Since his election triumph, Emmanuel Macron, the new French president, has been hailed as savior of Europe, not the least so by the German press. However, less than three days later, the same German media criticized the man who defeated Marine Le Pen, antithesis in persona to Germany’s official cosmopolitan world view, for his “outrageous” demands. What had happened?
Macron, according to his own campaign, is committed to rejuvenate French society, instill French companies with the spirit of enterprise, cut back bureaucracy, labor protection and state-dependency – in short: to heal France of the structural shortcomings that result from an over-statist past. He promotes a gradual reduction of corporate income tax from 33 to 25 percent and the introduction of a new wealth tax – not applicable to financial investments -, aimed at the rich.
By itself a gargantuan endeavor, Macron adds the demand, addressed at powerful neighbor Germany, to cut down its huge current account surplus, to agree to the introduction of Eurobonds guaranteed by the Eurozone member states, to a common eurozone budget and a eurozone finance minister.
Traditionally, German public opinion rebels at such ideas. Experts point to the fact that France’s efforts to restructure and deregulate are long overdue, that Germany did so successfully years ago under Merkel’s predecessor Gerhard Schroeder, and that there cannot be a reward for doing the right thing at the wrong time. However, in Berlin they know perfectly well that Macron, if he fails, will have been France’s last pro-EU or pro-Euro president. However grudgingly, Chancellor Angela Merkel and her Finance Minister Wolfgang Schaeuble will eventually yield to some of his demands.
Mr Macron is in favor of the eurozone and of France to stay in it, but he insists on the mentioned reforms. They are possible only with German approval and support, questionable at least until September’s general elections. Which means that the new French president will be tied down handling internal matters at least until autumn.
A major concern is France’s high unemployment rate of 10.1 percent or about three million people. It is not the worst in Europe, but higher than average and far worse than, say, the Netherlands’ (about 5 percent) or booming Germany’s (below 4 percent). Even the UK with below 5 percent fares significantly better. Particularly alarming is the high unemployment among people under 25 – around one in four.
To reduce the numbers, Macron must ease the strict labor protection laws that favor those who are in possession of a job, while largely discriminating the unemployed. The regulations keep employers from adding new staff as it will be difficult to arrange for lay offs during an unforeseen or sudden slump. The International Monetary Fund (IMF) estimates that major reform will be needed to reduce French unemployment to less than 8.5 percent. In that field, Macron’s success largely depends on how he forges relations with the major private sector unions CFDT and CGT.
That the Berlin-Paris axis might develop some constrained rivalry was clear as soon as the 39-year-old new president set his sights on the Élysée palace. His vision of Europe is both pro EU and pro euro – but it is decisively more socialist than that of his colleagues in Berlin. The Germans, while wholeheartedly proclaiming common European values and ideals, have been fighting all attempts to create common budgets, a unified financial administration, common cash accounts or common liabilities.
A healthy dispute between France and Germany over the right strategy for Europe might even prove beneficial, in any case better than sheer German complacency. It will re-vitalize the efforts to unite the continent, at least its Western part, and it will likely reflect in foreign policy. The familiar picture from the Minsk, or Normandy, peace format – French president Francois Hollande accompanying Angela Merkel like a prince consort his governing queen – will be an icon of the past. Surely over the next five years Macron will not forget Marine Le Pen’s jibe at their latest TV confrontation: “A woman will reign over France – either me or Ms Merkel.”
In fact, a Merkel-Macron rivalry may help to instill the European political apparatus with new energy. It may accelerate the conceptual search for the “Europe of tomorrow”, contribute to an improvement of the strained European-Russian relationship, and clarify how – or whether – the increasingly estranged Europeans in the East, i.e., Poland, etc, and those in the West will continue to cohabitate under a common institutional roof.