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Emmanuel Macron is revitalising the European Union—and dividing it

Posted by hkarner - 24. Juli 2017

Date: 23-07-2017
Source: The Economist: Charlemagne

Eurocrats should temper their new optimism with a bit of caution

LIFE comes at you fast in the European Union. Barely a year ago, with the wounds from the refugee crisis still gaping, Donald Tusk, the president of the European Council, could be heard warning that a British vote to quit the EU threatened to bring about the collapse of western civilisation. In half the countries on the continent, snarling populists eager for European disintegration were terrifying the pro-EU establishment.

Yet over the past few months, gloom has turned to sunshine. In June Mr Tusk declared that he had never felt so optimistic about the EU. Much of the credit goes to Emmanuel Macron. France’s newly minted president has lifted pro-Europeans’ spirits not only by winning election wrapped in the EU flag but by doing so in revolutionary fashion, emerging from nowhere to humble France’s old parties (as well as Marine Le Pen, the nationalist who stalked Eurocrats’ nightmares for months). Rarely do members of the European establishment get to feel like insurgents.Some of the optimism needs tempering. Leave aside the fact that none of Europe’s recent emergencies has been properly fixed, from Greece’s economy, on an IV drip of endless bail-outs, to the migrants streaming across the Mediterranean. Mr Macron is certainly brimming with ideas to reform the euro zone as the core of the EU—from a common investment budget to the establishment of a parliament and a finance minister. But he has less to say on matters that encompass all EU members, notably the single market. Hailed as the saviour of Europe in some parts of the continent, elsewhere Mr Macron is quickly proving divisive. The new man in the Elysée seems to be pushing old French ideas.

Take EU labour policy. Perhaps to sugar the pill of the reforms he wants French unions to swallow, Mr Macron promises to tighten EU rules on the pay and conditions of Europeans working temporarily in other countries. To eastern European governments that looks like a bid to keep their low-cost workers out of the high-paid west, recalling the old French paranoia over “Polish plumbers”.
Mr Macron’s recent charge that some countries treat the EU like a “supermarket” so unnerved the Visegrad four (the Czech Republic, Hungary, Poland and Slovakia) that they hastily created working groups with France to plead their cases.

That may be just the start. Mr Macron wants a Europe that “protects” citizens, a phrase that implies any number of policies, from co-ordinated minimum wages to prohibitions on “social dumping” and harmonised tax rules. Fans of such ideas tend to sit inside the euro zone. Until recently Britain would try to prevent the euro zone from pre-cooking such deals and presenting them to the rest of the EU as faits accomplis. This helped smooth divisions between the euro-zone “ins” and the “outs”. But Brexit leaves those outside the euro without a champion. Officials in Brussels note that after Britain leaves, the 19-member currency area will account for 85% of the EU’s economy. This is a none-too-subtle way of locating the EU’s “core”.

The idea of Kerneuropa (“core Europe”) has a long pedigree. First pushed years ago by Wolfgang Schäuble, Germany’s current finance minister, and later taken up by Nicolas Sarkozy, one of Mr Macron’s predecessors, it was advanced as a tool to manage an increasingly unwieldy EU. Today a core Europe built around the euro zone could find itself collaborating on thorny non-economic issues too, such as quotas for redistributing refugees. Should Mr Macron get his wishes for institutional changes to the euro zone, its political heft could leave the gaggle of non-members looking like an afterthought. To western European countries interested in more integration, this “multi-speed” Europe holds appeal. But eastern European governments detest the idea of formal consignment to a second class. “Either we get in the integration express or we’ll be stuck in the depot on the second track,” said Robert Fico, Slovakia’s prime minister, last month.

Wedged apart
If some eastern countries struggle to make themselves heard, it can be their own fault. Governments like Poland’s sabotage their own case when they promulgate lurid horror stories about migrants or, worse, undermine the democratic values to which they signed up as EU members. Moderate governments that may sympathise with their arguments on the single market will recoil from association with countries in the grip of populism.

Several have joined Mr Macron in wondering out loud how countries that defy the EU’s principles might be sanctioned, perhaps by cutting the generous subsidies they receive. If such countries continue to drift away from the EU’s fundamental values, others will be more likely to plough on with their ideas for integration and leave the stragglers behind.

The divides are not always clear-cut: Slovakia, Slovenia and the Baltic states are euro members, and dislike being lumped in with the more intransigent easterners. Others may soon face hard choices, such as the Czech Republic, which sends over 60% of its exports to the euro zone. Germany will have to play a vital bridging role between a resurgent France, with which it can strike a deal on euro-zone reforms, and the eastern European countries plugged into its supply chains through the single market. Angela Merkel, who grew up on the wrong side of the Berlin Wall, will be reluctant to entrench division within Europe. But the chancellor’s demand that all EU countries accept a quota of refugees creates its own European wedge.

Eurocrats will head off to their summer breaks more confident than they have been for years. Two cheers, then, for Mr Macron. But by restoring Europeans’ hopes that there is life in their flagging project, the president is bringing to the surface tensions that lay dormant during the crisis years. The result could be a well-organised Europe running at different speeds. Handled badly, it may resemble a cacophonous mess. Of the many tests before the French president, this is among the largest.

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