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[Document Contents]

Germany at the Summit

Hanns W. Maull

VOLUME XXIX, No.2, April-June 1994

Germany at the Summit

The immediate reaction of many observers to the remarkable transformation of the European political landscape in and around Germany after German unification during 1990 was to predict the rise of Germany as a new power. Depending on their positions, experience, and assumptions about this new Germany, this prospect inspired awe, fear and apprehension,(2) but also hopes(3). It also gave rise to a wave of books and articles on a new, tripolar power configuration in international relations, with the three poles being America, Germany and Japan.(4) This triangle was seen alternatively as a new world directorate or, more frequently, as the core conflict configuration of a system of international relations now dominated by "geoeconomics",(5) which had come to replace the old geopolitics of the East-West conflict.

To a large degree, those expectations about the rise of a new power have turned out to be exaggerated and often distorted. Even from the (somewhat problematic) perspective of the hitherto dominant international relations paradigm-that of realism-those expectations were based on spurious analysis: they assumed, but did not convincingly demonstrate, a sharp enhancement in Germany's international power,(6) while in fact Germany's power increased only in terms of territory, population and total GNP- and rather modestly at that. In terms of economic vitality and dynamism, but also in terms of military strength, political stability and social cohesion, Germany has not become stronger, but in some regards arguably even weaker. With respect to the present and future distribution of international power, the truly salient factors are clearly not the ascendancy of Germany, but the implosion of Soviet power and the rise of East Asia.

Those expectations were more dubious still if analysis includes not only power capabilities but also social purpose and political will. German unification was not the result of a carefully crafted West German strategy; it was driven by economic and social forces such as mass emigration from East Germany. Politics and policies were attempts (at times desperate) to channel and contain these forces through new institutional arrangements. This process is still far from complete: full achievement of German unity in economic terms may take another decade, while healing the environmental, social, political and cultural divisions between the two halves of the country will probably require a whole generation.

The upshot of all this is a Germany which is both old and new, both more powerful (or rather "weighty") and more vulnerable. Its policies want to emphasise continuity at all cost, yet they have inevitably been pushed off their trajectory and in new directions by changed interests and changed circumstances.

United Germany in the G-7: The New Balance of Interests

What implications has this new balance of old and new interests had on Germany's attitude towards the G-7? The economic and political dimensions of this question will be dealt with in turn. Attention will be directed first at Germany's economic interests.

The economy

Germany's postwar evolution has given it an economy which for its size and characteristics is unusually dependent on international markets for goods, services and capital. Compared to other major Western industrialised countries, its patterns of trade are clearly exocentric (see Table 1).(7)

Similarly, both inward foreign investment in Germany and Germany's investment abroad are substantial, though significantly lower than those of the UK and, interestingly, even those of France.(8) These intense interdependencies with the European and world economies have not changed significantly as a result of unification. They imply an unusually high dependence on, and vulnerability vis-a-vis, international economic developments in two major contexts: first, the European Economic Area comprising the European Union and the aspirants for future membership from EFTA, as well as Central Eastern Europe; and second, the global economy with its other major poles in North America and East Asia. In the inner, European circle, Germany's economy dominates through its weight and the strength of its currency; in the outer, global circle, Germany continues to be the weakest of the three major national economies and thus depends on cooperation and policy coordination to pursue its own economic objectives. The basic tenets of the G-7 process-joint management of international economic developments through macroeconomic policy coordination(9)-thus continue to be highly relevant for united Germany.


Exports of Goods and Services as Percent of GNF
1974-80 1981-90 1991 1992 1993
USA 8.8 8.8 10.5 10.7 10.6
Japan 12.8 12.6 10.4 10.2 9.8
France 20.4 22.4 22.7 23.0 22.9
Italy 20.4 19.6 18.0 18.1 20.1
UK 27.6 25.7 23.5 23.3 25.0
Germany 25.5 30.3 32.2 34.1 33.5

Source: IFRI, RAMSES 1994 (Paris: Dunod, 1993), Annexe Statistique.

Moreover, economic policy making-like so many other aspects of German unification-rests exclusively on the intellectual and ideological foundations of the former West Germany, bringing into the process of macroeconomic policy coordination the traditional inclinations and interests of German foreign economic policy: an innate aversion against anything which might risk a surge in inflation,(10) and a distinctly conservative (i.e. non-interventionist, fiscally orthodox, and decidedly monetarist) approach to economic policy issues.

Those "old" economic interests, however, have been qualified and amended by a set of "new" economic considerations resulting from German unification, the transformation of Europe, and the metamorphosis of the world economy. In economic terms, German unification has turned out to be much more difficult and costly than was originally assumed. This is nicely illustrated by various attempts to quantify the "net productive value" of East Germany's total economic assets. The first such attempt was made under the last Communist-led government headed by Hans Modrow; the calculations resulted in a estimated net value of the GDR of DM 1,200. Those sums were then revised by the first (and last) freely elected East German government headed by Lothar de Mazière; the result was an estimated net value of about DM 500 bn. The third calculation was carried out by Treuhand, the institution charged with privatising East Germany's productive assets. The net value of those assets is now considered to be negative to the tune of at least DM 400 bn (not all the bills are in yet): the cost of keeping or making those assets productive has turned them into liabilities.

Unification thus necessitated huge investments and transfer payments: net transfers from West to East Germany came to DM 132 bn in 1991, DM 156 bn in 1992 and an estimated DM 170 bn in 1993, or about five to six percent of GNP per annum. Transfers in this order of magnitude will have to continue for several years to come. Only a small part of this huge additional claim on public money was mobilised through higher revenues and savings in other areas. The majority of transfer payments were financed through debt expansion, pushing the level of total public debt up sharply. Domestic savings were no longer sufficient to meet the concomitant capital demand, resulting in a sharp rise in interest rates and a substantial increase in capital inflows into Germany, which in turn brought about a sudden but sustained swing of the current account into the red.

Thus, Germany's traditional position as an economy with large balance of trade and payments surpluses is no longer: Germany has become a net capital importer. As long as the government was unwilling or unable to make room for the transfer payments by cutting back on spending in the Western parts, high interest rates were inevitable to finance the cost of German unification. This forced interest rates up in other countries, which now had to compete with Germany to attract capital, and thus impeded economic growth there, as well asin Germany. If Germany's partners had benefitted extensively from the first phase of unification, which involved a surge in consumption, through higher exports to Germany, they were now called to pay the price in the form of higher interest rates and lower growth.

This produced tensions between Germany and its partners. Sustaining its basic choice, which in effect socialised some of the costs of unification, became a "new" economic interest of Germany in the context of the G-7. The interests of Germany's partners, on the other hand, required lower German interest rates and efforts to reduce the public sector deficit-something which many in Germany, including the Bundesbank, also saw as necessary in the longer-term self-interest of Germany, as it was feared that the high level of public debt would damage the economy.

During the first years of the 1990s, it slowly dawned on Germany that, in addition to the cost of unification, it also faced serious structural economic challenges stemming from the superior competitiveness of East Asian and American products in world markets. These challenges have produced a relentless rise in unemployment, and call for drastic adjustments in the German economy and society. In the future, this may well establish another "new" economic interest: an interest in moderating and postponing the pressures of economic and social adjustment through market interventions. The first signs of this can already be recognised in a new willingness to consider industrial policies for high- tech industries.(11)

Foreign policy

Turning now from economics to foreign policy, we find a similar picture with the same emphasis on continuity in a radically different setting. In particular, Germany's foreign policy establishment has, time and again, emphasised the need and the desire to adhere to what one observer has aptly called "multilateralism as a principle" (prinzipieller Multilateralismus)(12) on all major foreign policy and security issues: in coping with new policy challenges, German foreign policy would almost reflexively tend towards multilateral frameworks and multilateral approaches. In part, this reflected the new Germany"s postwar foreign policy socialisation and its convictions as a "trading state"(13) and a "civilian power"(14); in part, however, as it stemmed from a desire by the foreign policy establishment to reassure Germany's partners and neighbours about its intentions (necessary in the light of wartime and holocaust memories still very much alive in many countries), and to prevent a "ganging up" against Germany in a traditional balance-of-power effort to counter Germany's alleged rise in power-efforts which the German foreign policy establishment saw as counterproductive and even dangerous not only for Germany.

But here again, Germany's "old" interests and priorities became enmeshed with new concerns and demands, which modified the traditional policy vectors. The most important of these are related to Eastern Europe and the former Soviet Union. After the end of the Cold War and the old division of Europe, Germany stopped being a frontier state in a military sense. But it quickly found itself at the cutting edge of a new divide running through Europe: a divide marked by disparities in wealth and material well-being. Moreover, while the old threat from the East has for all practical purposes disappeared (though some still speak about a possible future "reconstitution" of a direct military threat from Russia to the West), the collapse of the Soviet empire and the Soviet state in its wake has brought new uncertainties and diffuse but potentially alarming risks of ecological disaster, proliferation of conventional arms and weapons of mass destruction, political turmoil, social decay and forced mass migration.

Germany found itself particularly exposed to those new risks and uncertainties: its neighbours to the East were states with as yet fragile democracies and economies facing huge challenges of transformation. Some of these problems even existed inside Germany-in the new Länder in the Eastern parts. Efforts to defuse those uncertainties and risks rapidly became an urgent priority for German foreign policy, resulting in a new emphasis on relations with Eastern Europe, the European successor states of the former Soviet Union and, in particular, Russia. In some sense, this can even be seen as another expression of continuity: the Federal Republic had, after all, always given much emphasis to efforts to defuse risks and remove sources of threats to peace stemming from the East, and its Ostpolitik, by recognising the status quo (though not unconditionally), had at least temporarily sacrificed unity at the altar of European stability.(15) Peace and stability as preconditions for democratic prosperity, and not German unity, thus became the old Federal Republic's supreme national interest. This seems appropriate enough for a state which has, in 45 years, undergone an extraordinary metamorphosis from a brutal aggressor to a "civilian power".

In sum, the new Germany continues to be and to perceive itself as being highly dependent on functioning multilateral mechanisms and arrangements of international cooperation to satisfy its own national priorities. Under the shock waves from internal and external upheavals in the wake of unification, those priorities have gradually turned into new expressions of old preoccupations: the economic imperative for an open world economy and the obsession with stability in Europe. In the new, post-Cold War world of the 1990s, Germany has ceased to be a net exporter of goods, services and capital, and a net importer of security. Both shifts, in turn, have had profound domestic social and political implications, forcing the country to reconstruct the economic and foreign policy foundations of its postwar polity. In wrestling with this challenge, the preference of decision-makers has clearly been to retain a maximum of continuity-so much so, indeed, that they have often failed to perceive fully the inevitability of change. The political will to continue along the successful foreign policy trajectory of the old Bundesrepublik, and hence the commitment to multilateralism, has not, however, been enough: beyond that commitment, Germany needs to mobilise its own resources and find willing partners to make international cooperation effective.

The realities of this new Germany have often been seen differently from abroad. Germany's partners and neighbours tend to emphasise Germany's strength and underestimate its vulnerabilities. This has led to higher expectations about Germany's future role and contribution, and often also to apprehension about a newly "assertive" Germany. These perceptions, expectations and fears are, of course, somewhat contradictory, demanding from German foreign policy an almost impossible balancing act of assuming greater responsibilities while avoiding assertiveness.

The Summit Process as A Focus for German Foreign Policy

In the German search for effective multilateral mechanisms and institutions for international cooperation between the major industrialised countries, the G-7 summits have from their inception figured prominently. To be sure, participation at the annual summits accorded great international prestige, and in the case of Japan and Germany, inclusion in this highest political forum of the Western alliance system to some extent substituted for their absence from the UN Security Council. But even more than for Japan (whose economy was bigger but whose weight in international economic policy-making was less than that of Germany for a variety of reasons), for Germany, participation in the G-7 process was generally seen as imperative and obvious from the earliest beginnings of this process in the "Library Group" meetings.(16) Germany was the dominant economy in the European Community and, by extension, in the whole of Western Europe; and its integration into two concentric circles of economic activity, European and world markets, allowed it to some extent to play off the two dimensions against each other. This gave Germany a margin of manoeuvre in foreign economic policy superior to that of Japan.(17) A key facet in this situation was, of course, the role of the D-Mark as the key currency in Europe, which made the Bundesbank perhaps the single most important arbiter of international monetary developments.(18) Obviously, Germany had to be included in any effort at multilateral management of international economic affairs.

On the other hand, Germany's postwar experience had made it well-disposed towards, and well-equipped for, the logic of collective management. More than any other major country, the Federal Republic was acutely aware of the new facts of international life-the realities of interdependence and the exigencies of collective action. In economic, social, political, and even in security terms, a country's welfare had come to depend intimately on developments in other countries; thus, only by acting together could countries hope to secure their own interests. As a rule, no single power, however "super" it might be, can unilaterally impose solutions to pressing concerns-effective action requires co-operation.(19)

This was the reasoning which led to the establishment of the annual economic summit meetings. While the initiative formally came from French President Valéry Giscard d'Estaing, German Chancellor Helmut Schmidt was strongly supportive of the idea from the beginning, and made an important independent contribution by arguing the case for including Japan in the process.(20) Although the German political system (based on coalition politics among major political parties whose different wings had to be carefully balanced) was less obviously geared towards summitry than were the American or French systems with their strong, directly elected presidents, or even the British system in which the prime minister enjoys a very powerful position, Bonn's own foreign policy experiences blended easily with the notion of compromise and consensus- building. Both Helmut Schmidt and his successor Helmut Kohl tended to attach great value to personal dialogue as a means of enhancing mutual understanding and chances for constructive compromises.(21)

During the 1970s, the summits were primarily concerned with management of international economics. Among the key issues were a) the future of the international monetary order; b) the enhancement of international economic growth through further liberalisation of world trade, macroeconomic policy coordination among the major industrialised countries and measures to alleviate the situation of the poor developing countries; and c) the containment of oil insecurity and instability. Germany played a key role in most of those issues, and the 1978 Bonn Summit, with its carefully tied package of mutual commitments by the major actors (US, Germany, Japan) is generally considered the most elaborate effort at policy coordination among the G-7.

Whether this effort at policy coordination was successful is another matter and evaluations of the Bonn Summit differ widely. What can be said safely, however, is that with the eruption of the second oil crisis in late 1978 the first phase of summitry had run its course. The last summits of the first series (Tokyo 1979, Venice 1980 and Ottawa 1981) were primarily preoccupied with issues of crisis management related to the second oil shock and the Soviet invasion of Afghanistan.

During the second cycle of summitry from 1982 to 1988, the emphasis shifted away from economic policy coordination (with part of this responsibility handed over to regular meetings of the G-7 finance ministers, an institution created by the 1986 Tokyo Summit) towards broader political issues and transnational problems such as the global environment, international terrorism and drugs. There was also a change in emphasis away from short-term policy coordination towards more general statements of principle and strategy, resulting in ever longer, broader and more non-committal communiqués, which tried to hide substantive policy disagreements by focusing on elements of consensus and mutual recognition of different national approaches.

As the course of summitry lengthened and the communiqués accumulated, a number of problems became apparent. Some of these are outlined below.

Technical difficulties. One set of problems was related to the technical difficulties of effective multilateral action. The reflationary elements in the 1978 Bonn package, which Japan and Germany had accepted as part of the quid pro quo, were not only overtaken by events in the wake of the second oil crisis, they also came too late: the recovery was already in full swing when the stimuli started to become effective.

Different economic and foreign policy cultures. At a deeper level, cooperative, action was impeded by different preferences and diverging economic and foreign policy "cultures" among the major players, and in particular between the US and Germany. Economically, Bonn almost instinctively favoured conservative fiscal and monetary policies and shied away from foreign economic policy activism and intervention. This preference was not only shared by the Bundesbank in Frankfurt; the latter's independent position and policy role tended to strengthen the conservative bias of Germany's foreign economic policies. Thus, Germany by and large resisted US pressures to reflate in order to play "locomotive" to the world economy. In the one instance in which Germany gave in (at the 1978 Bonn Summit), this was partly motivated by domestic pressures and calculations, and the episode was, in any case, widely perceived in Germany as an exemplary policy disaster, proving Bonn's point about resisting external pressures to realign economic policy.

The US, on the other hand, tended towards Keynesian activism during the 1970s and 1980s, albeit with very different expressions. During the Carter presidency, the emphasis was on international demand management; during the Reagan and Bush Administrations, soaring and persistent budget and trade deficits represented a huge stimulus to domestic and world economic activity, but also caused protectionist pressures in the US and massive volatilities in world financial markets. Throughout this period, the US persistently lived above its means and failed to address the underlying problems adequately. Taking refuge in short-term and often unilateral policies, it adopted an attitude of "benign neglect" towards the dollar in the second half of the 1970s and relied excessively on monetary policy during the early 1980s, driving interest rates and the value of the dollar to astronomical heights. But even when these short-term policies were multilateral, as in the case of exchange rate stabilisation efforts under the G-7 Plaza (1985) and Louvre (1987) agreements, they were bound to be ineffective as long as the necessary domestic readjustments were not undertaken.

Similar differences of outlook surfaced with regard to East-West relations-an issue which gained prominence during the first years of the 1980s. The basic elements of Western strategies towards the Soviet Union had been laid down authoritatively by the 1967 Harmel Report: defence against Soviet military power, and dialogue with the Soviet Union to alleviate tensions and eliminate the risk of war. Those elements were reconfirmed at the 1981 Ottawa Summit, but in practice, summit countries differed widely in their preferred policy mix towards the Soviet Union. This produced serious frictions over issues such as arms control and rearmament, European imports of Soviet natural gas, export credits and technology trade with the East. Again, those frictions arose importantly between the US and Germany: Bonn's concern about its relations with the GDR, and about stability in Europe in general, made it less inclined to follow Ronald Reagan's penchant first for confrontation with Moscow, and then for excessively far-reaching arms control proposals.

Divergent interests. Behind different policy perspectives and divergent economic and foreign policy cultures thus loomed divergent interests. Effective international policy cooperation required national changes in line with international objectives, commitments and responsibilities. These adjustments, some of which no doubt would have been painful, required strong, authoritative political leadership at home. But neither Bonn nor Washington (nor any of the other summit countries) showed much inclination to undertake painful domestic readjustments in response to international needs. With few exceptions, the G-7 governments abdicated their collective management of economic interdependence, leaving it to market forces and non-governmental actors. The also basically failed to align their respective approaches towards the Soviet Union.

During the 1980s, the annual summit meetings thus became increasingly ritualistic in their pious promises, their agreements to disagree, and their expressions of common concerns. The desire among the leaders to help each other in their respective domestic political contexts at times seemed to be the overriding justification for their get-togethers. In their "two-level game",(22) none of the major players seemed to have much domestic authority or political will left to make real commitments to his or her peers, thus emptying this second game of real substance and drawing it into the overriding logic of the first, domestic game.

Germany was neither immune to nor innocent with regard to this degeneration of summitry during the 1980s. The German economy suffered from the roller-coaster effect of US interest and exchange rates, but it also benefitted from the enormous export and investment opportunities of the Reagan years. German foreign economic policy held firm, rejecting pressures to cajole the country into the role of locomotive, to intervene massively in foreign exchange markets, or to free sectors of its economy which were heavily subsidised and closed (such as the aircraft industry or agriculture). In short, while at times inconvenienced and irritated by the erosion of the US's benign hegemony and by its foreign economic policy irresponsibilities, Bonn was ultimately in favour of the G-7 abdicating its international responsibilities for the domestic adjustments and changes which effective international management of economic interdependence would have required. Analogously, Bonn did not have the will, or perhaps the strength, to bring about an alignment of G-7 approaches towards the Soviet Union beyond statements of principle and grand strategy-although the summit was admittedly not the key forum for such an effort in any case.

These problems inherent in the evolution of summitry during the 1970s and 1980s contributed to producing a world adrift. The highest forum of the Western world generally preferred inaction to active policies, and mutual support for national approaches to effective coordination and collective action. Ironically, these shortcomings did not matter in the end because of a streak of good fortune for Western countries: freed by national deregulation policies in the early 1980s, the OECD and East Asian countries enjoyed a remarkably vigorous and sustained period of growth; and the election of Mikhail Gorbachev as Secretary General of the Communist Party in the Soviet Union resulted in momentous political changes in East-West relations.

The New Germany at the Summit:
From Houston 1990 to Tokyo 1993

Summitry entered its third cycle with the Summit of the Arch in Paris in 1989. The cumulative changes in Eastern Europe and the Soviet Union had not yet reached East Germany, but had brought German unification back into the realm of the possible: the communiqué issued at the end of Gorbachev's triumphal visit to Germany in June 1989 supported the principle of self- determination and thus suggested the possibility of a freely chosen unification of the two Germanys.(23) Still, none of the governments represented at the summit expected the process of unification to start within a few months and to end within the course of the next year. At the 1990 summit in Houston, Texas, the process of unification was already in full swing; by the time the London meeting was convened in 1991, it had been completed. The newly united Germany was able to host its first summit meeting in Munich in 1992. Tokyo 1993 was already an expression of a new normality.

Economic concerns

Economic issues enjoyed something of a comeback during the summits of the early 1990s. During the 1980s, they had been pushed into the background by the growing political dimension of the annual summits, but also by the introduction of transnational issues such as the environment.(24) Moreover, since 1986, issues of macroeconomic policy coordination had largely been handed over to regular meetings of the G-7 -finance ministers.

There are three reasons for the return to economic themes during the most recent summits:

Even so, the problem of domestic adjustments in line with international obligations cannot be avoided entirely. Just how difficult it has become for government to push through such adjustments in the face of organised domestic opposition was demonstrated by the protracted efforts to secure a new round of trade liberalisation in the context of the GATT Uruguay Round. Launched in 1986, the round was finally completed in December 1993. This took four summits: from Houston 1990 to Tokyo 1993, leaders focused important parts of their discussions on securing a successful completion of this GATT round, and repeatedly committed themselves to achieving this objective "within this year", only to come back to the problem at the next summit.

Germany had from the beginning seen the summit meetings as a means to contain protectionist pressures and maintain an open trading system.(26) Its support for the successful completion of the Uruguay Round was therefore natural and entirely in line with the past concerns of German policy. As already seen, it also reflected Germany's unusually high dependence on exports, which was intensified by the shift in united Germany's balance of payments position: Germany now needs to export in order to finance its capital requirements.

While Germany's support for free trade was, in principle, clearcut and simple, the political realities of the Uruguay Round, which encompassed the four summits of the 1990s, were complex. First, while German economic interests basically favoured an open trading system, there were a number of sectors (not only, though of course importantly, agriculture) which depended on external protection and thus resisted liberalisation. Second, as already mentioned, Germany's integration into the world economy is set into two concentric circles, the European and the world markets. In relative terms, German exports to Europe have grown during the past decade and a half, while those to the rest of the world have shrunk, indicating a relative withdrawal of Germany from world markets, and a stronger regional orientation. This has tied Germany's policies more closely to those of the European Communities. And institutionally, of course, the EC Commission in Brussels is at least formally in charge of Bonn's external trade policies anyway. Third and most important in qualifying Germany's support for free trade, however, was the key role of the Franco- German relationship in Germany's overall foreign policy. The statement by former Minister of the Economy Otto Count Lambsdorff that a GATT agreement was more important to Germany than the Franco-German relationship, had it exactly the wrong way around. More to the point, Germany simply could not afford to be pushed into this choice, and this limited its ability to put pressure on Paris.

As a result, Germany played a mediating role in the Uruguay Round between, American and British demands and French concerns. In the end, France was able to secure the support of its European Community partners (including Germany) for its demands on agriculture and cultural issues. Domestic concerns in Bonn regarding Germany's own agricultural lobbies, combined with the foreign policy priority of sustaining the Franco-German relationship explain this outcome. At the same time, Bonn no doubt exercised its influence in Paris to secure French support for a Uruguay Round deal-not least by way of financial compensation.

The economic recession of the early 1990s also revived faint echoes of earlier years of summitry, when macroeconomic policy coordination was seen as a way to accelerate sluggish growth (the 1970s) or reduce exchange rate fluctuations (the 1980s). Ironically, in the early 1990s, Germany basically found itself in the position of the United States during the first Reagan Administration, which it had strongly criticised at the time: massively accelerated deficit spending (resulting from tax cuts and sharp increases in defence expenditure in the US during the first half of the 1980s, and the costs of unification in Germany during the early 1990s) had initially pushed up economic growth, but also inflationary pressures and interest rates, which then combined to strangle growth.

As already noted, Germany's inability to accommodate the huge transfer payments ensuing from German unification through parallel steps at revenue enhancement and cuts in other public spending programmes actually put some of the burden of German unification onto its partners' shoulders through the interest rate mechanism. This produced sharp criticism within Europe and eventually led to the de facto collapse of the European Monetary System. It also ignited policy differences between Washington and Bonn, which have at times been acrimonious.(27) In the end, however, summitry during the 1980s established a firm pattern on economic policy: participants basically confined themselves to agreements to disagree, which covered mutual acceptance of and even support for respective national economic policies under a camouflage consensual expressing non-committal declarations of good intent. This pattern prevailed to such a degree that at the end of the Tokyo Summit, Chancellor Kohl was able to note with satisfaction that "interest rates have not played a particularly prominent role".(28)

Just as the US had refused to adjust its monetary and fiscal policies to accommodate international concerns during the Reagan years, so Germany refused to budge during the early 1990s. Policy adjustment did take place, however, in both countries, in response to domestic pressures and the exigencies of international markets: neither the US nor Germany could afford to disregard its budget deficits because international capital markets would have extracted severe punishments. In that sense, criticism of the Bundesbank by other European countries was somewhat disingenuous and misplaced: indeed, one wonders how much leeway the Bundesbank would actually have had to pursue different policies without seriously undermining the strength of the D-Mark, and thus the foundations of recovery. Moreover, by providing a firm anchor of monetary stability, the Bundesbank ultimately also acted in the interest of Germany's partners. The European currency crises of 1992-3, and in particular the readiness of the Bundesbank to support the French franc with extensive interventions, showed that the Bundesbank was willing to take wider interests into consideration, but also that its ability to do so was limited.(29)

Political concerns

The slow disintegration of the Soviet empire ignited by the top-down reform efforts of Mikhail Gorbachev presented the West with both a great opportunity and a severe challenge. The opportunity consisted in the chance to replace the old, bipolar international system of carefully sterilized confrontation with a new international order based on cooperation, consensus and gradual integration. The challenge was posed by the risks and reverberations set off by the slow- motion process of political implosion in Eastern Europe and the former Soviet Union itself.

For Bonn, this crucible was particularly acute: events in the East held out the prospect of realising Germany's two most cherished foreign policy objectives-the unification of the country and the removal of the threat of war-without any change in its firm commitment to the West and its institutions. Yet this opportunity was perceived in Bonn as limited in time, a "window" which could quickly close. For, as noted above, in the new circumstances, Germany found itself at the frontier of a new division of Europe, a division between rich and poor, and in many ways it was particularly exposed to the risks of transition in Eastern Europe and the former Soviet Union.

The importance to Germany of both the opportunity and the challenge was such that it preoccupied much of German foreign policy during the early 1990s-even at the G-7 summit meetings in that period. The management of the initial stage of the complex new situation, which opened in mid-1989 with the movement of people from Eastern Germany to the West via Hungary and ended with formal unification on 3 October 1990, remains a superb achievement of Western diplomacy under severe time pressure, an achievement in which Germany played an outstanding role.

In essence, German foreign policy throughout the first stage of unification to 1990, as well as through the subsequent second stage of managing the risks and reverberations of the collapse of the Soviet empire since then, has relied on economic and political influence, rather than on traditional military-political power; and its diplomacy has woven essentially bilateral discussions into multilateral, legally binding frameworks and institutions. In the highly multilateral approach of this civilian power, three notions have played key roles: initiative and leadership, coordination, and burdensharing. Those notions are, of course, also critical for the process of G-7 summitry.

In dealing with the international dimensions of German unification, the G-7 did not play a role-and could not be expected to. The external aspects of German unification primarily concerned the four powers that had defeated and occupied Germany, and its European neighbours, both East and West. The key multilateral fora for dealing with the external aspects of German unification thus became the "2+4 process", the European Communities, NATO and the CSCE. Indirectly, however, German unification did play a role during the 1989 G-7 summit meeting in Paris. At this summit, it was decided to charge the OECD with coordinating assistance to the new democracies in Poland and Hungary, and to put the European Commission in the chair of this programme. This decision, in which the key players were Chancellor Kohl, President Bush, the French host, President Mitterand, and the President of the European Commission, Delors, foreshadowed future German concerns in several ways: it called for the widest possible Western support for the transition processes in Eastern Europe and thus met German concerns about the need for burdensharing; it upgraded the role of the European Commission and thus squared with German support for advancing European integration; and it promised a major Western effort to stabilise Eastern European democracies.

This first G-7 decision relating to the new situation in Europe set the stage for the following summits. As seen from Bonn, in final analysis the security of unified Germany was tied to the unification of Europe: if Eastern Europe were to fail in its twin transitions towards democratic stability and free-market prosperity, this would inevitably affect the stability and prosperity of Germany as well. There were, of course, many good reasons why successful transitions in Eastern Europe were also in the interest of the West as a whole, quite independently of the new risks to Germany. But much as in the Cold War era, German security once again became the focal point of Western security as a whole, establishing a strong collective interest in German security among the allies.

The major difference was the nature of the threat: under the new circumstances, the threat to Western security consisted in instability and turmoil cascading geographically through interdependence from East to West. Russia in this context was of particular importance to Bonn. To be sure, there were other reasons for this German obsession with Russia, including the fact that the withdrawal of the Red Army from German soil would be complete only by mid-1994, as well as the traditional historical importance of Russia for Germany. But the determining factor for Bonn's advocacy of support for the Soviet (and later: Russian) reformers was that in the German view, the key to success or failure of the transition in Eastern Europe lay in Russia.

The threat of failed transitions in the East became Germany's single most important foreign policy concern during the G-7 summits from 1990 to 1993. Its objective was to orchestrate reverse cascade processes of stability and prosperity from West to East. In principle, this required a comprehensive collective security and prosperity approach involving all Eastern European countries including, importantly, Russia; given the realities of geography and politico-economic development, however, graduated programmes were inevitable.

Even so, the resources and political energies needed to meet the challenge were colossal. Thus, Germany from the beginning sought to involve all its Western partners in the effort. This included Japan. The G-7 summit therefore became an obvious forum in which German foreign policy could push for common efforts at supporting the twin transitions in Eastern Europe, including the Soviet Union/Russia.

At the time of the 1990 Houston Summit, Eastern Europe had changed beyond recognition. All former Warsaw Pact countries were moving towards democracy and market economies, and many had already developed links with the IMF. Prompted by a letter from Mikhail Gorbachev asking for support of his reform programme, and by one from Kohl, the meeting dedicated a lengthy session to the possibilities of economic and political cooperation with Moscow. But those discussions produced no firm decisions and few results of practical value, further weakening Gorbachev's already shaky position.

The 1991 London Summit was dominated by the war in the Gulf. At the same time, however, the full magnitude of the economic crisis in the Soviet Union had become apparent, causing general concern about the future of the reform process and about a mass exodus of people. And Germany had become increasingly worried about the scale of its financial commitments to Eastern Europe and the Soviet Union, and sought support from its allies for this burden.

The situation in the Soviet Union thus again imposed itself on the summit agenda. Bonn supported both the principle of a major Western support programme for the Soviet Union, and a meeting of the G-7 heads of state or government with Gorbachev. In the end, the latter took place, in spite of initial hesitations by the US government and Japanese resistance to the idea. The economic support package, however, failed to materialise, in part because Gorbachev did not deliver his side of the bargain: a strong commitment to radical economic change.(30) The summit settled for a six-point programme full of general declarations of intent but with few specific commitments. It did, however, offer the Soviet Union eventual membership in the IMF and the World Bank and committed the G-7 to continue the high-level dialogue with the Soviet leadership. But these symbolic gestures were not enough to strengthen Gorbachev's domestic position, and one Western expert, rather exaggeratedly, even accused the summit of having ". . . almost certainly encouraged the coup against Mikhail Gorbachev a month after the summit".(31)

By the time the summit was held in Munich in 1992, Mikhail Gorbachev had lost power and the Soviet Union had broken up. Yet the "G-7+1"dialogue initiated in London with the Soviet Union continued, now with Russia and its president, Boris Yeltsin. At the initiative of Kohl, Yeltsin was invited to Munich to a special session with the seven leaders, resulting in a 10-point programme of support. Again, however, this programme was short on specifics: the financial package put together by the G-24 in support of Russia's economic reform programme had already been determined at an earlier meeting in April 1992. The most concrete result of the deliberations in Munich was an action programme to improve the safety of Soviet nuclear power stations in Eastern Europe and the former Soviet Union. Germany had strongly pushed for such a programme, reflecting its particularly exposed position and strong domestic concern about environmental issues.

In Tokyo in 1993, the dialogue with Yeltsin was continued, following the pattern of the Munich summit. The support of its partners for Japan's position vis-à-vis Russia on the "Northern Territories issue" expressed at the previous summits had provided the quid pro quo to remove Japanese reservations about inviting Yeltsin.(32) Again, however, major details of the financial support programme for Russia had been resolved in advance of the summit. The summit communiqué thus essentially reconfirmed previous commitments, adding two relatively small ($3.4 bn) programmes in support of privatisation and restructuring.

From 1990 to 1993, Germany played a major role in the deliberations and agreements on G-7 support for the "historic changes"(33) in Eastern Europe and the former Soviet Union. It repeatedly took initiatives (on its own, but also jointly) on behalf of Eastern Europe and the Soviet Union/Russia.

Germany's strong support for summit statements on the war in ex-Yugosiavia should also be seen in this light: in Bonn's view, developments in Yugoslavia were disastrous not only in themselves, but also in view of their possible paradigmatic impact on other parts of Eastern Europe.

Germany's propensity to seek multilateral and institutionalised solutions also left its imprint on summit decisions and recommendations with regard to Eastern Europe. Thus, summit support for involvement of the G-24, the creation of the European Bank for Reconstruction and Development (EBRD), and the close involvement of the IMF and the World Bank in efforts to assist the economic transition in the East, certainly reflect German policy preferences, and often also German initiatives.

As in the German analysis, the key to successful transitions in the whole Eastern European region (including Russia and the other European successor states) ultimately lies in Moscow. Bonn repeatedly played the advocate of Soviet/Russian reformers at the summit. This introduced an element of tension with two other major summit countries-America and Japan. America initially hesitated to accept Gorbachev's reform efforts as real, and old suspicions continued to surface even after 1989. On the other hand, Washington shared much of Germany's concern and analysis, and had its own reasons for avoiding the humiliation of its defeated Cold War adversary and embracing the Soviet/Russian reformers in close cooperation and dialogue. Among those reasons were nuclear arms control and non-proliferation concerns and the need to secure Soviet/Russian support in the UN Security Council. Therefore, cooperation and coordination between Washington and Bonn worked by and large, and often worked well(34). Practical results of this close cooperation were initiatives such as the North Atlantic Cooperation Council (NACC) or the establishment of a centre for ex-Soviet nuclear scientists to prevent a proliferation braindrain. While fundamental policy differences on strategies towards the former Soviet Union thus quickly subsided, issues of burdensharing from time to time continued to cause irritations between the two capitals: Germany, which bore the brunt of Western financial assistance to Eastern Europe and the former Soviet Union, understandably was less than happy with US tendencies to take political initiatives (such as debt relief for Russia) which had to be paid by others.(35)

Japan's attitude towards the Soviet Union and its East Asian successor state, Russia, was more problematic. In its relationship with its northwestern neighbour, Tokyo found it difficult to free itself of the Cold War mould, and also tended to define this relationship largely in terms of the Northern Territories issue. Moreover, Japan lies opposite Russia's sparsely populated Siberian provinces, where it is hard to see how a failed transition in Russia can produce a direct threat to Japan. Finally, Japanese business and economic planners were more sceptical about the profitability and effectiveness of large-scale financial support for Russia.

All this resulted in marked Japanese reluctance to accommodate Soviet/Russian reformers. Bonn therefore repeatedly, and pointedly, made mention of Japan with regard to its desire for more balanced burdensharing. As the other summit countries were willing to support Japan's position on the Northern Territories issue, however, Japan's attitude towards G-7 support for Gorbachev and Yeltsin mellowed.(36)

A Tentative Assessment of the New Germany at the Summit

In sum, three conclusions can be drawn from this discussion of the new Germany at the summit:

Dependency on collective action. As seen, Germany continues to be dependent on multilateral approaches to international relations for a number of reasons: as a "trading state", it is particularly exposed to the implications of economic interdependence; as a "civilian power" saddled with a disastrous history, it has strong reservations about resuming traditional great power patterns of behaviour; and as a country located close to the new fault lines between rich and poor, between stable democracies and systems in political transition, it finds itself once more vulnerable to the new risks and uncertainties. For all these reasons, Bonn's foreign policy establishment has been naturally inclined towards the G-7 process, which has been perceived as a highly desirable mechanism for policy discussion and coordination. For Germany, participation in the G-7 summits, like membership in Western and international institutions in general, holds two further advantages: as in the case of Japan, (though less importantly, given Germany's firm integration into regional, Atlantic and international organisations even before 1975), it conveys elements of both rehabilitation and reassurance to see Germany exercise influence within a multilateral context.

The pursuit of multilateral diplomacy. Long used to the advantages and inherent potential of multilateralism, German diplomacy is particularly geared towards, and skillful at, such an exercise of influence. There is an almost instinctive tendency in Bonn to look for negotiated mutual adjustments, compromises and coordinated actions, if possible to be enshrined institutionally. This is not to say, however, that Germany is immune to temptations to put its own interests out of reach of negotiations, and thus make cooperation more difficult, if not impossible. Examples touched upon earlier include Germany's attitude towards monetary policy, but also its willingness to assert its own position on Yugoslavia.

The mobilisation of initiative and leadership is one of the key problems of any genuinely multilateral mechanism. In the context of recent summits, Germany's record on this score is mixed: economically, it has largely failed to exercise leadership, be it individually or jointly; politically, however, it has been able to secure both a high-level association of the reformist leaders in the former Soviet Union with the summit process, and substantial financial support for the economic transitions in Eastern Europe and the former Soviet Union. Admittedly, however, the support packages represented considerably less than met the eye-and Germany was less than successful in distributing the burden of financing those packages fairly. From the beginning of 1990 to mid-1992, Germany's bilateral assistance alone accounted for Ecu 7.5 bn, or 16 percent, more than that of the US and Japan combined. In addition, Germany also financed a substantial part of multilateral assistance: EC institutions supplied ECU 8.1 bn, other multilateral institutions ECU 13 bn out of a total Of ECU 47 bn commitments. In the case of the former Soviet Union, German bilateral aid alone accounted for about 55 percent (ECU 39.2 bn) of total aid commitments of ECU 71.8 bn between early 1990 and the end of 1992.(37)

German vulnerability. Being so dependent on and geared towards multilateral diplomacy, including the G-7 summits, Germany is also particularly exposed to the shortcomings and problems of this process. One frequently invoked shortcoming is the difficulty of mobilising leadership and initiative in genuinely multilateral settings-which the G-7 summits undoubtedly are. As argued elsewhere, this problem need not stifle effective cooperation in circumstances which do not involve military interventions. In particular, leadership and initiative can be found in situations in which actions and decisions are of a structural, long-term character, such as the organisation of Western support for the historic changes in the East.(38)

The problem of international leadership may therefore be more a reflection of other shortcomings than of an inherent structural difficulty. Among those other shortcomings, two seem particularly important: the very limited ability or willingness of governments to impose adjustments on their own societies and polities to the benefit of international order, and their propensity to calculate actions largely in response to domestic pressures and demands from organised interests and public opinion. Those two difficulties, in turn, appear to be rooted in what James Rosenau has termed the "crisis of political authority".(39)

The main problem with those domestic pressures and demands is not that they may favour narrow parochial concerns over broader international ones (although they no doubt often do): given the degree of transnationalisation of Western societies, domestic demands and public opinion will often take up international issues. Rather, those demands tend to be contradictory, thus favouring political gridlock or, as a way out, "shambolic" action. A good example of internationalist but contradictory pressures from domestic audiences resulting in shambolic action is provided by the former Yugoslavia: the grim violations of almost every conceivable human rights standard has led to calls for military action, yet tolerance for sustained intervention involving loss of lives appears to be very low. As a result, Western governments have opted for UN peacekeeping forces in a context which is clearly unsuitable for such an instrument.

The lack of credibility and authority of governments vis-à-vis their own electorates means that practically all G-7 summit countries have difficulties in mobilising domestic support for international initiatives, but also in finding partners in the G-7, once this support exists. The result has been unfortunate but predictable: a tendency at the summits to settle for actionism rather than decisive action, for agreements to disagree, for consensus verbiage in long communiqués short on policy substance. This tendency is apparent even when the summits have appeared to decide specific measures. Thus, quantitative financial support packages for Eastern Europe and the successor states of the Soviet Union have repeatedly included funds committed earlier to inflate the totals; actual disbursements have fallen far short of aid committed; and there has been considerable mismanagement of funds actually provided.(40)

The programme to enhance the safety of Soviet-type nuclear power stations in the East, deliberated at the Munich Summit, got bogged down for almost one year by bureaucratic infighting and institutional rivalries; and the centre for ex-Soviet nuclear scientists, set up as an American-European initiative, but strongly supported by the London Summit at the time of writing, still has to materialise.

The scathing criticism of summitry in the media(41) and among the specialists(42) in recent years seems justified (if sometimes overdrawn) even if one allows for the-often misunderstood- constraints and peculiarities of summitry. G-7 summits cannot be expected to decide; they have to be seen as part of a wider process involving a whole range of bilateral and multilateral consultations and negotiations. As Robert Putnam and Nicholas Baynes have persuasively shown, the success or failure of summits often has to be judged from some distance, and summits are therefore often misjudged in immediate assessments.(43) But recent summits have been a disappointment even as opportunities to catalyse agreements in other contexts and to focus the political process among the Seven. The uneasiness with the present, highly ritualised and media- oriented format of summitry is widespread even among the participants themselves, including the German government. But efforts at reforming the summits have so far produced little other than slightly shorter communiqués.

Reorganising the G-7: German Perspectives

On balance, the chances for revitalising the G-7 through reorganisation are probably not particularly good: being dependent on consensus among the participants and much bureaucratic and political compromise within governments, the G-7 process changes direction with the speed and agility of a supertanker. Still, the initiative of John Major has crystallised a widely shared uneasiness among G-7 governments about the process, and has brought the issue of reforming the process to the fore.

The uneasiness about the G-7 has, however, been limited within the German government: while there are specific misgivings, there is a general sense among decision-makers that the annual summits are useful, that they serve Germany's foreign policy interests well, and that the basic format of the summits and the preparatory process should be maintained. Bonn shares what already seems to have become the consensus view among the Seven for the Naples Summit: that it should be shorter (one and a half days), more informal and less pompous. Beyond that, reforming the G-7 process is not a high priority for the government, nor is there much pressure from the opposition or the media.

Still, within the ministries concerned (basically, the Ministry of Finance, the Ministry of Economics and the Foreign Ministry), considerable thought has been given to ways to reform the G-7 process. These views may conveniently be discussed under three sub-headings: summit preparation, follow-up, and the summits themselves.

Summit Preparation

By and large, Bonn seems to be satisfied with the present arrangements for preparing the summits. The present number of sherpas (four) is considered adequate. The main sherpa, the personal representative of the Chancellor, has traditionally been secretary of state in the Ministry of Finance. Until recently, it was Horst Köhler, presently, it is Gerd Haller. The sub-sherpa, equally traditionally, is a high-ranking official from the Ministry of Economics, presently Lorenz Schomerus. The Foreign Ministry is represented by the political director, presently Jürgen Chrobok, and another senior official. In this team, the political director has a somewhat special position: he sometimes meets separately with his colleagues from other G-7 countries, but he also participates in at least one full sherpa meeting. The rhythm of sherpa meetings (three to four per summit) is basically thought to be about right in Bonn; it is pointed out that these meetings help save time by making some other meetings unnecessary. There is a feeling that the number of working documents could be reduced, in line with reducing the number of topics covered by the summit, but that some papers will be needed. Bonn would also like to keep the possibility of special working groups in the context of preparations-their number has, in any case, been quite limited to date.


One point criticised by Bonn is the lack of institutional memory in the summit process. While the sherpas preparing for a new summit may informally start by taking stock of progress made since the last one, this stocktaking is not seen as sufficiently structured. This leads to the question of institutionalising the G-7. Here, however, the answer to the idea of a G-7 secretariat is an unequivocal "no". Bonn (like Tokyo) would rather strengthen the links and interactions of the G-7 with international institutions, particularly the OECD. There are already close links between the OECD Ministerial Meeting and Economic Committee in Special Session and the annual summits which follow them. At the Tokyo Summit, the OECD was explicitly charged with preparing studies on unemployment (now ready) for the G-7. Bonn would like to see more of this kind of arrangement, drawing on the OECD, but also on other international institutions such as the IMF, the World Bank or the EBRD. Those organisations would thus, n some sense, take on the functions of follow-up and monitoring, but also of setting the agenda of the G-7 with their analysis and recommendations.

Reforming the summits

In line with Germany's particular preoccupations outlined above, there are two major but somewhat contradictory considerations with regard to the substance of future summits. The first is to strengthen the original vocation of summits as meetings to discuss and coordinate macroeconomic policies, albeit with a view to emphasise medium-term, structural issues (such as ways to reduce unemployment). The second concerns Russia: as seen, Germany has, since 1989, consistently been Russia's advocate in the G-7; and this preoccupation has, if anything, become stronger.

Tensions between these two major preoccupations could be reconciled if the summits were divided into two halves: one half focusing on economics, the other half on political issues. This division is what Bonn would like to see: it would allow Russia to participate fully in preparing and formulating political recommendations, while confining its presence to this part of the summit. In fact, Russia does not have much economic weight in the world economy and its inclusion in discussion of issues such as world trade, world finance, the environment, etc. does not make much sense.

Bonn is presently pushing this formula for the Naples Summit, but the idea does not seem to have been fully accepted by other participants. And there are even differences in Bonn itself about associating Russia with the G-7: while the foreign minister, in particular, has strongly emphasised this theme, and has even talked of a "G-8", there is some dissent within the ministry of foreign affairs, and also in the other ministries which are more aware of the difficulties of supporting Russia effectively, of Russia's glaring economic weaknesses and of the potential for social and political upheaval.

Bonn would also-and less controversially-like to see a reduction in the number of topics dealt with each year. In Bonn's view, the summits should restrict themselves, at least in their formal discussions, to a few particularly urgent or particularly important themes. But there are no clear ideas about how this good intention can be implemented in the practical world of summitry, where each government has its own pet themes and domestic needs, and the others are reluctant to override such concerns.

Equally uncontroversially, Bonn would like to see shorter communiqués. In fact, there has already been some progress on this in recent years, but more can certainly be done. There is a strong conviction, however, that communiqués (albeit shorter ones) will be needed: they make it more difficult for summits to cover the same ground over and over again, and facilitate follow-up action.

Again uncontroversially, Bonn would like to give more space to informal, political discussions between the leaders. This, it seems, will already be tried in Naples. Bonn would probably not mind if some of these informal discussions are summed up by the chairman, rather than in a formal paragraph in the communiqué (although, as just noted, communiqués are considered essential in principle).

The present rules governing participation at the summits (which allow a maximum of three participants per country at each session: the head of state or government, the minister of foreign affairs, and the minister of economics and/or finance) are unobjectionable to Bonn. They do, however, pose occasional difficulties: as already seen, the G-7 process in Germany involves four major players and institutions-the chancellor (and his office in the chancellery), the foreign minister, the finance minister and the minister of economics. Coalition arithmetics have caused these four to come from all three coalition parties: Chancellor Helmut Kohl from the Christian Democratic Union, Minister of Finance Theo Waigel from its Bavarian sister party, the Christian Social Union, and Foreign Minister Klaus Kinkel and Economics Minister Günther Rexrod from the Free Democrats. But since there are only three coalition parties, the present formula allows all to benefit from the supposed opinion poll and electoral aura of summitry.

Although Germany set a bad example at the Munich Summit both in terms of pomp and bad handling of public relations, Bonn heartily agrees that summits have become too pompous and too expensive. But while some lip service is paid to containing media hype about summits, the reality is that politicians want publicity, and thus want the media to be there in force. One would like to see more favourable coverage, of course, but there are difficulties in explaining exactly how this could be achieved.

Perhaps the most important longer-term issue from the German point of view with regard to the G-7 process is membership. There seems to be a near-consensus among officials and politicians in Bonn that participation ought to be reviewed beyond the Naples Summit, with a view to bringing emerging economies into closer cooperation with the G-7. Russia already seems to have become a quasi-permanent part of the G-7, even though its precise position in the G-7 framework remains to be determined. From Bonn's perspective, China is another obvious candidate for closer dialogue, both economically and politically, and so is Indonesia and perhaps also India. In the case of Indonesia, which tried to meet with the G-7 leaders in Tokyo 1993 as the leader of the non-aligned movement, there was considerable sympathy in Bonn for a giving Indonesia's President Suharto a "better deal" than he eventually got. On the other hand, the G-7 is also seen as a body representing industrialised democracies; full membership should therefore also be tied to political credentials.

For reasons spelled out earlier, summit reform is a specialists' issue in Germany, about which few people think very deeply. Summit preparations are known in detail to only a handful of officials; the papers are not made known to either parliament or the opposition. And since the summit as an institution is generally considered in a favourable light in Germany, although its shortcomings and problems are of course criticised in the media and by the opposition, it has not really been put seriously into question. Within the small group of people involved, coordination (which rests with the ministry of finance) has generally been quite good, and there do not seem to be major policy differences between the ministries involved. Some nuances exist, of course, and have already been mentioned: for example, differences of opinion between the foreign ministry and the ministries of finance and economics about the G-7 relationship with Russia, or within the Foreign Ministry and among Ministries about opening the G-7 process to newcomers like Indonesia. But these differences are minor; by and large, German positions on economic, as well as political issues have not been controversial within the government.

There are, of course, differences between government and the opposition, although even there, the gap may appear much wider than it actually is. In a position paper distributed before the G-7 summit in Tokyo, Rudolf Scharping, Prime Minister of Rhineland-Palatinate, leader of the Social Democratic Party (SPD) and Helmut Kohl's adversary in the upcoming elections in October 1994, demanded that the summit return to the businesslike approach that marked the early years under Chancellor Helmut Schmidt. Otherwise, he argued, there should be no more summits.(44) This must, of course, be taken with a pinch of salt-as are other disagreements between government and the main opposition party. The Social Democrats have criticised the G-7 in general and the Bonn government in particular for not delivering enough on economic, political and environmental issues. Their criticism displays a more activist and interventionist rhetoric; if one believes their statements, the Social Democrats would like to see more governmental efforts at macroeconomic policy coordination, better support for Eastern European economic transformation, closer cooperation of the G-7 with Russia and a broader "world economic summit" to give greater attention to development issues. If one discounts the opposition rhetoric politically, however, what remains are positions which do not differ fundamentally from those of the present government. Indeed, the statement issued by Scharping after the Tokyo Summit was a model of caution on economic policy, steeped in free-trade rhetoric and moderate in exposing traditional Social Democratic concerns (Eastern Europe, development, global environment).

In the political debate about summits, summit reform is not a major issue. There do not seem to have been any serious efforts within the SPD, or elsewhere (the Greens, the Bundestag), to develop coherent and systematic ideas about summit reform. The same is true of research centres and think tanks.(45) Research on the G-7 process in general has also been limited; most of the contributions have come from economists and economic research institutes, and-in line with the prevailing, liberalist orthodoxy-they have often been sceptical about the opportunities and potential for macroeconomic policy coordination. Media coverage of summits tends to be critical-but few journalists demand their abolition: the criticism is largely confined to meagre results and excess of pomp.

All in all, Germany is basically satisfied with the process and patterns of G-7 cooperation as it stands today, give or take a few minor changes. To be sure, there is some anxiety about the somewhat meagre results of this process, and a feeling that the limited representation of emerging economies at the summit could become a problem. Still, this does not translate into a major offensive for reforming the G-7 summits: those who are in a position to think realistically and systematically about summit reform are also astutely aware of the inherent limits of summitry, and of the difficulties of changing its ways.

In fact, the limits of German reformism on the G-7 nicely mirrors the limits of the process itself, which-as illustrated here-has allowed Germany both to have things its own way (on Russia) and to get away with murder (on its inability to correct fundamental economic imbalances). The key to real and qualitative changes in the effectiveness of summitry probably lies outside the realm of what institutional reform can achieve. The most important causes for the flaws in summitry are rooted in the crisis of political authority within G-7 countries. Summitry may therefore have to await the return of credibility to politics and political leaders at home in order to make real progress. Until then, what summits can do and cannot do must be seen in perspective, and institutional and procedural reforms are unlikely to make much of a difference. The attitude of Germany towards summit reform reflects this reality. This attitude-rightly, it seems-recognises summits as limited but useful. For much of the value of summitry may well continue to rest on a negative argument: things would be worse without it.

(1) The title of this article is an adaptation of the title of S. Saito's excellent study Japan at the Summit, Japan's Role in the Western Alliance and Asian Pacific Co-operation (London: Routledge 1990).

(2) H. Hubel, Das vereinte Deutschland aus internationaler Sicht, Eine Zwischenbilanz, Arbeitspapiere zur lnternationalen Politik, no. 73 (Bonn: Europa Union, 1992).

(3) R.G. Livingston, "United Germany: Bigger and Better", Foreign Policy, no. 87, Summer 1992, pp.157-74.

(4) See, for example, the books by J. T. Bergner, The New Superpowers, Germany, Japan, the US, and the New World Order (New York: St. Martin's Press, 1991); J. E. Garten, A Cold Peace, America, Japan, Germany, and the Struggle for Supremacy (New York: Twentieth Century Fund, 1992); and L.Thurow, Head To Head, The Coming Economic Battle Among Japan, Europe, and America (NewYork: W. Morrow, 1992).

(5) The term was brought into wide circulation by an article by E. Luttwark, "The Rise of Geo- Politics", The National Interest, Summer, 1990, pp. 17-23.

(6) For a sober assessment of Germany's changed power position after 1990, see V. Rittberger, "Die Bundesrepublik Deutschland-eine Weltmacht?", Aus Politik und Zeitgeschichte, Beilage zur Wochenzeitung Das Parlament, B 4-5/1990 (Jan. 19, 1990), pp. 3-19.

(7) Cf. also D. Senghaas, "Die ungleichen Partner der Triade USA-Japan-Deutschland", Blätter für deutsche und internationale Politik, no. 9, 1993, pp. 1080-85.

(8) D. Julius, Global Companies and Public Policy, The Growing Challenge of Foreign Direct Investment (London: RIIA/Pinter, 1990), esp. pp. 20 ff, 43 f

(9) R. D. Putnam, N. Bayne, Hanging Together, The Seven-Power Summits (Cambridge, Mass.: Harvard University Press, 1984), pp. 1 ff.

(10) The background to this anti-inflationary bias (which some might call "obsession") is, of course, the historical experience with monetary devaluation during the German economic crisis of 1920-1923 and in the immediate postwar period. It should be noted that this dual experience of money turning to worthless shreds of paper represents a collective trauma shared by the people of East and West Germany.

(11) The original publication on those efforts was a book by Konrad Seitz, formerly the Head of Planning of Foreign Minister Hand-Dietrich Genscher, entitled Die amerikanisch-japanische Herausforderung, Deutschlands Hochtechnologie-Industrien kämpfen ums Überleben (Munich: Bonn Aktuell, 1991). See also the High Tech Policy Commission set up by the State of Baden- Württemberg and its final report (to which Seitz contributed): Zukunftskommission Wirtschaft 2000, Aufbruch aus der Krise (Stuttgart: Landesregierung von Baden-Württemberg, 1993).

(12) L. Rühl, "Die Interessenlage der Bundesrepublik: 'nationale' oder 'multilaterale' Interessenbestimmung", in K. Kaiser, H. W. Maull (eds), Die Zukunft der deutschen Aussenpolitik, Eine Diskussion, Arbeitspapiere zur Internationalen Politik, no.72 (Bonn: Europa Union, 1992), pp. 24-34.

(13) See R. N. Rosecrance, The Rise of the Trading State (New York: Basic Books, 1986).

(14) See H. W. Maull, "Germany and Japan: The New Civilian Powers", Foreign Affairs, Winter, 1990/91, pp. 101 ff.

(15) See T. Garton-Ash, Im Namen Europas, Deutschland und der geteilte Kontinent (Munich: Hanser, 1993).

(16) On the Library Group as a forerunner of the economic summits, see Putnam and Bayne, Hanging Together, chaps. 2, 4.

(17) See W. F. Hanrieder, Germany, America, Europe, Fourty Years of German Foreign Policy (New Haven: Yale University Press, 1989), p. 368.

(18) See W. R. Smyser, "Goodbye, G-7 ", The Washington Quarterly, Winter 1993, p. 1528.

(19) Putnam, Bayne, Hanging Together, pp. 201 ff.

(20) Ibid., p.16.

(21) See H. Schmidt, Menschen und Mächte (Berlin: Siedier, 1987), p. 214.

(22) R.D. Putnam, "Diplomacy and Domestic Politics: The Logic of Two-Level Games", International Organization, vol. 42, no. 3, Summer 1988, pp. 427-6

(23) K. Kaiser, Deutschlands Vereinigung, Die internationalen Aspekte (Bergisch Gladbach: G.Lübbe, 1991), p. 34.

(24) The environment made its first major appearance at the 1985 Bonn Summit. Germany, as the host nation, used this opportunity to push for inclusion of environmental issues which resonated strongly in German politics.

(25) See, for example, Financial Times, 4 May 1993.

(26) N. Bayne, "The Course of Summitry", The World Today, February 1992, pp. 27-30.

(27) See, for example, Frankfurter Aligemeine Zeitung, 27 April 1992 and Financial Times, 26 April 1992.

(28) Declaration of the Chancellor at the Conclusion of the Tokyo Economic Summit, Bulletin, No. 64, 1993, pp. 678 and 678.

(29) "After the Debacle" Time, 16 August 1993, pp. 15ff.; T. de Montbrial, P. Jacquet (eds), RAMSES 1994 (Paris: Dunod, 1993), pp. 187ff.

(30) H. Vogel, "Der Londoner Gipfel und die Sowjetunion", Aussenpolitik, no. 4, 1991, pp. 315- 25.

(31) Smyser, "Goodbye, G-7", p. 22.

(32) M. Tidten, "Japans neue Internationale Rolle", in Weltordnung oder Chaos?, (ed) A. Zunker (Baden-Baden: Nomos, 1993), pp. 286-301.

(33) Baynes, "The Course of Summitry".

(34) Frankfurter Allgemeine Zeitung, 4 January 1994.

(35) Financial Times, 19-29 October, 26 October, 1991.

(36) Tidten, "Japan's neue Internationale Rolle".

(37) The Economist, 17 April 1993, p. 24.

(38) H.W. Maull, "A German Perspective", in Multilateralism and Westem Strategy (ed) Michael Brenner (London: Macmillan, in press).

(39) J. N. Rosenau, Turbulence in World Politics, A Theory of Change and Continuity (New York: Harvester/Wheatsheaf, 1990), chap. 8.

(40) Admittedly, only part of the blame for this should be assigned to the donor countries. Problems of absorptive capacity and shortage of appropriate institutions in the receiving countries has often made spending money on meaningful projects less than easy. Still, bureaucratic delays, lack of coordination, waste through duplication and a host of other factors under the control of donor countries has played a major role in making financial assistance to the East much less, and much less effective, than appearances suggested. See Institute for East West Studies, Moving Beyond Assistance, Final Report of the IEWS Task Force on Westem Assistance to Transition in the Czech and Slovak Federal Republic, Hungary and Poland (New York/Prague: Institute for East West Studies, 1992

(41) See, for example, "Where Have All the Leaders Gone?", Time, 12 July 1993, pp. 17 ff.

(42) See, in particular, G. J. Ikenberry, "Salvaging the G-7", Foreign Affairs, Spring 1993, pp. 132-9 and Smyser, "Goodbye, G-7".

(43) Putnam and Bayne, Hanging Together, chap. 9.

(44) Cf. Presseservice der SPD, No. 407/93, 6 July 1993.

(45) The closest to a systematic analysis of the summit as a procedure is contained in a paper by H. Maull and A. Volle, "Der Gipfelproze", Der Gipfel in München, Analysen aus dem Forschungsinstitut der Deutschen Gesellschaft für Auswärtige Politik, Bonn 1993, pp. 1-14.

Source: The International Spectator, 29, No. 2 (April/June 1994), Special Issue, pp. 113-139. Copyright ©, Istituto Affari Internazionali. Reproduced by permission of Istituto Affari Internazionali.

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