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No doubt, Mrs Merkel is in the driver’s seat – with disastrous consequences. Merkel has made about every mistake in the euro crisis one could possibly make. At the early stages, she fueled doubts about Germany’s commitment to European unification by hinting that Greece should exit the euro. That made financial markets nervous and increased the bill for the subsequent rescue effort. German public opinion was not amused. Merkel then stingily kept her purse closed and played the chauvinist card before local elections. Instead of calming markets, she imposed austerity programmes on Europe, which made it ever more difficult to balance budgets. Finally, Merkel’s insistence on making banks pay, reassuringly called “private sector involvement”, nearly brought transactions in the euro capital and money markets to a standstill. Only the very courageous liquidity programme by the ECB has avoided the total collapse of the European monetary economy.
Sarkozy’s opponent, François Hollande, has become the lone challenger to Mrs Merkel. He has vowed to re-negotiate the fiscal pact by which Merkel hopes to germanify Europe. This fact explains why the German Chancellor has thrown her weight behind Sarkozy, the conservative candidate; even if her foreign minister was quick to point out that party support was not in the interest of the German state. It will be harder for Merkel to dominate a socialist government in France than a weakened Sarkozy.
However, an open conflict between France and Germany is the last thing Europe needs. If this were to happen, financial markets would become hysterical. The real problem underlying the Merkozy fusion is the undemocratic way of governing Europe. All European citizens are concerned and affected by policy decisions concerning the euro, but at present these decisions are made by the Merkozy coalition. Merkozy is blackmailing Greece into unbearable and unsustainable austerity by withholding bailout funds. But Greek citizens have no power to change mistaken policy orientations or remove Merkel or Sarkozy. In Italy la gente brava has seized the occasion to throw out Berlusconi, but how long will Monti last if the recession pushes up unemployment? With the forthcoming election, the French now have the opportunity to remove Sarkozy, but Merkel will remain and Europe will suffer. This way of running Europe cannot go on for much longer.
Where does that leave France and Germany? National identities have a long shelf-life. Fois gras and Schweinshaxe will not disappear; nor will the different models of organising the welfare state. What is needed is a new political consensus that allows citizens to assume responsibility for their common affairs, and both France and Germany can contribute to making it happen. Republicanism is at the core of French political identity. It has a long tradition going back to the Roman Republic and emphasises the fact that individual citizens and not cultural communities are responsible for public affairs. Federalism is the political principle on which Germany is built. Neither of these principles can be transposed directly to the European level, and yet, both must be articulated in new ways in order to sustain Europe’s public goods. France needs to understand that La république peut être une et divisible, which means that different public goods may need different levels of government. Germany must learn that the Bundesrepublik is first of all a republic, where citizens and not governments or states have the final say. This would be the new shared consensus by which France and Germany could save the euro and actually make Europe really successful.