Opinion

Thinking Global

The growing Franco-German schism

May 13, 2013 22:22 UTC

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.

Angela Merkel, Europe’s weary mountaineer

Jul 6, 2012 14:44 UTC

To help illustrate Germany’s historic dilemma as it calculates the risks of rescuing Europe, Ronald Freeman, a London banker friend, conjured up an image of Chancellor Angela Merkel as a weary mountaineer leading a perilous rock climb. Still some distance from safety, Merkel alternates between shouting instructions to those hanging behind her on a taut and fraying rope, and wondering whether to take out her knife and cut loose some of the burden.

What Merkel must calculate, says Freeman, a former European Bank for Reconstruction and Development first vice-president, is how to get everyone to the top of Mt. Europe without imperiling herself. “Until Germany agrees to switch from specific and inadequate bail-outs of over-indebted sovereigns to the unlimited back-up that only the European Central Bank can provide, the crisis will not end,” he says, leaving countries like Greece, Spain and Italy dangling below an ambivalent Germany.

Investors last week applauded Germany’s agreement to provide weaker climbers the equivalent of a temporary ledge to stand upon: access to Europe’s permanent bailout fund to provide capital directly to troubled banks anywhere in the euro area. In return, governments agreed to give banking oversight to European authorities so that they could supervise and potentially dismantle banks.

In Spain, Germany is villain, not savior

Jun 4, 2012 20:30 UTC

MADRID – What brought me to Spain during the most threatening week of the country’s recent history was an invitation to speak about one of Europe’s darkest hours a half-century ago, pegged to the Spanish-language publication of my book Berlin 1961: Kennedy, Khrushchev, and the Most Dangerous Place on Earth.

One of Spain’s most senior government officials was quick to make the connection between 1961, when Germany’s postwar division was deepened by the Berlin Wall, and the historic moment today, when a reunified Germany, acting from its most powerful European perch since the Third Reich, will determine whether the continent will be newly divided – this time along North-South lines, with Spain outside the euro. But more sharply, this official – who won’t speak for attribution as he must deal daily with German counterparts – believes Germany’s actions (and, more frequently inactions) have put the euro and the European Union project itself at risk.

It is in that context, he said, that Spain has put forward an urgent plan for a European banking union, complete with a pan-European deposit guarantee fund and banking supervisor. The idea has now been endorsed by the European Commission, European Central Bank President Mario Draghi, Italy, Ireland and others. German Chancellor Angela Merkel has not followed suit. Spanish officials are lobbying hard for this idea because they believe it’s urgently needed, but also because they hope to force Germany’s hand in a manner that would move markets and reverse Spain’s downward spiral. So that his purpose couldn’t be missed, Spanish Prime Minister Mariano Rajoy over the weekend surprisingly called for centralized control of national budgets in the euro zone – teeing up a crucial auction of Spanish treasury bonds this Thursday.

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