At last a good Franco-British row as we in France and Britain like them. To be clear, this not trivial: why is there so much severe judgment in Britain on France’s economic situation and so much leniency over Britain’s many economic problems? Yet heated as the rhetoric is, we should not allow this row to obscure an important question: is the recent Brussels meeting just another “last chance” (and useless) summit? Or does it portend a new Europe? Against the consensus, I think the latter.
For the first time since the euro’s creation and thanks to the gravity of the financial crisis, monetary union has a chance to be accompanied by a fiscal union, with convergence rules, collective discipline on balanced budgets and mutual surveillance. The task is incomplete, and the agreement will not put an immediate end to the crisis, but it is a step forward. The fact that, with the exception of the UK, all the non-euro countries have been willing to negotiate a new agreement out of fear of being marginalised is an expression of confidence in the single currency and Europe’s future.
So is the European Union, as conventional wisdom has it, under German rule? Some in France have answered the question referring to Bismarck, Munich and other reminiscences. The reality is simpler. Having been deprived for 45 years of the right to have national interests, Germany now defends them with the determination that her economic strength, resulting from courageous reforms, allows her. This is not a putsch but rather a normalisation. The Franco-German proposals on the debt crisis and Europe’s economic governance which led to the Brussels decisions were the result of hard negotiation between Nicolas Sarkozy and Angela Merkel on fiscal discipline and European solidarity, not the imposition of a German diktat. Moreover, if Germany wanted to dominate Europe it would need to offer more than austerity, fiscal discipline and automatic sanctions. It would require the political will and means to take risks in foreign policy, military and security issues, something the German political class might not be willing to go for.