Rudderless Europe: Will real Germany please stand up?

The collateral damage has been huge, both for those who believe in the Spitzenkandidat process and for those hoping for a coherent German vision for Europe.

Even incoming EU Commission president Ursula von der Leyen isn't Merkel's choice. It's like president Emmanuel Macron binged on (dubbed, no doubt) versions of Gossip Girl and the Manchurian Candidate during that all-night European summit.

Suddenly speaking French is once again a requirement for all the top jobs in Brussels and the Germans couldn't decide what exactly they were fighting for.

The EU might be relieved to have cobbled together a deal but make no mistake, Europe is increasingly rudderless. And Europe is floundering because Germany refuses to lead.

German regimes, for the last two decades, have prioritised perceived German interests to the detriment of the cohesiveness of EU policy making.

This, of course, occurs with all member states, but with Germany this process has been so consistent in its application that its beginning to seriously weaken EU effectiveness.

Take energy policy for example. Isn't one of the objectives of the EU's Energy Union to lessen dependence on Russian gas? So to achieve this goal Berlin continues to support the Nord Stream 2 pipeline which will dramatically increase supplies of Russian gas direct to Germany.

Seriously, this isn't European leadership, it's more like some weird Tatort episode.

Industrial policy is another example of how German national interests are beginning to seriously erode the EU's capacity to plan strategically.

Suddenly, China is the enemy at the gates and ready to decimate Europe's industrial base.

This may well be the case – and certainly there is a real argument to be made for building European champions to provide a global scale – but this volte face wasn't the result of coherent EU strategising.

It was born of Berlin (aided by Paris) being seriously peeved by the EU refusing to sanction the merger of Siemens and Alstom.

As a result, out the window must go 40 years of EU competition policy.

Shouldn't the creation of EU champions and a new EU industrial policy be based on an actual EU-wide debate and analysis? If not, it's just imperial power politics with a different name. I guess it's tough to rework diesel policies for the electric age.

Euro problems lurk

And let's not forget the euro – the single issue that could literally collapse the whole EU edifice.

The German response to the fundamental structural weaknesses of monetary union – such as cutting the umbilical cord between banks and national government finances - has been painfully slow, focused on domestic German political interests and devoid of all long-term vision.

Even the minimum policy response of banking union remains incomplete. As a centre-right economist, the mind boggles that many respectable German commentators blame Mario Draghi and the European Central Bank for their phobias.

And the British think they have problems.

On defence and security spending – let's just all admit what is obvious – president Donald Trump is right. There is no rational reason why the Germans should not spend more on security and defence.

All the superfluous talk in Berlin of how much they participate in actual NATO operations and their humanitarian budget are half-hearted attempts to cover their tracks. Again, perceived national politics prevails over wider strategic imperatives.

In effect, the EU has become a prisoner to Germany's combined historical psychoses.

The real German legacy since reunification – beyond the soothing (but largely meaningless) rhetoric of solidarity and friendship – has been to drag Europe along into this Freudian maze. Berlin lies trapped in the death grip of a 'Schwarze Null' [no debt] cult and it's the rest of the EU that's paying the price.

But all is not yet lost.

A new chancellor, an able German Commission president and Brexit presents a new opportunity to reset Berlin's vision for the future of Europe.

By placing itself confidently at the heart of Europe, Germany needs to set out its vision for the future of the EU.

What does Germany want from Europe? What can Berlin do to help develop a sustainable and growing European economy? Germany must acknowledge fundamental realities such as how the Eurozone, as currently constructed, is simply unsustainable for many other member states.

Honesty and pragmatism are required as is an understanding that being the largest member state brings real responsibilities and (just as importantly) real compromises.

But to do this, to really lead and shape Europe, Berlin must realise that you can't live in fear of the future by trying to remedy the past. Germany deserves more, so does Europe.