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06/12/2016

‘Dialogue of the deaf’ threatens Europe

Euro & Finance

‘Dialogue of the deaf’ threatens Europe

Hollande and Merkel. [President of the European Council/Flickr]h

Arnaud Montebourg criticised the fragility of the French-German relationship at a forum on the future of Europe, describing it as a grave cause for concern, along with the rise of nationalist politics. EurActiv France reports.

Experts met to discuss the future of Europe at the sixth New World Forum, hosted by the OECD in Paris on 7 and 8 October. Even the most Europhile among them criticised the failings of European governance. But Arnaud Montebourg, the former French Minister for the Economy, blamed the “dialogue of the deaf” between France and Germany for blocking progress in the EU.

Arnaud Montebourg condemns “hawks of budgetary orthodoxy”

The Franco-German axis remains one of the most important driving forces behind the European Union, but has been in a state of crisis for the last two years. According to Jean-David Levitte, a French diplomat, there is a lack of trust. “The Chancellor thinks that France does not want to implement the necessary structural reforms. France must fulfill its responsibilities,” he explained.

>> Read: 2014 will test Franco-German alliance, analysts predict

Montebourg compared the relationship between the two countries to a dialogue of the deaf. “On the one hand, they push us into budgetary orthodoxy and structural reforms, and on the other hand, under Jacques Chirac we accepted Gehrard Schröder’s failure to implement budgetary orthodoxy. Now, when France is asking for the same flexibility, it is forbidden by the hawks in the Bundesbank and the German government.” But divisions in Europe run deeper than the Rhine.

The former French minister believes that in order to find European solutions, the discussions must take place at a European level. This view is shared by Jean Dominique Giuliani, President of the Robert Schuman Foundation, who said “we have to put an end to the political stereotype of doing things by halves. That plays into the hands of the extremists”.

Nationalism, the new scourge of Europe

The prevailing view among the experts at the New World Forum was that nationalist parties now represent the greatest threat to the European Union. The Eurosceptic share of the vote continues to increase with each election.

>> Read: Eurosceptics make controversial return to EU Parliament

Arnaud Montebourg is among those troubled by the current political climate, and believes Europe is in a decline that will continue into 2015 and play an important role in the rise of nationalist parties.

He blames politicians for fortifying mistrust of Europe’s voters. “We must act now, because the nationalist parties pose a real threat,” he warned. “The Germans have seen a surge in support for the AfD in recent elections, and in France, the National Front will win 25% of the vote at the presidential elections”.

Failings in governance

Jean-Claude Trichet, the former governor of the European Central Bank, believes that lack of economic growth and structural reform are behind Europe’s sluggish emergence from the crisis, and that governance on a European level is needed.

This should be accompanied by increased democratic legitimacy in the central decisionmaking bodies of the EU. “We cannot tolerate such mediocre European governance as we have seen in the past,” he said.

Jean-Dominique Giuliani shares the view that placing a greater emphasis on democracy would give Europe the strength it needs to overcome its current problems. Economic remedies are one solution, but he believes the next step must be to form a fiscal union based on the French model.

Lacking collective intelligence

According to the former French Finance Minister, “we do not show the same flexibility [as the rest of the world], the same collective intelligence when it comes to the European budget”.

Hannes Swoboda, the former President of the European Parliament’s S&D group, added that Europe needed to be flexible in order to encourage the investment that would help it emerge from the economic crisis. “Greater budgetary flexibility will bring down deficits in the long term and help create more jobs”.

>> Read: Italy and Germany lost in translation over budget flexibility

Background

France's deficit is fast becoming problem number one of the Eurozone. While many countries have tightened their belts by laying off civil servants and cutting pay, France has done neither. The country's public deficit remains very large, and the lack of economic growth leaves a diminished tax base.

Further Reading

New World Forum