Opinion

Thinking Global

The growing Franco-German schism

May 13, 2013

Germany’s Chancellor Angela Merkel talks with France’s President Francois Hollande (R) at the European Union leaders summit in Brussels March 15, 2013. REUTERS/Laurent DubruleTaxicab2

Occasionally a public opinion survey surfaces that signals a seismic event. That is the case with a new report from the Pew Research Center 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 75 percent 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 Center. “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 56 percent, compared with 45 percent in Germany. French unemployment is 11 percent, more than double Germany’s 5.4 percent.

France’s trade deficit widened to $87.7 billion in 2012,  while Germany posted a trade surplus of $246 million billion. 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 jhard 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.

 

PHOTO (Insert A): Germany’s Chancellor Angela Merkel at the European Union leaders summit in Brussels October 19, 2012. REUTERS/Christian Hartmann

PHOTO (Insert B):Helmut Kohl (R) stands hand in hand with former French President Francois Mitterrand (L) during their visit to the former Verdun battlefields, September 22, 1984. REUTERS/File Photo

Comments
6 comments so far | RSS Comments RSS

In broader scope, 150 years old social contract needs an amendment. People should work less for more money, not the other way around. Imo, this will kick in, eventually and in one way or another.

It should be clear though, competitiveness as envisioned and interpreted by German policymakers and ECB (troika) revolves around such meek concepts as ”mini jobs”.., it is effort not to remove, but to enforce structural failures that led to Dhaka building collapse. While easily noticeable today, the full scale of correction is yet to unfold. It seems to me that strong weakness of austerely hurt European consumers has more than enough potency to affect the globe.

As for market pressure, these folks that bowed to it and hurt their own constitutes in process are being removed from the political scene, needless to say game changes as new players are introduced. It’s often said that southern parts of Europe live beyond their means, yet the fragmentation that, among other things causes frugality if not poverty, also keeps households debt clean. This is in stark contrast to the north and… well, as said, some realizations are yet to kick in.

Either way, it’s a good read Frederick, thanks.

Posted by satori23 | Report as abusive
 

History repeats itself. The horror of WW1 inspired the foundation of the League of Nations which was all but forgotten before WW2. The horrors of WW2 then inspired the idea of the EU which is now starting unravel as well.

Posted by pbgd | Report as abusive
 

“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.”

“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”. So of the “social democracies” German workers seem to be the only ones who actually EARN their “social benefits”.

This would seem to indicate that satori23 is precisely wrong. All but Germany are going to have to increase their productivity. That means working more for the same or less money.

Mathematics is soooo insensitive, isn’t it?

Posted by OneOfTheSheep | Report as abusive
 

@OneOfTheSheep

Reinhart and Rogoff provided the study that shows how assessments depend on scope of data you’re willing to factor in.

Seven million people in Germany works on ”mini jobs”, these imported slaves get no benefits whatsoever; they do provide some competitive edge though.

Consumer debt in Denmark, Netherlands.., is around 250 percent of available income. Talk about living beyond your means…

Regardless, my opinion on working hours and slave wages has more to do with humanity than economy.

Cheers,

Posted by satori23 | Report as abusive
 

@satori23,

Germany is a whole lot smarter and honest than America with it’s “guest workers”. They say up front: “You want yo work here, here’s the deal: You work. No path to citizenship, ever. If and when Germans want ‘your’ job, they get it. If and when you have no job, leave. Sign here.”

I agreed with you on Denmark and the Netherlands when I wrote: “So of the “social democracies” German workers seem to be the only ones who actually EARN their “social benefits”.”

There is NO “humanity” in economics. That’s why it is called “the dismal science”. You are one of those dreamers that believe in “human dignity”, an oxymoron if ever there was one.

Faced with a shortage of food and rampant dissatisfaction Captain John Smith told early American settlers: “Those who don’t work, don’t eat.” And so under strict and enforced discipline the colony survived.

Over recorded history the average standard of living the world over has never been higher. Even those on the bottom of the pile with no crops, no land, no education, no skills, no job and no prospects, who producing NOTHING but more of themselves, feces and urine, receive more than enough food to survive from the rest of the world.

There is still hunger and starvation because of “local politics”, corruption and incompetence. No one works to improve their own “bad situation”. The very concept of
personal responsibility” is utterly foreign to those of historic and perpetual dependency.

I would not be surprised to someday see a “Union of manna eaters” through which their “right” to a voice in the flavor and quantity “due” each” can be demanded.

When there is enough complaint about that which is free, all incentive to provide same disappears. All choices have consequences, whether direct or indirect.

Posted by OneOfTheSheep | Report as abusive
 

Speaking of consequences, you can believe in ”human dignity” or whatnot as much as you believe in this world of ”inhuman malice” or whatever you’ve described above, yes?

In the end, we’re fighting for our beliefs all the time and every once in a while there’s a shift in our belief systems.

Cheers,

Posted by satori23 | Report as abusive
 

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