22 April 2014

Errera/Ischinger: France and Germany must rebuild relationship, for the good of Europe

Never has it been so important for the nations of the European Union to be united. But never has the European project been more endangered by indifference, hostility and even open rejection.

We are left, as always, with the Franco-German partnership. However, the traditional idea of the "Franco-German motor essential to the advancement of Europe" is losing credibility with the growing discrepancy between the two economies, the widening differences in national interests, and the weakening of political will to build Europe together. The Franco-German relationship has never been a love affair. With the exception of the periods in office of Helmut Schmidt and Valéry Giscard d'Estaing or Helmut Kohl and François Mitterrand, happy times were always shortlived, with ulterior motives, numerous frustrations and misunderstandings ever present. 

Now the context has fundamentally changed. The US is retreating, Russia remains unpredictable, and China's weight is increasing. Europe is divided and France is weakened. Germany, for its part, is not only the dominant economy but for the first time also declares itself ready to take on more international responsibility. That could either represent a risk or a great opportunity. The risk is that instead of rapprochement, mutual tensions will increase, and the pair will drift even further apart. The opportunity is a reformed relationship and a global New Deal between France and Germany.

In terms of the economy, there can be no Franco-German partnership if the gulf between the two economies grows. France needs to get closer to Germany on corporate taxation, the level of social security contributions, reform of the labour market, and reduction of public spending – in particular the financing of welfare benefits. In return, Germany must rethink its position regarding the policy of austerity, the role of the European Central Bank and the sharing of debt. If both countries achieve that, they would be able to establish a close co-operation for the leadership of the eurozone, which would in turn become the core of the EU.

That is what is at stake for Manuel Valls, the French prime minister, and Angela Merkel, the German chancellor. At the same time a new deal is also required on foreign policy. Germany needs to overcome its postwar pacifism and become more involved in the crises increasingly breaking out on our doorstep. France needs to be willing to share decisions with Germany on the main issues. Both should also be clear on defence policy. That inevitably involves the question of a permanent seat on the UN security council and the role of France's nuclear deterrent.

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