Why Germany raises ire in a struggling Europe

As the most powerful economy in Europe, Germany has traditionally had a proud place at the heart of the European Union. But the signs – from protests to newspaper editorials – are increasing that its less-powerful neighbors are growing weary of receiving dictates from Berlin.

Founded to ensure an end to war in Europe, the EU is descending into a war of words as many worry that what might be good for Berlin is bad for others. And the debate over how to proceed is coming into sharp focus on the eve of an EU summit starting Thursday that is aimed at preventing the collapse of the euro. After months of promises, demands, claims and counterclaims, the EU is now being led toward something approaching a fiscal union, a move proposed and primarily designed by Germany and France.

Gerry Feehily, a journalist and novelist based in Paris, says Germany is bearing the brunt of criticism over the handling of the debt crisis. "The Germans are damned if they do, and damned if they don't," he says. "Everyone is waiting for the Germans to come up with the solution to the crisis, and at the same time [is wringing] their hands about the increase in German power to dominate Europe."

Others are not ready to condemn Germany, saying that if anything, the country's inaction is a greater worry than its flexing of muscle.

"I will probably be the first Polish foreign minister in history to say so, but here it is: I fear German power less than I am beginning to fear German inactivity," said Polish lawmaker Radoslaw Sikorski in a speech on Nov. 28 – an almost unimaginable sentiment from a country that suffered so much under foreign domination.

Stephen Kinsella, economist at the University of Limerick, Ireland, says it's important to see it from Germany's point of view: "Germany is considering the downside," he says. "What if it gets its taxpayers to pay for what they see as the debts of profligate banks in profligate countries? Will this repair the imbalances in the eurozone? Will this stop it happening again? Clearly not."

But German actions so far, including blocking Eurobonds issued by the European Central Bank (ECB) and demanding stringent austerity measures from other countries, are verging on inscrutable, says New York-based economics commentator Doug Henwood.

"It's kind of hard to see what Germany wants. I've been asking lots of smart people what they're trying to do for months and there's no consistent or convin­cing answer. Ideology? Material interest? Habit?... Why would an export-driven economy want to drive its nearest markets into deflationary depression?" he asks.

Britain has always been suspicious of Europe, with powerful Euroskeptic blocs in both the Conservative and Labor parties. But the new wave of anti-German feeling is coming not from rehearsed ideological positions or memories of World War II so much as from newfound experience of Germany's reach into its neighbors' national economies and politics.

Sentiment is not uniform across the EU, or even the afflicted economies of the so-called PIIGS (Portugal, Ireland, Italy, Greece, and Spain). German Chancellor Angela Merkel, however, has become something of a lightning rod for criticism.

Tonia Mastrobuoni, an economics commentator for the daily newspaper La Stampa, believes the criticism in Italy leveled at Germany is tempered both by a Europhile tradition and by the nation's awareness of its own faults. "Italians feel somehow guilty for their nation's finances. They are well aware they brought the crisis upon themselves by living for a long time above their means, which makes German criticism acceptable," she says. "On the other hand, we must remember that here people trust Europe and understand the EU has made things better for Italy."

Despite this, Chancellor Merkel is unpopular among former Prime Minister Silvio Berlusconi's supporters, who blame her for their leader's fall and were angered by her display of disrespect toward him.

Similarly, in Spain, criticism is largely restricted to Ger­many's leaders – mixed with criticism of Spain's own outgoing government.

"There isn't an anti-Ger­man feeling in Spain, but there is a very sharp criticism of Angela Merkel's leadership and her negative role in this crisis," says José Ignacio Torreblanca, head of the Madrid office at the European Council on Foreign Relations, a Pan-European think tank. "It's important to differentiate both things. Germany is a successful and admired country."

In Italy and Spain, new governments have recently taken over. If, as is the case in Ireland, the honey­moon period ends with the sense that they are powerless in the face of German political and economic might, discontent is likely to follow.

"There is a new problem in Europe and how it operates. One cannot ignore that," says Olaf Cramme, director of the London-based think tank Policy Network.

Mr. Cramme, himself German-born but a longtime resident of Britain, says too little recognition is given to Merkel's strategy of making European countries reform by the only means she sees: the markets.

"There is a deliberate attempt to fail to recognize why she is doing what she is," he says. "The institutional pressure available [within the EU] is so low that if you remove the market pressure, nothing will happen in some of these countries."

Anti-German sentiment is strongest in Greece, where it appears to be inflamed by memories of World War II. Merkel has been depicted as a Nazi in political posters and street protests have seen Greeks dressing up in Nazi uniforms and as Hitler.

"Greece has a very particular history with Germany that we don't," says Ben Tonra, a security specialist at University College Dublin in Ireland.

Speaking to Euronews in October, protest organizer Dimitris Kollatos said: "Ger­many has taken over the power of Greece. Our grandfathers and fathers fought Ger­mans and suddenly the Germans are coming and buying Greece at humiliating prices."

With Germany's strong influence on ECB policies now clear for all to see, this motif of a rising Reich, however overstated, is popular with many newspapers and politicians in Europe. Against this, calls for measured assessments are coming from unexpected quarters, including Irish businessman Declan Ganley.

Mr. Ganley led the "no" campaigns in Ireland's referendums on the EU's Lisbon Treaty in 2008 and 2009. The treaty effectively created an EU Constitution, but Ireland's own Constitution demands a referendum on any changes. Despite the support of Ire­land's political mainstream, the Irish voted against the treaty in 2008. Asked again in 2009, faced with the messages of "Yes for jobs" and "No means a two-tier Europe," they voted in favor.

Ganley went on to found the unsuccessful Pan-European political party Libertas and is routinely portrayed as a Euroskeptic, but his answer to the crisis is "more Europe" – albeit configured differently. "We need a federal union, or Europe will collapse completely," he says. "We need total reform of EU governance in order to do that – we need a Europe of Edmund Burke, not Robespierre."

He says the decision to protect banks at the expense of national economies is the root of the problem. "It was done to prop up insolvent banks across Europe, but particularly Germany, France, and the UK. The failure of those banks was transferred to the taxpayer. That is what has produced an understandable – and unnecessary – resentment toward foreign governments."

That resentment came to the fore in Ireland after news broke on Nov. 18 – just a year after Ireland's humiliating bailout from the "troika" of the EU, the ECB, and the International Monetary Fund – that the country's forthcoming budget was passed to the German parliament (and from there, to other EU states) before Ireland's Parliament had a chance to debate it.

"How dare the Germans get to discuss our budget before we do ourselves!" was the mood in Ireland. Opposition politicians thundered and angry calls flooded talk radio. Sinn Féin party leader Gerry Adams, speaking in Parliament, mocked the government by asking a question in Gaelic and broken German.

Ireland, not a traditionally Euroskeptic nation, has grown wary of the EU in recent years, with a growing sense that the country was bounced into a bailout it didn't need in order to protect German banks.

Award-winning novelist Colm Tóibín, noted for his pro-European stance, says Ire­land's attitude toward the EU has been one of getting what it can: "We saw Europe as a gravy train, [and] when treaties came along that had no benefit to us, we rejected them. Public sentiment [on the EU] is very easy to affect, with benefits or threats."

Nonetheless, Mr. Tóibín says it is easy to understand how the anti-EU mood could morph into an anti-German feeling. "There is a sense that the German government is not involved in any 'give' on this, [that] it's just looking after German interest rates," he says. "There may be some stupidity around, but that is a legitimate concern."

• Evangeline O'Regan in Madrid and Anna Momigliano in Milan, Italy, contributed to this report.