Germany votes: what does France think?

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This is the second in a series of blog posts on how the German elections are being seen elsewhere in the EU. 

Having essentially given up hope of a major political shift in Germany, the French are watching their big neighbour's federal elections with remarkable equanimity. The complex electoral arithmetic that might lead to a surprise eviction of Chancellor Angela Merkel from the chancellery is understood only by a tiny minority of observers. Most policy actors and citizens expect Merkel to continue to be the German leader France will have to deal with.

This prospect is now more palatable than it would have been a few months ago. The increased flexibility the European Commission, with the support of Berlin, has shown of late on the application of austerity, the resumption of growth in the eurozone (however tenuous), and the fact that Angela Merkel does not dismiss the principle of further aid packages for eurozone crisis countries, all feed into a more relaxed appraisal of Germany's European policy stance. This goes very much for the man at the top himself: contrary to many expectations, Francois Hollande has refrained from any moves that might have signalled strong solidarity with Merkel's social democratic opponent Peer Steinbrück. Indeed, in public comments, Hollande has signalled sotto voce that he sees the prospect of spending the remaining four years of his first term in office in partnership with Angela Merkel not so much as a threat as an opportunity. In a recent interview with Le Monde, Hollande listed energy policy, new technologies, and defence cooperation, as priority areas for the Franco-German couple in the next four years, together with  better economic policy coordination in the eurozone and fiscal and social common standards including a minimum wage. No need for Treaty changes: pioneer groups of countries would be enough, said Hollande.

Hollande knows full well that some of this agenda will be near-unacceptable for any government Merkel would lead. But her recent conversion to pragmatic small-bore reform of the EU and the eurozone, her espousal of an almost Gaullist scenario of strengthening the European or eurozone Council rather than the European Commission or Parliament,  have all contributed to reassure Hollande that Merkel will be a partner with whom he can do business. This comes after a first year in office during which the bilateral relationship was subject to tensions typical of any embryonic Franco-German duo of chief executives. That said, the loudly voiced differences between Hollande and Merkel during the last twelve months have obscured the crucial compromises that were achieved even in this phase. Mario Draghi's crucial OMT announcement of 2012 could not have happened without joint Franco-German assent. Similarly and importantly, France and Germany never disagreed on the demands that were imposed on Greece.

There is actually much to be said for the assumption that Hollande would actually be more comfortable with a continuation of this partnership with Merkel than with the switch to a Chancellor Steinbrück. On the face of it, the prospect of a social-democratic chancellor in Berlin should be highly attractive to the French president and his political majority. The reality could well be a very different one. For example, an SPD-led government in Berlin would inevitably expose François Hollande to vigorous pressure from the most left-wing members of his majority to push for an all-out deficit-spending policy agenda for the eurozone and France. A chancellor Steinbrück would resist this, making Hollande look weak; as importantly, the President would find it far more difficult to push through his budgetary consolidation agenda at home, with the hardcore French left clamouring for an end to austerity all across Europe.
 
Steinbrück has learned to reign himself in during the crucial final phase of the campaign; but his surprise ascent to the Chancellery might unleash once more his famously undiplomatic personal style. A chancellor Steinbrück might be sorely tempted to lecture the French government on the need to bring down the deficit and reform the country's economic legislation, with a storm of protest in France the likely result. Last but not least, Hollande's authority currently benefits from the fact that he is the senior centre-left leader in Europe. Were Steinbrück to unseat the seemingly invincible Merkel, Hollande would share that position or lose it altogether, dealing a further blow to his authority. No wonder then that François has so clearly refrained from speaking out for Peer.

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