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Email this citationCIAO DATE: 02/06
The United States Needs German Economic Leadership
Adam S. Posen
January 2006
Abstract
On January 13, Germany’s new chancellor, Angela Merkel, will have her first official visit with US President George W. Bush. Washington, or at least the part of Washington that still pays attention to transatlantic issues, not just the Bush administration, will be glad to see her given that she is not her US-bashing predecessor Gerhard Schroeder. Though this change in atmosphere is welcome, no one should make too much of it. It is unlikely to make much difference on security issues, where Iran’s own actions are forcing the United States and Germany to come together, where German public opinion will keep the governments apart on Iraq, and where neither country is prepared to make major changes to defense budgets and approaches. The Masri case will certainly limit Merkel’s interest in appearing too chummy with Bush on security matters.
Where Chancellor Merkel will find several opportunities to take a new and constructive tack is on transatlantic economic relations. German-American foreign policy tensions over the Iraq war indeed have failed to spill over into the economic sphere, consistent with the pattern of most of the postwar period. Underneath this amity, however, remain several real and troubling economic challenges that only explicit intergovernmental action can resolve. The lack of policy actions to address these challenges in recent years, let alone of direct cooperation between the German and American governments to deal with them more fundamentally, has created a situation where the United States urgently needs Germany’s help in the form of economic leadership.
