Why Germany has Shifted its Approach to Europe 

Since January 2025, Luigi Mattiolo has served as the new Italian president of Villa Vigoni, the Italo-German binational think tank based on Lake Como dedicated to fostering European dialogue—a dialogue, particularly between these two founding nations, that has never been more essential.

Ambassador Mattiolo's extensive diplomatic career makes him ideally suited to interpret the profound changes underway in Europe and globally, changes intensified by Donald Trump’s return to the White House.

In his 43-year diplomatic career, Mattiolo has focused significantly on the European Union and NATO. At Italy’s Foreign Ministry, he served as Director General for the European Union and later as ambassador to Turkey and Germany, ultimately becoming diplomatic advisor to Prime Minister Mario Draghi until 2022.

Ambassador Mattiolo, let's start with Germany, which you left in 2021. Since then, everything seems to have changed. It was a different Germany in a different Europe; Angela Merkel was still in power, strict fiscal constraints were in place, and the economy relied heavily on relations with China and cheap Russian gas. How do you view that Germany now, and what assessment can we make?

It was certainly another world. During my tenure, two key events shaped Germany: one national but with European significance, and the other global. The first event was Angela Merkel's decision at the CDU Congress in Hamburg in December 2018 to step down as party leader. In the German political system, that automatically meant she would not contest the subsequent elections in September 2021, won by Olaf Scholz (SPD).

It was an exceptional moment: Merkel continued exercising her full authority as Chancellor, yet significant uncertainty emerged regarding Germany’s future and Merkel’s legacy.

Then came the war in Ukraine—and the revelation, surprising for some and predictable for others, of the true nature of Vladimir Putin’s Russia—which forced a reassessment of many Merkel-era decisions, notably Germany’s privileged relationship with Moscow, cultivated partly in Europe's interest.

The second, even more devastating event was the pandemic. From my experience, and that of fellow diplomats abroad at the time, the pandemic created a watershed between “before” and “after,” profoundly reshaping Germany’s approach to European integration.

Germany initially relied on its economic and administrative strength. Italy had just over 7,000 intensive-care beds for roughly 60 million people; Germany, with about 80 million people, had 28,000, four times more. 

Germany believed it could avoid prolonged lockdowns in factories and schools. Yet factories eventually halted due to the lack of spare parts from countries like Italy, which had been forced to shut down.

This crisis reinforced awareness among the German public, politicians, and entrepreneurs that Germany does not operate in isolation. It is Europe’s industrial powerhouse, deeply integrated into the single market. 

This realization triggered a paradigm shift, prompting German support for common EU measures to tackle the pandemic’s economic and social impact, exemplified by the Recovery Fund and Next Generation EU.

Thus, I experienced a Germany extraordinarily supportive towards Italy and other EU countries. For instance, I recall the transport of some Italian patients to Germany, an initiative originating from German parliamentary circles—a powerful demonstration of the depth of bilateral ties, encompassing economic, ethical, moral, and emotional dimensions.

How should we judge Angela Merkel’s controversial strategic choices, namely maintaining relations with Putin and relying on Russia for affordable gas?

Affordable gas prices primarily benefited Germany but also other countries, including Italy, which for years enjoyed advantageous long-term energy contracts with Russia. 

Geopolitically, it was inevitable that Germany—and by extension other EU countries—cultivated special ties with Moscow. Merkel's personal background allowed her intimate knowledge of Russia and its culture, yet her approach always combined this with strong transatlantic loyalty.

At the Hamburg congress, in her farewell speech as CDU president, Merkel paid tribute to George H. W. Bush, noting his crucial support for Helmut Kohl in achieving peaceful German reunification and the withdrawal of Soviet troops.

Merkel was undoubtedly aware of Russia’s potential dangers, as recent events confirm. The strategic error lay in excessive dependence. 

Today, we speak of needing "reliable vendors" and risks from disrupted value chains—ideas not central in leaders' thinking back then. Establishing too great a dependency on any international partner is highly sensitive. Merkel and other contemporary leaders perhaps underestimated this risk, a miscalculation that hindsight now makes clear.

Germany’s shift in fiscal policy under incoming Chancellor Friedrich Merz—is this a tactical response to difficult domestic economic conditions or a reflection of deeper lessons learned from the pandemic about Germany's interdependence with Europe?

I believe it is part of a new awareness: in an interconnected world, the very notion of sovereignty must evolve. When Americans discuss "sovereignty," they mean autonomy over a geographic space extending beyond their borders. 

Russia has historically followed a similar logic since Tsarist times. Germany now seems increasingly convinced that its strategic space transcends national boundaries, coinciding at least with the EU and potentially including other partners depending on circumstances.

Germany was often depicted as a "reluctant empire" for understandable historical reasons. But now this hesitance seems to be fading, with emerging leaders more openly recognizing Germany’s role as a major player on the continent.

Where does the rise of Alternative für Deutschland (AfD) fit into this scenario? Is it a reaction to changing European policies, Merkel’s open-door refugee policy, or unresolved integration issues between East and West?

It stems from all these factors, and perhaps others. If I had to rank them, I would put first the backlash against Germany's generous migration policy since 2015, when Merkel opened the doors to about one million Syrian refugees, famously declaring “Wir schaffen das” (We will manage it). Germany partially succeeded, particularly regarding integration, education, and employment. Yet isolated terrorist incidents significantly impacted public opinion, fueling AfD’s growth.

A second factor is the persistent development gap between East and West Germany. Some eastern Länder, formerly part of the German Democratic Republic, experienced deep frustration due to industrial closures and generational exclusion from unified Germany’s economic processes. Additionally, anti-globalization sentiments among youth often swing votes between the radical left and AfD.

Lastly, a smaller yet vocal electorate remains skeptical about EU integration, fearing Germany’s economic strength might be "diluted." These same circles once worried that Mario Draghi’s quantitative easing might undermine German bonds and pensions.

Turning to Europe, as someone well-versed in the Brussels machinery, how do you see the EU’s future in a dramatically changed geopolitical context? Some predict the EU's demise as inadequate for a multipolar world, while others believe this crisis will drive greater integration, echoing Jean Monnet's idea that European integration advances primarily through crises.

I am cautiously optimistic. I worry when prominent analysts prematurely proclaim the EU’s demise. Historically, Europe has often advanced through crises—like a bicycle that falls if it stops pedalling. We saw this during the pandemic. 

Conversely, during the post-Lehman financial crisis, Europe moved slowly, with pro-cyclical policies exacerbating problems in highly indebted countries.

Today, the EU is concretely addressing common defense. The lack of immediate common defense funding does not alarm me, as neither fiscally constrained countries like Italy and lately France nor stronger economies like Germany currently desire such a move. 

Priorities should include avoiding duplication, optimizing resources, advancing digital transition, capital markets union, and ecological transition (adjusting timelines if necessary).

We are 450 million consumers, with the third-largest global GDP, despite demographic challenges. Increased cooperation between the EU and NATO is essential, especially given longstanding U.S. demands for fairer burden-sharing.

Having served as ambassador in Turkey, how do you view EU enlargement regarding Ukraine, Moldova, the Balkans, and Turkey’s stalled candidacy, especially considering Erdogan’s domestic crackdown? IEP@BU vice president Sylvie Goulard warns that enlargement without substantial internal reforms could endanger the very existence of the EU. 

Since the late 1980s, the debate has persisted about "deepening" before "widening." Turkey, a longstanding associate, was granted candidate status after the significant 2004 enlargement, causing considerable frustration as former Ottoman territories joined the EU ahead of Turkey.

While current EU decision-making structures would complicate Turkey’s accession, the EU missed opportunities to leverage membership negotiations to promote essential reforms on human rights, corruption, and consumer protection. 

Erdogan’s early moderate political Islam once resembled centrist European religious parties, but his authoritarian turn was exacerbated by tensions with the PKK, Kurdish statehood fears, and election-driven crackdowns.

Let’s turn to Italy, given your past role as diplomatic advisor to Prime Minister Draghi. How do you interpret the current Italian government under Giorgia Meloni, which seeks to maintain good relations with both the Trump administration and its European partners, despite the fracture in transatlantic relations? Is this merely a tactic aimed at not displeasing anyone, or is it part of a broader strategy, perhaps indicating an attempt to forge a "special relationship" with the United States in place of the one America had with Britain?

I don’t believe Italy aims to replace Britain as America's "special partner." The Americans have always had a very clear assessment of power dynamics and primarily look toward countries with greater industrial or military strength. That said, it is possible there may be tactical maneuvering within the governing coalition, but I also believe a more strategic and realistic vision is emerging. 

The Italian government is correct when it states that European security, for now and for the foreseeable future, crucially depends on the NATO pillar, as the technological and military gap with the United States remains substantial. It is also correct in pointing out that merely increasing national public debt within the still rigid European fiscal framework isn't sufficient: there needs to be a way to share the defense burden because if one EU country were attacked, neighboring countries would not be secure either. This is a cautious but wise position.

Nevertheless, there remains the issue of increased defense spending. Is it sustainable for Italy to remain below 1.5% of GDP while Poland, for instance, is approaching 5%?

We will likely need to increase this expenditure, but private savings could also be leveraged. I don't mean to sound cynical, but if I had capital to invest, financial advisors would likely suggest defense and security industries, given trends observed in recent years. Furthermore, resources should be optimized at the European level, avoiding duplications in weapon systems. 

One could also consider involving the Ukrainian industrial supply chain if it offers effective solutions at lower costs. Creating additional public debt at a time when we are already committed to Next Generation EU and facing the ecological and digital transitions is complicated.

Perhaps we should reconsider the Stability Pact, asking ourselves if parameters like the 3% deficit still make sense in a world very different from that of the 1990s. Especially since, in the meantime, Europe has lost slices of prosperity compared to other global competitors, and this remains one of the core issues.

IEP@BU does not express opinions of its own. The opinions expressed in this publication are those of the authors. Any errors or omissions are the responsibility of the authors.

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