Fifty years after the signing of the Elysée Treaty, the most active bilateral relationship in Europe does not live up to its reputation. France and Germany read the crisis differently and have opposing views on the future of Europe. EurActiv France reports.
The eurozone debt crisis has exposed differences between France and Germany on how to proceed with the European project.
While Merkel wants Europe to form a fiscal union that would give Brussels more oversight over national budgets, France resists any intrusion into budgetary issues.
French President François Hollande, meanwhile, faces Germany's refusal on the idea of mutualising European debt via jointly-issued euro bonds, with German public opinion staunchly opposed to any efforts to make them underwrite European partners' debts.
While the Franco-German relationship has evolved much with the times, its foundations are as strong as ever. But both countries are yet to come up with a mutual solution to the debt crisis.
“The Germans have a different economic culture, which weighs more than the political game between the left and the right,” said Claire Demesmay, a researcher at the German Council on Foreign Relations (DGAP). As a result, it has been Social Democrat chancellors - Helmut Schmidt (1974-1982) and Gerhard Schröder (1999-2004) - that put austerity policies in place.
Differences on major issues
At the moment, Germany opts for “a policy of supporting a favourable environment for investment in industry while controlling labour costs at the expense of real wages”, says Jean-Marc Trouille, a specialist in integration at the University of Bradford in Britain. France, however, pursues a “policy of demand to stimulate growth through consumption and services while giving a priority to income.”
These differences in doctrine have naturally influenced Paris and Berlin in their analyses of the economic problems of the eurozone. Where in Germany there is a debt crisis, in France the crisis is described as financial. One advocates slimming down public expenditure, while the other defends investment in growth.
Key divergences exist in almost all major economic issues (for a full table see EurActiv.fr). These include: direct and retroactive recapitalisation of Spanish and Irish banks; debt buybacks from the ECB; eurobonds; banking supervision; bank bankruptcy resolution; European deposit guarantees; the 2014-2020 budget; the eurozone budget; allocation for the financial transaction tax; procurement reciprocity.
The logical consequence, the notion of solidarity, while at the heart of the anti-crisis measures of the eurozone, does not mean the same thing for both countries.
President François Hollande uses it to project on French public opinion a vision of Europe that does not limit itself to policing deficits. While in Germany, lawmakers debate ardently the legitimacy and legality of aid to Greece.
In Europe, solidarity would mean conducting “anti-inflationist and anti-debt” policies, because this “plays in the favour of the popular classes”, says Andreas Schokenhoff, a CDU member of parliament who is in charge of the France-Germany friendship group.
There is “asymmetry” in Franco-German opinion, says Claire Demesmay. In Germany, “the citizens are more mobilised on the debt crisis and the mechanisms in place,” she says. Considered more “idealist”, for the French “it is the state which pays. The citizens don’t feel so directly concerned. There is a sort of irrationality towards public spending.”
Fifty years after the Elysée Treaty, France and Germany have the richest bilateral network in Europe, including a Franco-German Council of Ministers, a common economic and financial council, and an exchange of diplomats, parliamentary contacts, and educational exchanges.
But both still cling to their own way of thinking. And when it comes to their bilateral friendship or wider EU relations, the French fear a German dominance, reports EurActiv.de. French elites increasingly speak of a German "problem", with Berlin imposing its views on the rest of the eurozone.
Despite these differences, the dialogue still works since both parties move from difference to compromise without fail, a chemistry which could not operate without political will.
“The positions of France and Germany resemble their geography”, says a diplomat. “The countries meet each other, but not much. Their views therefore create a ripple effect, as they are representative of the rest of Europe.”
Pragmatism above all else
Almost ironically, Paris and Berlin continue to get closer, with little fencing on institutional integration. This is now “where the differences are least pronounced”, says Hans Stark, a researcher at the French Institute of International Relations. “The caricature that Germany would be post-national, pro-federalist on one side and France chilly, statist and 'sovereigntist' on the other no longer applies.”
The key ingredient of today's recipe is pragmatism, comfortably avoiding offending public opinion reluctant to federalism, analysts say. The time when Valéry Giscard d'Estaing and Helmut Schmidt instigated the utopic, though unpopular, idea of a European monetary system is well and truly over.
“This lack of projection is not unique to the Franco-German relationship”, says the Socialist MEP Estelle Grelier, who says it exists across the EU.
- 22 Jan. 2013: 50 year anniversary of the signing of the Elysée Treaty