Sunday, November 1, 2009

Future dreaming

France, Germany and the European Union

French hopes for new Franco-German leadership in Europe may yet founder on disagreements about policies and priorities

TO MOST people, the prospect of an end to the European Union’s institutional navel-gazing is welcome. Once the Czech holdouts ratify the Lisbon treaty, goes the line, there should be no new grand schemes. Yet this is not how things are seen in France. Indeed, the French have been laying the ground for their next big idea: a deepening of the Franco-German axis to entrench their dual leadership and make Europe “one of the principal players of the 21st century”.

In a speech to his ambassadors in August, President Nicolas Sarkozy declared that he wanted “Europe once again to make history instead of enduring it”. His model was “Franco-German understanding” built on his friendship with Angela Merkel, the German chancellor. His Europe minister, Pierre Lellouche, is zealously spreading the message. “More than ever, the relationship between France and Germany will form the heart of what I would call the third phase of post-war European history,” he recently wrote in Le Monde.

The French are not suggesting a new EU treaty, but they have plenty of other wheezes. The celebration with Germany of the 20th anniversary of the fall of the Berlin Wall next month may make up for François Mitterrand’s lack of support for German unification. The French want a joint commemoration of Armistice Day on November 11th. There is talk of marking the 50th anniversary in 2013 of the Elysée treaty on Franco-German co-operation.

Plenty of policy ideas are being kicked around as well. The French want to persuade the Germans to back a new industrial strategy to promote European champions, a common investment in clean technology, a European plan for energy independence, greater tax co-ordination and more. They see common ground in opposition to Turkish membership of the EU, as well as reform of laissez-faire capitalism. There is talk of a joint Franco-German government minister. Mr Lellouche has asked his team to prepare “a new Franco-German agenda for Europe”, ahead of a joint cabinet meeting before the end of the year. “In the new European configuration,” he said last month, “the Franco-German relationship will be central, because only it combines both political will and the capacity to push grands projets forward.”

There are many impulses behind this new Gallic offensive. One is Europe’s changing politics. The French realise that the British are likely to be unhelpful friends if the Eurosceptical Conservatives win the election next spring. “David Cameron makes Maggie Thatcher look like a veritable federalist,” comments one aghast French politician. At the same time, the re-election of Ms Merkel at the head of a centre-right coalition, instead of her former unity government with the Social Democrats, boosts French hopes of a more decisive German government.

Another factor is the view that, when the French and the Germans agree, Europe makes its voice heard. The French list the G20 agreements to curb bank bonuses, strengthen bank capitalisation and squeeze tax havens as examples.
No bridge across the Rhine

As it happens, Mr Sarkozy, never an instinctive Germanophile, got off to a fractious start with Ms Merkel, falling out over French plans for a Mediterranean Union; and it took time for Ms Merkel to get used to Mr Sarkozy’s tactile chumminess. But Mr Sarkozy knows he cannot impose his ideas on Europe. Early on he spotted a chance to use the anti-capitalist mood against the “Anglo-Saxons”, and sought an ally. “There has been a spectacular conceptual rapprochement between Merkel and Sarkozy,” insists a French official.

Yet across the Rhine the preference is for plodding progress rather than grands projets. The German foreign ministry recently held a one-day meeting to discuss relations with France, but there was little debate about Mr Lellouche’s proposals. After all, there is still no new German government in place. The Social Democratic foreign minister, Frank-Walter Steinmeier, will go, but his successor, almost certainly Guido Westerwelle of the Free Democratic Party, has not yet arrived. If Mr Lellouche “honestly wanted his proposal to happen, he wouldn’t have launched it in an article in Le Monde,” noted one Berlin-based observer of Franco-German relations.

Nor is a new golden age likely when Ms Merkel and Mr Westerwelle take office. The EU’s biggest member has acquired a reputation for looking after itself—whether over saving the Opel carmaker or over euro-area bank rescues. Mr Westerwelle’s party will be charier of an activist industrial policy than were the Social Democrats.

Germany has other foreign-policy priorities besides France, such as improved relations with Poland and other central European countries. On nuclear power and Turkish membership of the EU, Ms Merkel’s new government is closer to French positions, although even here agreement may be elusive. It will keep nuclear-power stations open longer, but the two countries may not agree on a lot else over the EU’s energy policy. Nor is it clear that Ms Merkel will want to obstruct membership negotiations with Turkey.

Economic issues may be no easier. Germany’s new balanced-budget amendment to its constitution will force it to pursue a tight fiscal policy, unless the coalition circumvents it to permit tax cuts. France, on the other hand, plans to grow out of its deficit at a leisurely pace. Differences in debt and competitiveness will make it harder to manage the euro area. Germany will preach thrift and reforms to boost competitiveness. But if it just lectures its partners rather than co-ordinating policies, it risks aggravating tensions within the euro group rather than alleviating them.

Nor is there yet a Franco-German agreement on how to take the EU forward after Lisbon. A ruling in the summer by Germany’s constitutional court means the government must consult the legislature more often about EU initiatives. It is not clear if Germany means to give the EU greater scope for action or treat it, as many others do, as the mere servant of national governments. There is no sign of a bilateral deal on the allocation of the senior jobs being created by Lisbon.

The French are not starry-eyed. They know they are heading for possible rows over deficit-cutting. On industrial matters, the two countries often compete. The French are not happy that German trains, not French ones, will run on the soon-to-open high-speed link between Moscow and St Petersburg, nor that Siemens is pulling out of its nuclear joint venture with Areva. And the French are not blind to the need for other ties in Europe. They still hope to draw the British into a common European defence policy, even under a Conservative government. It is far harder for two countries to steer an EU of 27 members than one of 12. Yet the French expect the most from Germany—and it is not clear they will get much.

(Source: From The Economist print edition, BERLIN AND PARIS)

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