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Restoring the Franco-German leadership of the EU

Britain for one is quite unprepared for the ultimate project of the new French president: the restoration of Franco-German leadership in Europe.

lead French President Emmanuel Macron meets Angela Merkel in Berlin. May 15,2017. NurPhoto/Press Association. All rights reserved. Britain for one is quite unprepared for the ultimate project of the new French president: the restoration of Franco-German leadership in Europe. For centuries, it avoided a concentration of power in Europe and paid a blood price when it failed in 1914 and 1939.

It failed again in the post-1945 era, but successfully divided and conquered after it joined the European Union. Britain played France and Germany off against each other and crafted an EU to suit its interests. The result was the single market, the eastward expansion and the never ending opt-outs.

Emmanuel Macron wants a bargain in which Germany secures the euro with a fiscal union while Paris agrees to structural reform at home. That will be very difficult to deliver, but a coherent, decisively-led Europe will put Britain in an invidious position.

The euro

In recent years, Berlin and Paris have been poles apart on what to do about the euro. Charles Grant, head of the Centre for European Reform remarks that “Germany wants more fiscal discipline and new mechanisms to make countries like France and Italy engage in painful structural reform, while France wants more common instruments such as ‘Eurobonds’ and steps towards a transfer union.”

Macron will want to prove that he is able to reform France – that implies cutting taxes on jobs, reducing the state’s 55% share of economic output and decentralising collective bargaining. If and when he succeeds he can propose a new concordat on the euro.

Much will depend on whether his recently founded party La République en Marche and its allies from right, left and centre can secure a majority in next month’s parliamentary elections. General de Gaulle failed to secure a majority in parliament during the first three years of the Fifth Republic (1959-1962) but no one knows whether the new president has the mettle of the great statesman.

His rise to date suggests an iron fist in an exquisite velvet glove but only time will tell. He has to date upended the way presidential elections are conducted and won. To redraw the traditional lines of politics in a country as conservative as France – with a small ‘c’, is a gamble without precedent since 1958.

In his relationship with the German chancellor, Angela Merkel, and unlike the manner in which he is portrayed in much of the British press, Emmanuel Macron is not a beggar. A far right Front National victory in France would have spelt political disaster for Germany and Europe. The French voters have salvaged their country’s reputation but also laid to rest, for now, the doubts about the fabric of today’s liberal democracies which came to the fore after Brexit and Donald Trump’s victory in the US presidential election.

Taking the lead

Mrs Merkel, whose Christian Democratic party has been bolstered by recent provincial elections looks in a good position to remain the leader of any future coalition in Germany after next September’s federal elections.

Germany is uncomfortable in the de facto role of ‘leader’ of Europe cast upon her by recent French weakness. Mrs Merkel will not have forgotten the cartoons that appeared in some of Europe’s southern media during the Greek debt crisis, depicting her with a Hitler moustache or a pointed helmet, or how Poland and Hungary recently lambasted her refugee policies. She does not relish the thought of going down in history as the chancellor who presided over Europe’s unravelling.

She knows that turning a cold shoulder to Macron can only help the extreme right and left in France. Her government will not refuse him all he wants. As Britain exits the EU, Germany needs France more than ever. Too many British conservatives and their rabid xenophobic cheerleaders in the Daily Mail continue to overrate German ambition and underestimate French strength – as if the prism of London in 1940 should define its true self for ever.

Emmanuel Macron is mindful of the anger and Euro-scepticism of the working class; he will not only speak to happy France which embraces Europe and globalization. He will push for a “Buy European Act” modelled on US rules that would make it more difficult for non-EU companies to access public procurement deals; greater military co-operation between France and Germany – France could extend its nuclear umbrella eastward, and argue for the creation of a eurozone parliament.

That is not something Wolfgang Schaüble, the German economy minister would disagree with. He knows that Germany will have to compromise on some of its economic orthodoxies. How to boost spending in the Euro zone is essential to preserving the single currency: a German-French bond could be a prelude to a ‘Eurobond’. The IMF would no doubt encourage such a move.  

None of this will happen quickly and, in Berlin, the Social Democrats and the foreign ministry are more enthusiastic about Macron’s proposals than the chancellor. Ahead of the federal elections, he will have to show his mettle domestically while his German counterpart will not want to give any hint that they agree with his more Keynesian thinking.

Good news

When she greeted Emmanuel Macron on the red carpet at the German chancellor’s office in Berlin for his first visit abroad since he became president of France on 14 May, Angela Merkel’s smile was even broader than usual. Her CDU party had just won a remarkable victory in Germany’s most important state election in North-Rhine-Westphalia, but she was going to get down to business with a passionate pro-European that had seen off the far left and right opposition to win a decisive victory in France.

Macron’s refusal to flex French muscles against Germany, as his predecessors like to do and to play as a team is the best news for Merkel and their peers in the EU in a long time.

This piece was first posted on Cidob's opinion on May 17, 2017 and is republished with the author's kind permission.

About the author

Francis Ghilès is senior research fellow at the Barcelona Centre for International Affairs (Cidob). He was the Financial Times's north Africa correspondent from 1981-95, and now contributes to newspapers such as the New York Times, Wall Street Journal, Le Monde, El Pais and La Vanguardia. He is a specialist in emerging energy markets and their relationship to political trends, and has advised western governments and corporations working in north Africa


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