Turning the EU into a Life Insurance Policy

Tectonic changes within the EU

To assess this claim to leadership, it is nec­essary to look at the new balance of power in the EU. Traditionally, the EU’s centre of power has been the Franco-German alliance. However, recent changes have weakened this traditional core. Ini­tially, the EU’s east­ward enlargement created a new eastern periphery, while the financial crisis strength­ened Germany’s influence but weakened southern eurozone states. Similarly, Brexit initially appeared to reinforce the Franco-German core. However, the relationship between the EU’s centre and its periphery has since significantly changed, driven mainly by three developments.

Thematically flexible partnerships for European policy interests

Germany’s current core interests in Euro­pean policy are primarily to improve the EU’s resilience and defence capabilities, enhance the competitiveness of Germany’s and Europe’s economies, secure Germa­ny’s trade interests as an exporting nation, and gain control over migration flows. To ad­vance these interests, Germany must demonstrate leadership by forging new coa­litions in order to make progress, even if it involves risks, rather than just reactively organising a presumed European political consensus.

The volatile external and internal European environment necessitates ambitious, agile, and thematically focused partnership strategies. Although Germany must main­tain its ability to engage with all parties, it should prioritise impactful and forward-looking coalitions (“coalitions of the will­ing”) when necessary. Achieving tangible progress should be prioritised over maxim­ising EU cohesion.

Economic competitiveness and economic partnerships

In European economic policy, the new Ger­man government’s coalition treaty has a strong overlap with the EU’s competitiveness compass. To achieve its aims regarding competitiveness, Germany should forge alliances with member states interested in strengthening traditional industrial sectors and with which the German economy has strong ties (eastern central Europe, Roma­nia). Simultaneously, close coordination should be pursued with countries receptive to a more pro-active industrial policy, such as France and Italy (through a renewed Franco-German Manifesto for Industrial Policy and trilateral coordination). A third approach involves partnerships with coun­tries that maintain high innovation poten­tial (northern European countries, the Baltic States, the Netherlands, Ireland, and the “New Hanseatic League”). In preparation for negotiations on the Multiannual Financial Framework (MFF), an early effort should be made to reconcile interests with the “frugal” countries of northern Europe, as well as the Netherlands and Austria. Germany cannot expect to rely on perma­nent majority coalitions in trade and inter­national economic policy. External attempts to create divisions (e.g. by the United States), conflicting interests (such as dependence on exports to China and other markets), and differing interpretations of the international order (e.g. by Hungary and Slovakia) will necessitate the pursuit of selective and tem­porary partnerships. Beyond its core liberal orientation, the EU will need to geopoliticise and secure aspects of its trade and eco­nomic policy within the global landscape. Germany should not only contribute to de­fining this direction through its economic influence, but also actively shape it politi­cally.

Stabilise asylum and migration policy

The dynamics of European migration policy are confusing. Since the adoption of the Pact on Migration and Asylum, various coa­li­tions – led or inspired by countries such as Italy, Denmark, Poland, and Greece – have introduced numerous new proposals and initiatives. Germany, conversely, should serve as a stabilising force and prioritise the implementation of existing measures aimed at improving migration management. This stance presents ongoing challenges. Diver­gences in the implementation of stricter migration and asylum policies will persist, particularly concerning rejections at inter­nal borders and further restrictive measures at the EU level, such as the establishment of return centres in third countries and the suspension of asylum applications at exter­nal EU borders. Germany’s essential interest in a stable and functioning Schengen zone is paramount. At the same time, more pres­sure must be exerted on other EU states to ensure that they strictly apply the applicable law, including in matters of responsibil­ity-sharing for asylum seekers. Instead of maintaining and extending internal border controls and unilateral measures to shift more asylum applicants to Germany’s neigh­bours, a proportionate tightening and deep­ening of the EU’s return policy can be used here to restore more intra-European co­opera­tion, especially with Italy.

Cooperation strategies

Germany does not consider the transfer of competences and treaty changes as taboo if they enhance the EU’s legitimacy and capac­ity to act. However, many national govern­ments are more than reluctant about the EU’s evolution into a political union. Never­theless, unlike the United Kingdom, they will not withdraw (voluntarily). Consequently, Germany will need to engage with “difficult partners” on an individual basis. Cooperation with such “non-like-minded states” necessitates a nuanced approach. Furthermore, engaging with “dis­sident” states on a case-by-case basis may mitigate their incli­nation to form coalitions or blocs against Germany. Here, the German government should capitalise on the differences be­tween various far-right parties, also by con­tinuing to draw a clear line with regard to radical anti-EU parties.

There is also the ongoing task of inte­grating and involving the smaller member states. The new relevance of security in European politics tends to strengthen the political weight of larger member states, which can bring in resources that matter for defence policy, armaments, and military strength, all the way up to France’s special role as nuclear power. By approaching smaller partners on this issue in particular, Germany can both contribute towards strengthening unity, and also increase its credibility and improve its chances of assum­ing the lead. To this end, bilateral dialogue formats must be consolidated and framed in terms of European and security policy.

Flanked by strong EU institutions and national coordination

Strong institutions are essential for an effec­tive EU. They also provide a safeguard against political crises in individual member states, particularly in areas where qualified major­ity decisions are possible. It is equally im­por­tant to acknowledge that most EU mem­ber states oppose both a significant leap towards a federal state, especially given the current pressures, and treaty changes. Po­litical goals set out in the recent German coalition agreement – such as the exten­sion of majority voting (see SWP Comment 16/2024) and institutional reforms in antici­pation of the next enlargement – remain long-term objectives. In any case, the new government’s positions on EU enlargement fit in with the overall pragmatic-gradualis­tic approach. Berlin’s main focus is on grad­ual de facto integration before full mem­bership. The EU system has demonstrated its capacity to evolve even without treaty changes during the crises of recent years – a factor that Germany should consider in its European policy (see SWP Studie 11/2024). The European Council has become the politi­cal centre of the EU. Either the 27 mem­bers succeed in reaching a consensus there or core new policies and reforms will fail or be put on the back burner. How the Federal Chancellor presents himself in the European Council, the tone he sets, and the content he advocates largely determines how German European policy will be per­ceived by peers in Brussels and the public.

Strengthening European policy coordination

The new German government wants to improve European policy coordination. The Head of the Federal Chancellery is to con­vene a weekly “EU monitoring” meeting of state secretaries to proactively identify and resolve interdepartmental and intra-coali­tion conflicts concerning EU projects. Cross-cutting issues such as the MFF and new EU defence policy initiatives should be addressed directly at the cabinet level. This is at least as important as the installation of a National Security Council within the Chancellery.

The “German vote” phenomenon – characterised by abstentions due to internal coalition and departmental disagreements, and last-minute shifts in negotiating posi­tions resulting from internal disputes – has undermined German interests in Brus­sels. Although it is a key actor that many partners look to for direction, Germany has complicated decision-making in significant instances. For the first time, three of the four key ministries for EU policy – the Chan­cellery, the Foreign Office, and the Ministry of Economy – are led by the chancellor’s party (CDU), with the fourth being the Finance Ministry. The Chancellery will not be entirely responsible for coordination, but this setup has the potential to make Germany’s EU policy more agile and co­herent. For this, the head of the Federal Chancellery in the rank of a cabinet minis­ter, and the chief coordinator of EU dos­siers, would have to work closely with the Chancellor’s sherpa, who prepares the Euro­pean Council and the G7 meetings, for ex­am­ple. This person will be a key interlocutor for the sherpas of other EU leaders. In close coordination with the permanent rep­resentation in Brussels, the coordinators of German European policy should therefore resolve internal coalition differences at an early stage and also launch (or prevent) ini­tiatives together with partners. The critical precondition for any improvements to the coordination process is that all partners of the governing coalition commit to reaching common positions on key European dos­siers early and maintain a common line in subsequent negotiations.

Supporting the European Commission

The von der Leyen II Commission assumed office with enhanced authority, bolstered by the crises of recent decades and the relative weakening of the Franco-German partnership. Concurrently, many member states have grown increasingly wary of the Commission. Significant reforms to the EU budget, new defence policy funding, and powers to allocate funds and oversee spend­ing could further consolidate the Commis­sion’s position relative to member states.

However, regarding the Commission’s role as a neutral arbiter within the EU, Ger­many should insist on shielding policies from the increasing politicisation on the part of the Commission’s leadership. This includes the initiation and consistent en­force­ment of infringement proceedings. At the same time, cooperation with the EP has also become more complex. Its changing majorities now create more uncertainty, but they also offer scope for forming new coalitions in legislative and budgetary nego­tiations, for example to strengthen com­petitiveness.

Specifically, major decisions concerning key projects – in areas such as security and defence policy, competitiveness, and cli­mate and migration policy – should be carefully prepared early on, with Germany assuming a co-leadership role. This will help align the Commission with a solid con­sensus among member states and enhance the legitimacy of its work. The Commission, in particular, should strive to ensure that its proposals secure stable majorities in the Council and the EP that exclude radical and anti-EU parties. As a member of the Euro­pean Council, the Commission President can be involved in building this political consensus from the outset, gaining insights into the general direction. Furthermore, the German gov­ernment should emphasise to the President that empowering the High Representative, Kaja Kallas, in her dual role within the Commission and the Council would enable her to act more effectively on the external stage and speak authoritatively for the 27 member states. Therefore, exter­nal action dossiers must be coordinated with her. Regarding the President of the European Council, António Costa, a clear and pragmatic role as the EU’s highest-level representative needs to be defined, particu­larly with a view to external actors, such as when the Weimar Plus format comes into play when dealing with the United States or in negotiations involving Ukraine.

In favour of pragmatic but ambitious functionalism

With the end of the Pax Americana, a new era is dawning for the EU (see SWP Studie 3/2025). It is in Germany’s vital interest to develop the EU into a life insurance policy for its security and economic competitiveness as well as a key guarantor of constitutional resilience across member states. This transformation must occur swiftly and be tailored to specific policy areas. Germany has played a major role in shaping the EU’s existing institutions, procedures, and policy areas. They reflect traditional German pref­erences and are the result of continuous German involvement in the context of treaty amendments and EU enlargement. Germany has gained a lot, and thus also has much to lose. Consequently, Germany fre­quently acts as a force defending the status quo and the acquis, prioritising cohesion and the EU’s functional capacity. For in­stance, during the Brexit negotiations, the German government consistently backed EU negotiator Michel Barnier’s stance and opposed London’s “cherry-picking” strategy. In the sovereign debt crisis, Berlin firmly resisted calls for joint debt.

However, Germany has not always been a model of compliance. It has violated EU rules and pursued its own course when its economic strength permitted or when deci­sions were deemed matters of national inter­est. Furthermore, the reality that sig­nificant progress within the EU is seldom achieved without or against Germany en­courages a cautious and passive approach from Berlin. To regain a leading role in the EU, the German government must articu­late clear political positions in Brussels.

Priorities for a proactive German European policy

If Germany wants to recapture a leading role in the EU, the German government should adopt clear political positions in Brussels. In a world of rapid change, there is a need for a European policy that com­bines the will, capacity, and speed to act. Following are three key recommendations.

First, the will to act is demonstrated when the Chancellor and ministers main­tain a strong interest in EU affairs and present unified positions. The German gov­ernment aims to substantially improve in­terministerial coordination on EU matters. The new “EU monitoring” mechanism, over­seen by the Head of the Federal Chan­cellery, should be utilised to resolve inter­nal disagreements at the cabinet level regarding significant and cross-cutting issues as early as possible, and to establish clear stances on German European policy while respecting the principle of interminis­terial responsibility. By adopting consistent and predictable positions, Germany can provide direction, exercise leadership, and restore its credibility within the EU.

Second, the capacity to act can be strength­ened through a revised partnership strategy that facilitates effective engagement in European politics. The German government should cultivate thematically flexible, agile, and effective coalitions instead of primarily focusing on cohesion and the lowest com­mon denominator. Examples include the Weimar Plus format in security and defence policy, as well as various economic partner­ships with regions such as eastern central Europe, countries such as France and Italy, and innovation-driven nations in northern Europe. Germany should proactively devel­op partnerships tailored to specific policy areas in order to achieve tangible progress. In particular, security-related coordination among member states and – within their respective competences – with EU insti­tutions must be both intensified and care­fully balanced. Different approaches will be necessary, particularly during the initial phases and in the context of the upcoming critical negotiations concerning the struc­ture of a more resilient “post–war period”. This will require exceptional flexibility and creativity from Germany.

Third, speed is crucial, necessitating a willingness to move beyond the require­ment for unanimity. In functional areas, prioritising the Community method of strengthening the EU via majority decisions is essential. This is applicable, for example, to the Capital Markets Union project, for which rapid progress is vital due to its in­creasing significance for security policy. Similarly, industrial and technology policy – with the greater involvement of private-sector actors – will become a lasting, insti­tutionalised component of European secu­rity policy. The German government should proactively contribute ideas for a compre­hensive reform of the EU budget’s revenue and expenditure framework – an area of core interest to Germany. Increased invest­ment in defence capabilities and improved infrastructure should be leveraged to stimu­late growth that benefits the European economy. In the event of gridlock, Germany should be willing to utilise the instrument of enhanced cooperation within smaller groups of member states.

Overall, Germany will need to invest its political capital, leadership, and financial resources in these multifaceted and chal­lenging endeavours to transform the EU into a reliable “life insurance policy”. In this context, in the upcoming legislative period, German European policy should embrace a pragmatic yet resolute functionalism that is continually guided by the prin­ciple of strategic autonomy.