PARIS â It was a flawless debut on the European stage for French president Emmanuel Macron.
On his first working day in office, the centrist leader sent Berlin a strong signal that he is ready to give new momentum to European integration and pursue Franco-German cooperation, winning a warm vote of confidence from German Chancellor Angela Merkel.
For both Paris and Berlin, the day marked the beginning of a long-awaited rebalancing of European leadership, putting France back along with Germany in the driving seat just as Britain is on its way out and the United States, under the chaotic presidency of Donald Trump, is turning inward.
But a successful âMercronâ partnership is not a foregone conclusion.
At Mondayâs meeting, the two leaders pointed to short-term targets, such as making quick progress on EU trade reciprocity, a common asylum system, labor mobility rules and promoting joint investments. But the two countries have big hurdles to overcome on defense and economic governance. They will have to overcome deep-seated reflexes to make their cooperation a success.
Merkel may have left the door open to the French leaderâs ideas, but part of Germany’s political establishment is already drawing red lines against Macron’s proposals for a eurozone budget and finance minister. And German media are anxiously asking how much Macron’s victory could cost the countryâs taxpayers.
Basking in the enthusiasm generated by his youth and pro-European outlook, the president professed his respect for German taboos, such as the rejection of common eurobonds to redeem eurozone countries’ debt stock. He maintained he was determined to carry out bold economic reforms at home to make France more credible and dynamic on the European stage.
Julyâs joint cabinet session will be a first test of the promised Franco-German revival.
Specifically, he told reporters in Berlin, heâll focus on reforming EU rules to stop imported east European labor undercutting French workers by paying a fraction of their social contributions. He wants the EU to get tougher on anti-dumping duties and impose reciprocity on foreign strategic investment in Europe or access to public procurement tenders â wins that would reassure those in France who doubt Europe is doing anything to protect them.
With none of the previous three presidents Merkel has sat across from in the past 12 years did the cautious chancellor achieve the deep mutual understanding and political serendipity that powered European integration in the eras of Konrad Adenauer and Charles de Gaulle, Helmut Schmidt and Valéry Giscard d’Estaing, or Helmut Kohl and François Mitterrand.
Macron promised to be a âfrank, direct and constructive partnerâ for Berlin. If he can convince Merkel to revive the frequent, unscripted, plain-speaking meetings between French and German leaders of the past, it will be a crucial step toward setting a joint agenda for Europe.
Bridging differences
Julyâs joint cabinet session â where both defense and the economy will be on the agenda â will be a first test of the promised Franco-German revival.
Macron has made it clear he intends to use France’s major contribution to European defense and security as a lever to help secure progress in the eurozone. But his influence in Berlin, as he acknowledged, will depend on his ability to break the rigidities in the French labor market and put the country’s young people to work.
He will need to overcome deep-seated resistance to eurozone intervention in national budget policies. The last Socialist government was as defiant as its Gaullist predecessors when the European Commission repeatedly criticized Franceâs excessive deficits, high tax burden on business and employment, and generous welfare and pension systems. But Macron is committed to the right track. Honoring commitments to EU-supervised economic reforms are part of his vision for a more integrated eurozone, he said in Berlin.
Merkel welcomes Macron in Berlin on May 15 | Clemens Bilan/EPA
Where Macron will be at pains to earn trust on the economy, Germany will have to show itself a reliable partner in matters of defense, a sticking point between the countries in the past.
Paris is still fuming at Berlin’s refusal to let German crews fly NATO surveillance planes over the Mediterranean in the 2011 Franco-British-led air campaign in Libya, even though the operation was sanctioned by the United Nations, NATO and the European Union. The French are also furious that Sigmar Gabriel used his role as economics minister to block the export of jointly manufactured kit such as helicopters to French clients in central Asia and the Gulf on human rights grounds.
For the French, it is vital that the next German government lift restrictions on selling jointly produced arms to third countries, and promise that jointly owned or operated resources will be available when partners need them. “Until the Germans remove those two obstacles to cooperation, we can’t move forward with them in confidence,” a senior French defense official said.
The Germans, for their part, expect better prior consultation before France embarks on military action that may involve its partners.
The Commission weighs in
When it comes to the eurozone, Germany will have to end its resistance to further risk-sharing to complete the EU’s banking union. And here progress is likely to be difficult.
Macron will need Berlin to lift its blockade on common deposit insurance and a joint fiscal backstop for the European bank resolution fund. Finance Minister Wolfgang Schäuble â who has expressed support for some of Macronâs ideas â will hold both steps hostage at least until after the German general election in September.
Schäuble is holding out for a very different form of eurozone governance, in which an inter-governmental (i.e. German-controlled) European Monetary Fund, built on the existing European Stability Mechanism, would impose automatic debt restructuring and an austerity program on any eurozone country that needed assistance.
Macron is a committed pro-European, willing to take risks. But he wonât commit political suicide for the cause.
“Every time the Germans want to stop progress, they play one of three trump cards,” an EU official said. âEither they argue there is no legal basis, or they won’t accept liability for legacy problems, or they argue that it would create a moral hazard.â
The European Commission has an early opportunity to help France and Germany overcome their differences and build a stronger framework for the eurozone.
The institution is set to release a reflection paper at the end of the month. Insiders say it will include new ideas for a “eurozone safe asset” â something they describe as less than a eurobond but more than a securitization of existing sovereign bonds.
It would also propose the creation of a “stabilization fund” equivalent to 1-2 percent of eurozone gross domestic product â no permanent budget transfers but a kind of insurance system that complements national budgets in case of asymmetric economic shocks â and call for early completion of the eurozone’s banking union and an ambitious capital market union.
Macron visited Berlin only a day after being sworn in as president in Paris | Michele Tantussi/Getty Images
The timing of these first moves toward a deeper eurozone will be crucial. Macron is a committed pro-European, willing to take risks. But he wonât commit political suicide for the cause.
Macron and Merkel said they were willing to seek public support for changing the EU’s founding treaties if it became crucial to strengthening the eurozone. But a referendum on a new EU treaty late in Macron’s five-year term would give far-right, hard-left and conservative Gaullist opponents a golden opportunity to trip him up. His more cautious advisers are urging to leave treaty change for a (hypothetical) second term.
Indeed, Macron hinted at ambitions for a second term in a throwaway line in Berlin when asked about the small but enthusiastic crowd that had cheered him outside Merkel’s office.
“What I hope is that when I come back to see Madame Chancellor in five years’ time, there will be the same crowd and even bigger, because we will have delivered results,” he said.
Paul Taylor writes POLITICO‘s “Europe At Large” column.