Monday 27 January 2020

Frederick Kempe: The growing Franco-German schism

OCCASIONALLY a public opinion survey surfaces that signals a seismic event. That is the case with a new report from the Pew Research Centre that measures the widening tremors of a political earthquake now shaking Europe.

Although the report leads with evidence that Europeans are increasingly losing faith in the European Union (which I wrote about here), the more troubling problem is the fast-growing divide between France and Germany. This schism is ripping apart the bonds that have held Europe together for 60 years - just when they are most urgently needed.

There is a second, powerful underlying message: Germany has more economic weight and political will to determine Europe's future than it has had since World War Two. Now, though, it lacks a partner that can replace France's pivotal importance. Beyond that, Germans are increasingly out of step with most other Europeans in their economic optimism, their faith in their national political leadership and their continued support for European institutions.

Some 75pc of Germans consider their economic situation good or very good, despite Germany's recent economic slowdown. At the same time, more than two-thirds of those surveyed in seven other countries - Britain, France, Italy, Spain, Greece, Poland and the Czech Republic - are dissatisfied with their economies.

"The increasing alienation of Germany from the rest of Europe is quite striking," said Bruce Stokes, director of global economic attitudes at the Pew Research Centre. "The Germans seem to be living on a different continent than the French. Or perhaps it would be more accurate to say they are living on a different planet."

The relationship hasn't just broken down at elite levels, beginning with the much-publicized personal and ideological differences between French President Francois Hollande and German Chancellor Angela Merkel. The French and Germans are increasingly divided in their attitudes toward their leaders, their economic futures and the very value of the European project.

"That is unprecedented and profoundly challenging," said Stokes. "It may mean that the Europeans have to find a new glue if they are to hold Europe together, and find a new motor to advance the European cause."

Some argue that if September's German elections produce a Social Democratic government or if Europe experiences sustained economic growth, the picture will be altered. Yet Europe's economic prospects are for slow growth for several years. And no German electoral shift can change stark realities that mark a reordering of the European continent between a French-led south and German-led north.

By almost every economic measure, the gap between Germany and France is growing, underscoring their differences in global competitiveness.

France's share of government spending as a percentage of the overall economy has ballooned to 56pc, compared with 45 percent in Germany. French unemployment is 11pc, more than double Germany's 5.4pc.

France's trade deficit widened to $87.7bn in 2012, while Germany posted a trade surplus of $246bn. France's deficit is near historic highs, as is Germany's surplus.

What all this means is that France, the traditional "connector" between the European south and the north (think Germany), is heading south - literally and figuratively.

As Pew laid it out:

"France has always bridged Europe's north and south. French language and culture has Latin roots, but France has historically been considered in the same economic and political league as Germany and Britain. And in their public attitudes the French were neither Northerners nor Southerners, but a hybrid of the two. Now, measured by a number of indicators, the French look less like Germans and a lot more like the Spanish, the Italians and the Greeks."

The Franco-German relationship has never been easy. After all, the driving purpose behind the creation of the European Coal and Steel Community in 1950, compelling the two countries to pool their means of war, was to ensure they could never engage in such hostilities again.

The high-water mark in their relations was probably 1984, as then-West German Chancellor Helmut Kohl and then-French President Francois Mitterrand clasped hands for several minutes, a moment captured in an iconic photograph taken during a rain-soaked commemoration at the World War I battlefield at Verdun, where the two sides suffered more than 700,000 casualties.

The two men signed a declaration there that read:

"France and German have learnt lessons from our history. Europe is our common fatherland. We are heirs of a grand European tradition. That is why, 40 years ago, we ended our fratricidal war and began to build our future together. We were reconciled, we came to an agreement, we became friends, European unification is our common goal."

Now the two sides are exchanging fusillades of press leaks.

Le Monde published a leaked French Socialist Party document that brands Merkel as "the chancellor of austerity" and says her actions were driven by "selfish intransigence" and a desire to protect German savings.

Handelsblatt, the German business paper, published a leaked document from the German Economics Ministry that derides declining French competitiveness, noting France has the second-lowest annual working hours in the EU.

The outcome of this new divide won't be war. But it's hard to imagine Hollande clasping hands with Merkel.

It seems almost inevitable that the next European fireworks - and the next test of the durability of the French-German relationship - will come when financial markets turn their firepower on Paris.

(Frederick Kempe is a best-selling author, veteran Wall Street Journal editor and reporter, and president and CEO of the Atlantic Council, one of Washington's most prominent think tanks and public policy institutions. His much acclaimed book, Berlin 1961: Kennedy Khrushchev and the Most Dangerous Place on Earth, is being published in 12 languages and was a New York Times and Washington Post best-seller.)


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