The Frugal 15 – The Growing Influence of the Hanseatic League 2.0 in the EU

[picture economist.com] The Netherlands taking over the role from Britain as the leader of the Hanseatic League 2.0?

During the run-up to the previous EU summit there was much talk about “The Frugal Four”, to the dismay of France, Italy and Spain, where in contrast many in Germany quietly loved it. The Spanish finance minister Nadia Calviño talked somewhat condescendingly about the “Hanseatic League”, opining that the weight of that league didn’t match its aspirations. We’re not offended at all though by that qualification ‘Hanseatic’ for solid northern European economies and gladly accept that nick as a badge of honor.

What is the actual economic weight of the richest smaller countries in Europe? The detailed numbers you will find at the bottom of this post, but here we have the summary. The power back-bone of the European Union of 27 countries is the French-German alliance. These are like two suns around which the rest of the 25 countries rotate like planets.

However, it makes sense to group these 25 countries into 3 subgroups and give them the, not entirely accurate, nicks: Hanseatic League, Club Med and Visegrád:

  • EU Backbone. Europe’s center: France, Germany
  • Hanseatic League. The most affluent nations from the North, ranked after GDP: Netherlands, Belgium, Sweden, Austria, Ireland, Denmark, Finland, Luxembourg.
  • Club Med. Europe’s “middle class” from the South: Italy, Spain, Portugal, Greece, Cyprus, Malta.
  • Visegrád. Europe’s poorest from the East, ranked after GDP: Poland, Romania, Czech Republic, Hungary, Slovakia, Bulgaria, Croatia, Lithuania, Slovenia, Latvia, Estonia.

What has become obvious since the last “rebuild after Corona summit”, is that Germany and France, “geopolitically correct”, avoid direct confrontation, and instead hide behind proxy battles between the “Hanseatic League”, led by Dutch PM Mark Rutte and “Club Med”, led by Italian PM Giuseppe Comte, where Germany is discretely siding with the Hanseatic League and France likewise with Club Med. Tellingly the most hostile noises came from The Hague and Rome, directed against each other. The Dutch PM Rutte gained a lot in stature in the process, where Italy and Spain (with France leading from behind) didn’t get all they had set out for.

However, the Hanseatic League is potentially considerably larger then the group mentioned above. Switzerland and Norway are not EU-members, but they are de facto integrated into the Common Market and are net financial contributors to the coffers in Brussels. And then there are Scotland and Ulster. Many in London fear that as a result of Brexit, the UK might loose both Scotland and Northern Ireland, due to Scottish independence and Irish reunification respectively. Apart from Ulster, all are rich and small, hence we include those with the “Hanseatic League+”, see table below.

Summary EU Constituting Groups

Bloc Population GDP (PPP) GDP/capita
Germany 83.5 4660 55.8
France 65.1 3315 50.9
Hanseatic League 66.6 3901 58.6
Hanseatic League+ 88.2 5088 57.7
Club Med 129.6 5454 42.1
Visegrád 102.4 3493 34.1
European Union 445.6 20,762 46.6

It is interesting to note that both the Hanseatic League+, as well as the Club Med proxies of Germany and France, have more economic weight than their resp. patrons. It can be expected that the communities of interests displayed above could harden in the coming years and that The Frugal-4 could expand into the Frugal-11 or even Frugal-15, and that Visegrád-4 could expand into Visegrád-11, enabling France and Germany to delegate their conflicts of interests to the lesser Gods and thus providing the entire EU-system with great stability.

The idea that the Netherlands could take over the role the United Kingdom played pre-Brexit, is British wishful thinking. In contrast to Britain, the Netherlands is a core EU-member and even played a significant diplomatic role in bringing together the WW2-combatants France and Germany after the war. The formation of communities of interests, like the ones described above, is a healthy development, creates clarity and stability, by introducing huge buffers between France and Germany, reducing the risk of geopolitical accidents.

[spectator.clingendael.org] – Why a New Hanseatic League Will Not Be Enough
[economist.com] – How the Dutch will take Britain’s place in Europe
[ft.com] – New ‘Hanseatic’ states stick together in EU big league

Dutch-led group resists grand French ambition — with tacit approval from Berlin.

Once mocked as “Wopke and the Seven Dwarfs”, Mr Hoekstra and his fellow Hanseatic finance ministers, who first got together at a Brussels steakhouse in 2017 after an EU finance ministers’ meeting, now see it as a sign of success that bigger capitals such as Paris are showing their irritation. Nadia Calviño, Spain’s finance minister and former European Commission official, raised hackles among the club’s diplomats this month when she refused to respond to a recent Hanseatic position paper because it was the work of “small countries with small weight”.

So what is the actual weight of “Wopke and the Seven Dwarfs”:

Hanseatic League

GDP distribution 2019 wealthy smaller EU countries:

Country Population GDP (PPP)
Netherlands 17.4 1034
Belgium 11.5 626
Sweden 10.3 574
Austria 8.9 525
Ireland 6.6 436
Denmark 5.8 348
Finland 5.5 283
Luxemburg 0.6 75
Hanseatic League 66.6 3901

The list of small countries is not exhausted. There are Norway and Switzerland, though not official EU-members, they are de facto member of the European Common Market and net contributors. Furthermore, Brexit-Britain may have left the EU, but Scotland and Ulster didn’t like it and fear exists in Westminster that it could lose these two territories, through Scottish independence and Irish reunification respectively. Here is their weight:

Hanseatic League+

Country Population GDP (PPP)
Switzerland 8.6 609
Norway 5.4 357
Scotland 5.5 171
Ulster 2.1 50
Total 21.6 1187
Hanseatic League+ 88.2 5088

Now the other grouped EU states:

Club Med

Country Population GDP (PPP)
Italy 60.6 2665
Spain 46.7 1987
Portugal 10.2 375
Greece 10.5 366
Cyprus 1.2 36
Malta 0.4 23
Club Med 129.6 5454

Eastern Europe

Country Population GDP (PPP)
Poland 37.9 1299
Romania 19.4 625
Czech Republic 10.7 454
Hungary 9.7 332
Slovakia 5.5 186
Bulgaria 7.0 171
Croatia 4.1 122
Lithuania 2.8 106
Slovenia 2.1 85
Latvia 1.9 62
Estonia 1.3 51
Eastern Europe 102.4 3493

[wikipedia.org] – List of countries by GDP (PPP)

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