Once they have forged a new compromise on growth, François Hollande and Angela Merkel should work to restore the eurozone’s cohesion.
The visit of President François Hollande to Berlin points to a willingness for the Franco-German tandem to iron-out policy differences and propose a new compromise on austerity and growth before the EU summit on June 28.
“It will certainly be important for Germany and France to do a joint presentation of their ideas at this Council”, said Chancellor Angela Merkel at a joint press conference during Hollande’s first official visit to Berlin.
In “After Merkozy: How France and Germany can make Europe work”, Ulrike Guérot and Thomas Klau argue that:
- A Franco-German compromise on growth is indeed within reach as Hollande has been careful to formulate most of his proposals – boosting the lending capacity of the EIB, activating the EU budget - so that they are acceptable to Berlin.
- France and Germany must prepare for the next round of EU treaty reform. The commitment to integrate the fiscal compact into the treaty after a maximum of five years means that the issue will return on the agenda. Berlin wants treaty reform because Germany realises that only stronger eurozone institutions will shield it from the charge of dictating policy to Europe.
- The best way to do this is for France and Germany to launch an ambitious reform programme open to other partners. This should make national governments, parliaments and administrations adapt their working methods to the new eurozone macro-economic policy rulebook; facilitate cross-border labour mobility and take first steps towards eurozone Welfare state policies such as a complementary unemployment insurance.
“Germany has a vital interest in EU treaty change: unless the EU and eurozone are given stronger institutional leadership, the attacks against Berlin’s dominance in eurozone politics are likely to get worse. One good way to prepare for the next round of EU reform is for Paris and Berlin to show the citizens that Europe is about helping the unemployed as much as it is about helping business.” - Thomas Klau
“François Hollande’s and Angela Merkel’s partnership will be much more productive than Merkozy. The experience shows that cross-party Franco-German leadership offers a much better basis for European compromise than a symbiotic couple with two leaders with similar political backgrounds.” - Ulrike Guérot.
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Notes for editors :
- This paper, like all ECFR publications, represents the views of its author, not the collective position of ECFR or its Council Members.
- ECFR’s ‘Germany in Europe’ project is supported by Stiftung Mercator.
- ECFR is also running a Reinventing Europe project, looking at how Europe can rethink its medium to long term future once the immediate crisis recedes. The Reinventing Europe project is supported by Steven Heinz