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Can Emmanuel Macron revive the Franco-German relationship?

Posted by hkarner - 13. Mai 2017

Date: 11-05-2017
Source: The Economist

Getting Europe back to speed will be no easy task

LIKE all the best clichés, the notion that the European Union is driven by a Franco-German “locomotive” is grounded in truth. From the founding of the European Coal and Steel Community to the creation of the euro, almost all the signature projects of post-war Europe have emerged from Paris and Berlin. The compromises forged between two former foes with competing political and economic visions have proved powerful enough to bring much of the rest of the continent along with them. Lately, though, the French part of the engine has run out of steam, and the European train has been idling. Can Emmanuel Macron, the young reformer who won France’s presidency wrapped in the EU flag, shunt it back on to the rails?

The grandest of Mr Macron’s many ideas involve fixing what he calls the “half-pregnancy” of Europe’s single currency. He wants intra-euro-zone transfers and investment, funded from a common budget and administered by fresh institutions like a finance ministry and parliament. But Germany has long looked askance at such gouvernement économique. As the two countries’ economic performance has diverged, it has become ever harder for French ideas to find an audience in Berlin. In 2012 Mr Macron’s newly minted predecessor (and former boss), François Hollande, took his anti-austerity campaign pledge to Angela Merkel and returned to Paris with a flea in his ear. Soon enough he was executing endless U-turns. He leaves office on May 14th with historically low approval ratings, an example of what not to do.Mr Macron can expect a better hearing on his own visit to Berlin, due later this month. On two ground-softening trips to Germany earlier this year, he promised to tackle problems at home before making demands of his neighbours. “I propose to restore the credibility of France in the eyes of the Germans,” he said in March. “We need it because the future of Europe is at stake.” His priorities chime with time-worn German gripes: reinvigorating France’s hidebound labour market (joblessness stands at 10%, well over twice the German rate) and shrinking its bloated state.

Mr Macron’s campaign vows to shake up the more torpid parts of France’s economy secured him a mandate to reform. But Germans have seen countless such French planscome and go. For all Mr Macron’s fresh-faced appeal, he will have his work cut out in a country that is in a decidedly surly mood. The parliament that emerges after next month’s legislative elections may not be eager to help the new president impose his will on France.

It is just as well that Mr Macron will face distractions at home, for Germany is gearing up for its own election in September, and events in France have begun to colour the campaign. Senior figures in Mrs Merkel’s Christian Democratic Union (CDU), such as Wolfgang Schäuble, the flinty finance minister, have already dismissed Mr Macron’s euro-zone proposals. But their Social Democrat (SPD) coalition partners, backed by parts of the press, like Mr Macron’s ideas to boost Europe’s (and Germany’s) woeful investment rate. A strong SPD showing in September might mean Mr Macron’s proposals find friendlier ears in Berlin.

But the hype surrounding Mr Macron’s extraordinary campaign has too quickly spilled into grand talk of a reinvention of the euro zone. There is little appetite anywhere in Europe for the treaty changes that a major currency revamp would require. In Berlin it is not only the coming election that stays politicians’ hands. Many Germans think their contributions to euro-zone bail-outs over the years have shown plenty of solidarity already. Mr Schäuble’s finance ministry bitterly resists anything that smacks of a “transfer union” or debt mutualisation. It will be hard enough for France to win German support on smaller matters, such as completing the EU’s banking union. “I’m sceptical about institutional proposals,” says Norbert Röttgen, a senior MP for the CDU . “I’d concentrate on practical steps that yield results.”

Similar noises emerge from some voices close to Mr Macron. “Our first priority is to be pragmatic,” says Sylvie Goulard, a French MEP tipped for a top job when the new president names his government next week. “Can you really explain to an unemployed man that it’s time to change the euro-zone structure?” Both Mr Röttgen and Ms Goulard speak of deepening co-operation on security matters; some German officials acknowledge that broadening the conversation to defence might be the only way for them to move, eventually, on economics. Expect also joint proposals on advancing the EU’s digital single market, one of Mr Macron’s stated priorities for Europe.

All hail Emmangela
A renewed Franco-German partnership would leave Europe better placed to handle future crises. But it would also help relieve Germany of the burden of hegemony. Its officials are weary of explaining that they have no wish to lead alone (suggestions that Donald Trump’s election left Mrs Merkel the ruler of the free world elicit universal eye-rolls in Berlin). With Italy flailing, Britain Brexiting and Poland in the grip of illiberal democracy, a restoration of the bond with France would come at an auspicious time for Germany. It would also weaken resistance in other EU countries that have grown resentful of its dominance.

That is good news for Germany—but Mr Macron may in time call Berlin’s bluff. Germany has long said it will consent to reform in the euro zone if other countries get their houses in order first. That is precisely what Mr Macron has promised to do. In rejecting the far-right, anti-EU Marine Le Pen in favour of a pro-European dedicated to restoring his country’s self-confidence and renewing ties with Germany, French voters could have been following a script written across the Rhine. That leaves Germany with a stake in Mr Macron’s success, but also the obligation to give his ideas a hearing. Some of them will be uncomfortable. But if a little German self-examination is the price of Mr Macron’s victory, Europe will be all the better for it.

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