The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

François Hollande knows that the widening Franco-German divide lies at the heart of the euro zone crisis. In a press conference on Thursday, the French president showed that he wants to find a way to work with German Chancellor Angela Merkel to take Europe forward. He suggested the creation of an “economic government” of the monetary union, while addressing a key German concern: Paris seems ready to accept sovereignty transfers of a sort that would make such a centralised body effective.

Hollande suggested a two-year timetable to get it up and running. That looks optimistic. And as with any plan from Paris, this one will be greeted with caution by other euro zone members, wary that it might be just a way to promote France’s own interests. Yet it does not conform to the traditional French view that European integration simply means national governments working better together. It is closer to the type of federalism long advocated by Germany.

Whatever its merits, there is a risk that it will open a discussion that lays bare the different interests and agendas of the 17 euro zone members. Hollande’s priorities may not be shared by others: he mentioned tax harmonisation – always a controversial topic in Europe – and the fight against tax evasion.

It could be easier to find agreement on the other ideas. A joint programme to fight youth unemployment has already been suggested by German Finance Minister Wolfgang Schaeuble. And the suggestion that member countries join forces on the energy transition to renewables should be welcome.

Hollande can only convince his euro partners if he shows that he is also doing his part to boost the French economy’s growth prospects. To that end, most of his press conference was devoted to laying out reforms he wants to pursue – notably of the pension system, unemployment benefits, and the bloated state machine. His emphasis on the economy’s supply side was encouraging after a year spent obsessing over fiscal targets.

Hollande is the most unpopular French president on record. But no one will remember that if, in a few years time, he can show he reformed France and strengthened Europe.

The authors are Reuters Breakingviews columnists. The opinions expressed are their own

The heat is on for Mario Draghi again this week. What should have been a rather banal decision on rates will prove controversial whatever the outcome. Give credit to euro zone leaders for their ability to create drama whenever things threaten to go too quiet on the crisis front. The governing council of the European Central Bank will have to decide whether to cut rates or not at its meeting May 2. The case for doing it is a no-brainer, but euro zone politics gives the decision an intensity it shouldn’t have.

Since the last time the ECB lowered its main rate – to 0.75 percent, in July, 2012 – the euro zone slump has deepened, inflation has come down from 2.4 to 1.7 percent, and the Japanese central bank has embarked on a massive money-printing effort. Meanwhile, the euro has appreciated by 8 percent against the dollar and the pound, and 35 percent against the yen. Bond markets may have calmed down, but companies in Europe’s most challenged economies still borrow at prohibitive rates – when they do. Too much hope may be placed on the benefit of a rate cut by its vocal proponents: an incremental 0.25 percent cut, well in the ECB’s tradition, is unlikely to shake the euro zone out of its economic stupor.

Then, of course, there is Germany. Angela Merkel made headlines last week by hinting that what the German economy would rather need was a rate hike. The chancellor may have intended to simply point out how difficult the ECB’s task was, because it has to design a common monetary policy for economies that remain on diverging paths. She was being a bit disingenuous as well. As even the Bundesbank admits, the German economy is far from overheating, and inflation remains subdued. It should even be a bit higher than in the rest of the zone to allow the ECB to stick to its “below but close to” 2 percent overall inflation target.

Merkel has to contend with the growing frustration of Germans who see their savings eroded by negative real interest rates. Of course, Draghi could easily reply that guaranteeing decent returns for depositors is not part of the ECB’s remit. And that German savers will ultimately benefit from a healthier euro zone.

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Alexei Navalny rose to prominence as a Western-style shareholder activist in a country devoid of Western-style capitalism. He took apart Russian companies’ available statements and numbers to expose graft, corruption and embezzlement detrimental to investors.

This was bound to lead him to take on a political role, since the vices he denounces are an integral part of the Russian system. So instead of being brought into government, he is on trial on dubious charges in the latest of the Vladimir Putin’s attempt to muzzle dissent. This may be, in fact, a sign of the Kremlin’s anguish and weakness. Western governments and investors should take note.

Navalny’s trial opened on Wednesday in Kirov, 500 miles from Moscow, before a judge known for issuing only guilty verdicts. Prosecutors have twice previously rejected the case as groundless. It was revived by Russia’s top investigator days after Navalny revealed that a close Putin ally secretly owned property in the Czech republic.

It may be just a deliberate attempt to tar the reputation of the long-time anti-corruption activist and his followers with the rot that he is fighting against. Or it is another example of the Russian president’s well-known vindictiveness: Navalny has called for Putin to be tried in court and described the ruling United Russia party as one of “thieves and crooks” in the run-up to the rigged parliamentary elections of 2011.

Still, that wouldn’t explain everything. The trial of rock group Pussy Riot last year and the recent hounding of non-governmental organisations because of what the authorities call “Western ties” have made it clear that Putin has begun to persecute dissidents as did his alma mater the KGB in Soviet times.

Navalny faces a jail term of up to 10 years. The absurdity of that potential sentence is by itself a sign of the Russian president’s insecurity. There are parallels with the later Mubarak era here. As Putin recedes further into his country’s past, investors may want to start thinking about the risks of investing in a potentially unstable future.

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Boris Berezovsky built something that lasted. The man found dead on March 23 may have been alone, broken, bitter, and a shadow of his flamboyant former self as Russia’s richest man and king-maker. Yet the system he invented two decades ago in the throes of the big Soviet meltdown is functioning well. The men at the top may have changed, and turned against their former mentor and master. But the rulers of today’s Russia – both the oligarchs who looted the country’s resources and branched out, and the clique of ex-KGB officials working hard to get their hands on a share of the loot – are Berezovsky’s children.

Berezovsky was the first to understand what could be made of the chaos that followed the USSR’s fall in 1991. The former mathematician had enjoyed a head start in the last years of Mikhail Gorbachev’s perestroika, building a small stake in a decrepit automaker. It took someone shrewd and determined to realise that the country would be lawless for some time – the absurd Soviet legal system was gone, and no one knew what to put in its place.

He moved on to oil and media, and his fortune and influence helped Boris Yeltsin in his difficult re-election as president in 1996. Then came a role as fixer for the Yeltsin family and regime, masterminding many a Kremlin intrigue.

Berezovksy was the first oligarch. He invented, and perfected, the nexus of intertwined interests between the country’s new billionaires and the power structure, where mutual dependency is the guarantee of long-time survival. Oligarchs could choose a government to their liking, and ministers could hope to become oligarchs. Berezovksy orchestrated the back and forth.

Then something happened that still puzzles: he lost his touch. In 1999, he pulled Vladimir Putin from bureaucratic obscurity to make him Russia’s prime minister. He misunderstood the little man he thought his protégé, who rose to president within a few months. Berezovsky became one of the first billionaire-victims of the cold and ruthless political clampdown of the Putin era. Considering his role as chief architect of the modern corrupt system, one shouldn’t wonder if Russians shed few tears at the news of his death.

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Elvira Nabiullina has the worst possible credential for the job of head of the Russian central bank: she is a close ally of Vladimir Putin. The former economy minister, currently the Russian president’s chief economic adviser, will take the new post in June. Her appointment has been greeted with some scepticism.

The Central Bank of the Russian Federation was one of the last state institutions to remain outside of Putin’s authoritarian reach. It has steered an independent course and protected the currency throughout the painful shock of 2008 and beyond. Now caution appears to be thrown to the wind, if the president’s protégée embarks on a looser monetary policy, favouring lower interest rates over a stable currency and moderate inflation.

That is the worst-case scenario. For now, Nabiullina deserves the benefit of the doubt. The central bank’s bureaucracy is disappointed that one of theirs won’t be at the helm, but that’s not reason enough to dismiss the Putin appointee’s seriousness. A source of concern is that Nabiullina’s entire education in economics dates back to the days of the Soviet Union. One may wonder about the relevance of that academic background.

Her first problem will be how to respond to calls, from Putin and others, to lower interest rates to juice up Russia’s slowing GDP growth rate. The case for loosening is weak. The IMF believes that the Russian economy is running at near-full capacity, so any monetary stimulus would translate into higher inflation. Further, the Russian central bank is unlikely to change its plans to switch to a full inflation-targeting policy by 2015. Finally, easier money could weaken the currency, and even Putin may not be foolish enough to risk a crisis of confidence in the rouble.

In Russia, as elsewhere, there will always be debates on the right monetary policy. Central bankers always claim to be following the only possible course of action. Economists and politicians like to disagree. Nabiullina in June will become a central banker first and foremost. She wouldn’t be the first to let the job define her.

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Voters in Switzerland have adopted a law by referendum that will give shareholders extensive powers to limit pay for executives, force them to exercise their rights seriously and will establish across-the-board transparency on management compensation. Golden handshakes, or special bonuses like those awarded to chief executives after a merger, will be banned. Non-compliance with the new law will be a criminal offence punishable by jail terms of up to three years.

Corporate boards had better take notice: public outrage at what looks like persistent and unapologetic greed in the most severe economic slump in decades is forcing governments to step in. Throughout Europe, indignation at private excess has become a policy problem for administrations trying to explain the need to cut public spending.

The Swiss approved the new initiative by an overwhelming majority of 68 percent in spite of a multi-million Swiss franc campaign launched by business lobbies to fight it. The new regulation is in many ways stricter and wider than the European Parliament and member states’ decision last week to go ahead with a controversial law that will limit bankers’ bonuses, if only because it will hit all industries.

Self-moderation doesn’t work and self-interest continues to prevail. Throughout the Western world, corporate boards have paid lip service to the need to take into account public opinion, and nothing much has changed either in the banking industry – the symbol of immoderation – or in the wider corporate world. In desperation, governments are taking more forceful action – sometimes reluctantly: the Swiss referendum followed a failure by the country’s parliament to heed to public indignation.

Government intervention can often be clumsy, and it is fraught with the risk of unintended consequences. But it is the right of governments to legislate on social ills – and excessive and provocative private-sector pay has become one. Meanwhile the lobbies promising economic apocalypse have failed to make their case – and to scare anyone with warnings that “talent” – as they call it – may relocate to friendlier countries. It would be in the interest of all if they stopped turning a deaf ear to calls for decency emanating even from countries like Switzerland, which is hardly a hotbed of Soviet-style command economics.

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

It has taken just a short week to expose British Prime Minister David Cameron’s stated European policy as lacking in both strategy and tactics.

The government’s defeat on the bonus cap the European Union has decided to force on bankers has shown how isolated London has become in the bloc’s decision-making process. The defeat of Cameron’s ruling Conservatives in a by-election, when they were pushed into third place by the anti-European UK Independence Party, has shown how divided the political right remains on Europe. And Herman Van Rompuy has thrown cold water on British hopes that the EU’s treaties could be renegotiated. It’s not the priority, the European Council president said, appearing to point to the door in noting that “there is an exit clause” if the UK considers its relationship with the EU unsatisfactory.

Britain finds itself without allies in Europe, and must now clearly explain what it feels is unbearable about the current situation, and why it can justify the radical option of an exit. Cameron’s plan had been to enter into renegotiation talks, and then submit the results to a referendum in 2017 – if, that is, the Conservatives are still in power. But if the treaties aren’t renegotiated, what will his position be? The only choice that would be left to voters is one of a brutal in-or-out of the EU. And in that case, what would Cameron advocate? Continued membership that would make him lose face? Or would he shoulder the responsibility of the consequences of a radical exit?

The Eastleigh by-election results will be scrutinised in European capitals for possible clues as to what Cameron could do next. His rather half-hearted anti-European statements haven’t helped him contain UKIP. So will he change course or up the rhetoric? In the latter case, events could accelerate, leaving the prime minister in a situation he may not like but can’t avoid – leading to an earlier than anticipated “brexit”. If, on the other hand, Cameron opts for a less strident stance, he will be in the position of a leader trying to explain to his people why they are wrong – and why he himself has been so careless.

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The downside of democracy is that people take it seriously. The Italians have spoken, in their effervescent, yet rather clear way. Europe’s powers-that-be are sorry that the “pro-reform parties” didn’t win a governing majority in Rome. The vote has opened weeks of political uncertainty the country could do without. Whatever its next government, and no matter how stable it proves, Italy will pay a price if it fails to reform.

The group of “austerians” who currently rule in Brussels and Frankfurt, on the other hand, should also consider reforming their ways. Their harsh sermons on austerity, and their overt preference for the “technocratic” government of Mario Monti, which bordered on meddling, contributed to the current mess.

Italians have rejected the rule of technocratic reason, the canons of which are elaborated in the corridors of the European Commission and the European Central Bank. Who can blame them and what has reason done for them? Technocracy has left Italy with an 8 percent unemployment rate and GDP at 8 percent below its 2007 peak.

It may be that Italians remembered how Monti’s predecessor, the indefatigable Silvio Berlusconi, had to go in November 2011 after a coup orchestrated by France, Germany and the ECB. Sunday’s elections could simply mean a return of Italian politics to Italians. For better or worse, this is as it should be.

The priority of the next government should be growth – the election does not change much. Whoever is in power will be helped by Monti’s fiscal legacy, a primary surplus of more than 3 percent of GDP. And any government will be constrained by the stick of the market and the carrot of the ECB.

Yields on 10-year Italian government bonds rose to 4.8 percent on Tuesday but they remain 2.5 percentage points below their crisis high in November, 2011. And the prospect of ECB intervention will calm nerves as long as the Italian government doesn’t embark on irresponsible policies.

Meanwhile, the best thing Europeans can do is remain silent when a country decides it prefers democracy and growth to technocracy and austerity.

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Renault was known in the old days, as France’s “social laboratory”. The carmaker’s powerful unions and state ownership guaranteed high pay, generous benefits, and short working weeks, occasionally interrupted by legendary strikes. Then globalisation, privatisation and a five-year slump in European car sales made the lab’s experiment unaffordable.

In the latest of a long line of restructuring decisions, Renault has announced that it plans to cut 7,500 jobs, or 14 percent of its French workforce, by 2016. It hopes to achieve this without compulsory redundancies, as long as the company’s still-powerful unions agree on a productivity boost.
 French pride will be hurt, as the announcement comes two months after a decision to create more than 1,000 jobs in neighbouring Spain – a sign that the reforms in the euro zone’s so-called “periphery” are beginning to work.

The French government has so far refrained from commenting on Renault’s latest decision. That silence comes as a welcome surprise in a country still fixated on the idea that industry expresses economic might. Renault’s competitor Peugeot, which is closing a plant in France, and steelmaker Arcelor-Mittal, briefly threatened with possible state takeover because it is shutting a money-losing mill, weren’t as lucky.

François Hollande, the French president, has recognised there’s a problem with French competitiveness and is trying to address it, albeit timidly. A recently signed agreement between unions and employers’ representatives opens the way for some labour market liberalisation. Yet the government has shown more interest in preserving the current industrial fabric – and less in fostering a welcoming climate where high-value services, for example, would thrive. France shouldn’t obsess about keeping the jobs of the past but try to create those of the future. Or its social labs will become museums.

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Tax heaven can’t wait. Vladimir Putin has seized on an inebriated joke from his good friend Gerard Depardieu and granted the French actor Russian citizenship, by presidential decree. Depardieu announced a month ago he was leaving France for Belgium because of the 75 percent tax rate sought by the French government on higher incomes. The uproar that followed – from both supporters and outraged critics – only confirmed Depardieu’s intention, which he maintained even after a French court struck down the new tax rate.

Depardieu should jump on the opportunity to make his home in one of Moscow’s posh neighbourhoods, because this looks like a deal made in heaven for both parties. The Putin regime scores a public-relations coup by showing Russians their country is still attractive to some – and not only, as in the past, to British-born KGB spies. In the weeks since the joke began, both Putin and Prime Minister Dmitry Medvedev have gone out of their way to show they took the matter seriously. Medvedev even promised Russia would not change its 13 percent, flat income tax rate if Depardieu chose Moscow.

As for Depardieu, who also boasts of his friendship with Fidel Castro, Hugo Chavez and Chechen autocrat Ramzan Kadyrov, he would find not only a tax heaven even sweeter than Belgium, but a regime closer to his liking. The actor would also find a population that tends to be less judgmental about the type of exuberant behaviour for which he has made headlines of late. Furthermore, the star’s earthy outlook on life has taken him closer to Russian oligarchs than to the refined left-bank intellectuals who adored him 30 years ago. Finally, there’s no denying that emerging markets are where the future lies for Depardieu, whose domestic audience has dwindled. All reasons why he should seize the moment – before fickle Vladimir changes his mind.