There has been a great deal of austerity-bashing -- that is to say
Germany-bashing -- this French election season. Buoyed by his success in
the first round, Socialist candidate Francois Hollande declared last
Thursday: "It is not for Germany to decide for the rest of Europe."
Vowing to reset Europe on a growth path, he said, "we're not just any
country, we can change the situation."
Now he looks set to put his words into action, following his apparent victory in Sunday's runoff election.
French President Nicolas
Sarkozy was quick to throw off the "Merkozy" mantel early on in his
campaigning once he realized that vaunting his friendship with the
German chancellor was the last thing his electorate wanted to hear, but
it appears to have been in vain.
But Merkel stood by her
one-time ally, saying she continued to support him in his re-election
bid. This came despite increasingly anti-immigrant, protectionist rhetoric from the Sarkozy camp in order to appeal to voters on the far-right that must have sit uncomfortably with Berlin.
Much
was made of the fact that the German chancellor's office has made no
official overtures to Hollande. The chairman of Germany's Social
Democrat party Sigmar Gabriel called his socialist counterpart in Paris a
"victim of slander" by the ruling coalition and by Merkel personally in
a recent interview with German daily Die Welt. "She knows perfectly
well that it is a lie that Hollande want to scrap the fiscal compact and
incur mountains of debt."
Whether or not she is
sure of that, Merkel has made it quite clear that Hollande cannot scrap
the fiscal pact. Not up for renegotiation, she said. But it was also
clear that Berlin recognized the writing on the wall. "Germany is clever
enough to adapt its position to a new political constellation in
France," said Etienne Francois from the French Center at Berlin's Free
University. "Germans are not people to improvise."
And Merkel has already
responded with more talk of growth, although she's at pains to argue
this isn't a new position on her part. "It is important that we break
with the idea that growth always costs a lot of money and must be the
result of expensive stimulus programs," she told the Hamburger
Abendblatt. The way out of this crisis has always rested on two pillars:
"solid finances and measures for growth and employment."
Hollande for his part
said if he became president, his first trip would be to Berlin. This is a
man who does not underestimate the strength of the Franco-German
alliance. Plus he's of a more similar temperament to the German
chancellor than Sarkozy ever was. "He's pragmatic, prepared to
compromise, accepts budget discipline and he'll be under enormous
pressure from the markets," says Claire Demesmay, French expert at the
German Council on Foreign Relations. "Once the summer's over, once the
parliamentary elections have happened, he will have to start saving and
he will have to push through reforms."
For
now, expect small modifications to the fiscal pact but no rewrites.
"Germany will be clever enough to accept little changes in formulation
in order to help Hollande tell French voters that he's been victorious,"
Francois said. "But it's just tactics." Merkel is already talking about
more flexible use of EU infrastucture funds to spur growth, a
strengthened role for the European Investment Bank. But that is a long
way from meeting any future French leader on proposals such as eurobonds
or a European Central Bank lending directly to governments, both
anathema to Berlin.
How far the German
chancellor will be forced to compromise to Hollande's growth mantra may
well depend on matters outside France. Greece was also holding elections
on Sunday. Greek voters stung by austerity are turning to extremist parties on the left and right.
Recession is biting across Europe, swingeing cuts making electorates
restive in Spain, Portugal and Italy. The more support Hollande gets
from other disgruntled eurozone countries, the less lee-way Berlin has
to stick to its tough belt-tightening course.
But that is still some
way off. Merkel has two crucial state elections coming up in the next
two weeks and the Netherlands goes to the polls in September. If the
past decades are anything to go by, it is more than likely the
Franco-German alliance will remain an anchor of stability amid all the
uncertainty, whoever holds the reins of power in each country.
Source: CNN News