EU has no choice but to move forward. There will probably have to be another convention, similar to the constitutional convention. Serious thought will have to be given to how major political debate will be handled in the rest of the EU - questions like: What do we want from Europe and what does that mean for the future.

Britain's leaving means a definitive weakening of the European Union. In economic terms, is the EU still a global player?

Yes, of course, but one that has been significantly banged up - especially in foreign and security policy. In China or India, the EU will be taken less seriously than it is today. But the EU will remain a global player economically, especially the eurozone, which the Brits didn't belong to anyway.

Will the finance world move from London to Frankfurt now?

The finance world will likely go in multiple directions. Frankfurt will surely come out of the crisis ahead, but I don't believe that one should have too much schadenfreude. A lot of finance will also head for New York and other places. Frankfurt definitely won't get the full bloom.

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