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Germany and the G20

Chunrong Zheng
Director, German Studies Center, Tongji University, Shanghai, China
August 25, 2016

A modified version of a paper prepared for an international workshop on "Making Global Governance More Effective and Inclusive: The G20 and The United Nations," hosted by the School of International Relations and Public Affairs of the Shanghai International Studies University (SISU), the Center for G20 Studies of SISU, and the G20 Research Group of the University of Toronto, Canada; co-hosted by the UN Association of China and the Shanghai UN Research Association; and sponsored by the Lowy Institute for International Policy of Australia and the University of Toronto's Munk School of Global Affairs' Asian Institute, Bill Graham Centre for Contemporary International History, East Asian Studies Program, David Chu Asia-Pacific Program, and the Department of Political Science, held at SISU, Shanghai, China, on August 25-26, 2016.

Because Germany will hold the G20 presidency on 7th and 8th July next year in Hamburg, I am asked to give some opinions about the Germany's position on G20. In the following speech, I will refer to three related issues: First, I will outline the general attitude of Germany to the Global Governance, then I will review the role of Germany in the G20 evolution process. At the end, I will look at the Germany's G20 presidency, by discussing the possible agenda and the cooperation with China, which also concerns the relationship between the developed countries and emerging powers.

Germany's Position on Global Governance

Since the end of World War II, Germany has been deeply committed to globally coordinated solutions for global challenges. And it has been embracing multilateral engagement in both formal and informal forums of global governance from the very beginning. This characteristic hasn't changed after the German reunification. As a civil power and a geo-economic power, it benefits from a stable political and economic global environment. Thus, Germany has been a strong supporter of governance through international institutions.

Because of the rising influences of the emerging powers, keep being engaged in and committed to international dialogue in the various existing channels of global coordination and cooperation, such as the G7/G8 and G20, remains central to the German position in advancing global governance[1]. As a Federal Government document in 2012 stated: "The German Government advocates networked global governance along with orderly cooperation between international groupings and seeks to build effective international institutions … Germany wants to address the issues of globalization together with its partners, by means of multilateral cooperation. This multilateral network is complemented by intensive and target-oriented bilateral contacts as well as cooperation with regional organizations…. Germany would like to work with its traditional partners and the new players in world affairs to nurture effective multilateralism in international forums and as part of global governance. Germany would like to call on the new players to join it in this endeavour"[2].

Germany has repeatedly taken initiatives in new formats like G7/G8 or G20 to develop solutions to emerging security and economic issues. However, this does not affect the importance of established organizations. The UN, NATO, the EU and the OSCE will continue to provide the primary framework for Germany's actions. In other words, the new formats are an important, more recent addition to established structures such as the UN but not a competitor to them. As a document of the Federal government stated: "Germany welcomes international initiatives designed to enable greater coordination and rule-based solutions in specific fields. In this connection, we foster active exchange between forums, e.g. between the UN and the G20. We also want to establish a dialogue between the G20 and other groupings such as the 3G (Global Governance Group) and its member states, Singapore, Chile, Malaysia, the United Arab Emirates, Viet Nam and Qatar"[3].

As I mentioned before, the pursuit of cooperative globalization with and through the UN is a key element of Germany's foreign policy. Germany wants to adapt the Security Council to the political realities and the distribution of power in the modern world. Till now Germany hasn't succeeded in becoming a permanent member of the Security Council. This wish now becomes less realistic, but it is also Germany's hope to facilitate pending reforms by using the different G- or new formats. For example Germany was in favour of China's being granted greater voting shares in the IMF and World Bank; Germany also supported the inclusion of the Renminbi in the basket of currencies in the IMF's special drawing rights. Furthermore, Germany is also the largest shareholder from outside the region in the on China's initiative founded Asian Infrastructure Investment Bank (AIIB).

Germany's position on G20

In the G20 evolution process Germany has also made a great contribution. It was in the wake of the 1997 Asian financial crisis that Germany initiated the launch of the G20 as a new forum among finance ministers and central bankers on economic and financial policy coordination, at which time it was during the 1999 German G7 presidency under Chancellor Gerhard Schröder. In winter 2008 the G20 was constituted in a new summit format of heads of state and government to face the global financial crisis.

However, prior to the crisis-driven establishment of G20 summit, Germany had already tried to include major emerging economies in an intensified dialogue within the framework of the traditional forums of global coordination. It was under the German G8 presidency in 2007 that Chancellor Angela Merkel launched the Heiligendamm Process, the G8+5 process (G8 countries plus China, India, Brazil, Mexico and South Africa), in order to encourage closer cooperation with some of the new players on the world stage. The fact was: Germany had acknowledged the role of the rising powers and the need to include them in the relevant informal forums as well as to strengthen their role in the formal international organizations, in order to advance the agenda of global cooperation it favoured.[4] In this way the pressure on these countries to reduce economic protectionism and make an effective environmental policy could be increased.

Even after the establishment of the G20 summit format, Germany was and remains a driving force behind the inclusion of new players in actions to further global governance.

Now the German Government is pleased that the G20 is firmly established as a key forum for international cooperation on global economic and financial issues. And it is keen for the group to expand its remit to cover other global challenges.[5]

Agenda of Germany's G20 Presidency and the Chinese-German cooperation

On 1st December Germany will take over the G20 Presidency officially. As the Federal Government already announced, besides the traditional G20 issues like global economy, trade, financial regulation and tax policy, Germany wants to include other current global challenges. These could be climate and energy, sustainable development, anti-pandemic, worldwide standards for labor protection, women-Promotion, anti-corruption, Refugee and migration[6]. This Agenda will be concretized in the next few months, especially under the coordination of the Think tanks Kiel Institute for the World Economy (IfW) and German Development Institute (DIE).
It should be stressed that Germany paid great attention on the development issue at the very beginning. For example, the current government coalition contract in 2013 stated: "The development policy should prominently tackled in the agenda of the G8 and G20 and the summit commitments in the development policy should be implemented sooner"[7].

The fact, that China and Germany hold the G20 Presidency successively, gives them a new "window of opportunity" and platform for intensifying cooperation. China und Germany have already coordinated in the framework of the G20 and will continue to do so. They do it not only in the G20 troika, but also bilateral. As Chancellor Merkel already mentioned in her speech in June 2016 during her visit in China: "We are very interested in working with China in this process. Germany will host next year's G20 summit. This is why we want to carry parts of the agenda forward, thus creating close cooperation"[8].

In Germany's view, the fact that China is playing a constructive role internationally is simply the logical outcome of its greater economic strength. But Merkel has also stressed: "With economic strength comes greater responsibility"[9].

China and Germany have common interests and shared views in many fields. What's more, both countries aim to strengthen the G20's role as the premier forum for international economic cooperation. In the joint declaration of the 4th round Chinese-German government consultation from the June 2016, both parties want to intensify the coordination and cooperation in macro economic policy, to fulfill the growth potentials through the structural reforms, innovation and other approaches, to utilize the chances arising from the industrial revolution and digital economy, and to promote the international trade and investment. They also wish to improve the Global Governance generally, promote the climate protection and address other core international challenges, like health and fight against refugee causes, the construction of an open economy and the implementation of the Agenda 2030[10].

But the remaining interesting question is whether China and Germany could forge a coalition in the G20 or even take the co-leadership. At least China and Germany could use their denser networks and dialogs arising from their comprehensive strategic partnership. The scholars' analysis of the summit outcomes and its members' preferences suggests that emerging countries, when they don't hold the presidency, have not been able to influence and even shift the formal agenda of the G20 summit single-handedly. On the other side, the G7/G8 members have not necessary acted in concert constantly. This has given emerging countries room to manoeuvre at the G20. Big emerging countries' leeway to shape outcomes has so far largely depended on the ability to strike coalitions among each other and with G7/G8 countries.[11] And the Chinese-German cooperation could theoretically strike the balance for G20 countries, combined with priorities from industrialized and emerging powers. I know some scholars argue that the middle powers should be attached with this role[12]. But I think the Chinese-German format has better chance to set the pluralistic agenda and to make pragmatic compromises. Anyhow, whether this Chinese-German informal coalition could forge a winning coalition or not, would be the case of the empirical research after the Hangzhou and Hamburg Summit or beyond that.

Notes

See Susanne Vogt, "Germany and the G20", in Wilhelm Hofmeister (ed.), G20: Perceptions and Perspectives for Global Governance, Singapore: Konrad-Adenauer-Stiftung, 2011, pp. 73-80.

Die Bundesregierung, Shaping Globalization — Expanding Partnerships — Sharing Responsibility. A strategy paper by the German Government, Berlin, 2012, p. 13.

Ibid.

See Susanne Vogt, "Germany and the G20", in Wilhelm Hofmeister (ed.), G20: Perceptions and Perspectives for Global Governance, Singapore: Konrad-Adenauer-Stiftung, 2011, pp. 73-80.

Die Bundesregierung, Shaping Globalization — Expanding Partnerships — Sharing Responsibility. A strategy paper by the German Government, Berlin, 2012, p. 13.

"Deutsche G20-Präsidentschaft 2017. Inhaltliche Vorbereitungen laufen", 05.08.2016 https://www.bundesregierung.de/Content/DE/Artikel/2016/08/2016-08-01-themen-der-g20-praesidentschaft.html, last accessed on 20.08.2016.

"Deutschlands Zukunft gestalten. Koalitionsvertrag zwischen der CDU, CSU und der SPD", Berlin, 2013, p. 126.

Speech by Federal Chancellor Angela Merkel on receiving an honorary doctorate from Nanjing University on 12 June 2016 in Beijing.

Ibid..

Gemeinsame Erklärung anlässlich der 4. Deutsch-Chinesischen Regierungskonsultationen, Beijing, 13. Juni 2016, Pkt. 5.

See Katharina Gnath and Claudia Schmucker, "The Role of the Emerging Countries in the G20: Agenda-Setter, Veto Player or Spectator?" Bruges Regional Integration & Global Governance Papers 2/2011, p. 18.

See e.g., Mina Toksöz, Policy Cooperation in the G20: The Role of Middle Powers and Proposals for the Turkish Presidency in 2015, The Royal Institute of International affairs, Chatham House, March 2015.

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