11 March 2012

Wolfgang Münchau: Bravo Merkel on campaigning for Sarko

In his FT column, Münchau says that he considers the arrival of partisan party politics in Franco-German relations as one of the more welcome developments in the eurozone for a long time.

In the past the quality of bilateral relations was largely determined by the chemistry between leaders, who often came from different ends of the political spectrum. Think of Helmut Schmidt and Valéry Giscard d’Estaing. Or Helmut Kohl and François Mitterrand.

The eurozone crisis has changed all this: bilateral relations have become more party political. The reason is that important policy decisions have shifted from the national to the eurozone level. Take the fiscal compact, recently signed by European Union leaders, most of whom are from the centre-right. The compact was Ms Merkel’s idea; Mr Sarkozy strongly supports it. But François Hollande, the French Socialist presidential candidate, says that, if elected, he will renegotiate it.

The fiscal compact is clearly the most important issue in Franco-German relations right now. But there are more. The two countries are discussing whether and how to harmonise tax policies. A working group has been busy making proposals for a common corporate tax base. And both countries want to introduce a financial transactions tax. The SPD is intrigued by Mr Hollande’s proposal for a top income tax bracket of 75 per cent – something the German left would never dare suggest at home. They might also consider working together on the issue of a minimum wage.

What we are seeing here is the beginning of a process towards pan-European party politics. Past attempts to create EU-wide parties from scratch have all failed miserably. That leaves the alignment of national parties as a second-best option. In the European Parliament, national political parties have formed joint groups. I see no reason why parties should not form cross-border coalitions in policy areas reserved for national politics. After all, the eurozone has an intergovernmental and EU-wide dimension. So, for once, I salute Ms Merkel for her courage to break ranks.

The introduction of partisan politics into Franco-German relations raises a number of questions. It is not clear that Ms Merkel’s support will benefit Mr Sarkozy. According to opinion polls, the Socialists are on course for one of the most crushing political victories in modern French history. A victory for Mr Hollande would throw the eurozone’s anti-crisis policies wide open. I would welcome this. As it stands, the fiscal compact would land Spain in a debt trap from which it might never recover inside the eurozone. The French presidential vote is thus more than just a national poll. It is about the future of the eurozone.

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