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Angela Merkel and Francois Hollande: Europe’s newest odd couple

GlobalPost, May 16, 2012

It started with a handshake, not a kiss. When Chancellor Angela Merkel and new French President Francois Hollande finally met in person on Tuesday evening, there was little of the warmth that marked her meetings with Nicolas Sarkozy in recent years.

Aides had downplayed the rendezvous as simply aimed at getting to know one another rather than about hammering out any policy. Yet the future of Europe could hinge on whether these two leaders find a way to work well together.

Rarely have two people met for the first time with so much baggage. Merkel refused to meet with Hollande during his election campaign, and made the highly unusual step of publicly backing his rival, fellow conservative Sarkozy. Hollande for his part seemed to be campaigning as much against Merkel as the incumbent, pledging to renegotiate the fiscal pact that she had championed.

Now the two have finally met face-to-face and the encounter seemed cordial if hardly warm. Following the ceremonial reviewing of the guard of honor – during which Merkel had to gently nudge Hollande in the right direction on the red carpet – the two held an hour -long meeting. They then addressed the throng of international journalists in a joint press conference during which Merkel remained stony-faced during much of Hollande’s comments, interspersed with the odd smile.

The pair did seek to downplay their differences and strike a friendly tone with Merkel even joking that the lightning that had struck Hollande’s plane on his way to Berlin was perhaps a “good omen.”

“I’m not sure whether there is sometimes more divergence perceived in the public realm than there really is,” the chancellor told the press conference. “We are aware of our responsibility, as Germany and France, for a positive development in Europe. Carried by this spirit I believe we will of course find solutions for the different problems.”

Both tried to show a united front on Greece, which risks ejection from the euro zone if it backs anti-austerity parties in the fresh elections likely after the parties failed to form a government. “Just like Frau Merkel,” Hollande said, he wanted Greece to remain in the euro zone while insisting that Athens meet the terms of the bailout agreement.

Yet when it came to the crux of the differences between the two, on austerity versus growth, it was obvious that the only thing that had been agreed so far was that they disagree.

After all, it remains to be seen how Merkel’s strict stance on rapidly reducing budget deficits can be married with Hollande’s plea for some kind of stimulus package to boost growth.

Hollande reiterated his promise to reopen talks about the fiscal pact, the agreement on strict budget discipline which he has said France will not ratify unless a growth element is also adopted.

“I said in the campaign, and I repeat today, that I want to renegotiate what was established at a certain moment,” Hollande told reporters. “Everything that can contribute to growth must be put on the table. I don’t want growth to be just a word, but tangible measures.”

He mentioned boosting competitiveness, as well as Euro bonds – essentially pooling the debt of euro zone members – something Merkel has so far flatly rejected.

He did not, however, mention tinkering with the European Central Bank’s mandate, surely a red line if ever there was one in Berlin.

For all the inauspicious beginnings, observers predict that the two will eventually hit it off. Both play on their modest, down- to-earth style and exude an air of pragmatism rather than charisma. Hollande depicts himself as “Mr Normal” in contrast to the Bling Bling of his predecessor Sarkozy, while the unassuming Merkel is often seen doing her own grocery shopping. And both are said to have a wry sense of humor in private.

Furthermore, Hollande’s gesture of appointing Germanophile Jean-Marc Ayrault as his prime minister will have gone down well in Berlin.

Yet, it is hardly a meeting of equals. Merkel is an old hand in European politics now, in her seventh year in office, while Hollande’s previous executive experience has been confined to serving as mayor of the small town of Tulle.

Furthermore Germany is the EU’s economic powerhouse, with its export-driven economy keeping the rest of the euro zone out of recession, according to figures released on Tuesday. And Berlin has long been calling the political shots in Europe, with the fiscal compact being dreamed up by Merkel, as a way of preventing EU states from getting into deeper debt in the future.

At the same time Merkel is increasingly isolated in Europe, as there is a growing realization that austerity is choking off growth. Hollande knows that other leaders, including conservatives like Italy’s Mario Monti, also want Berlin to budge on its debt reduction fixation.

Hollande came to Berlin straight from his inauguration ceremony in Paris. After beating Sarkozy on May 6 he will feel he has a mandate from the French people to push for a change of direction in Europe. Yet he also faces a tough economic situation back home, with just 0.1 percent growth in the first quarter and growing unemployment, now at a 13-year high of 10 percent. If the economy were to contract even further, it could make it very difficult to fulfill many of his campaign pledges, such as reversing Sarkozy’s pension reforms.

Merkel has her own problems, despite the strong economy. Her party, the conservative CDU, has just suffered a bruising defeat in the state of North Rhine-Westphalia. Her coalition is increasingly fractious, with Bavaria’s CSU leader Horst Seehofer publicly slamming the CDU candidate in North Rhine-Westphalia Norbert Roettgen on TV for his campaign, while the FDP is unpredictable due to an ongoing leadership crisis.

The fact that she needs a two-thirds majority in the Bundestag to ratify the fiscal compact means she is dependent on the opposition SPD. And while the party has broadly backed her euro policy, it has been emboldened by Hollande’s victory and the strong showing in NRW. On Tuesday the party’s leaders said that they would delay the vote on the fiscal pact, originally scheduled for late May, saying it wanted to see concrete growth measures as well as austerity.

That would leave time for Merkel and Hollande to agree to some sort of compromise solution.

The pair said they will seek an agreement ahead of the next big summit of EU leaders in June. “It will be very important that Germany and France present their ideas together at this summit, and we have talked about the preparation,” Merkel said.

They will see each other before that, meeting at an informal dinner of EU leaders on May 23, as well as at the forthcoming NATO and G8 summits.

However, Hollande is unlikely to show much willingness for compromise with Berlin just yet. After all his party is facing legislative elections in mid June and he will want to make sure he is not seen to be backsliding on campaign pledges.

Hollande wants his five-year term to start with his Socialist Party securing control of the National Assembly so that he can push through his agenda. Otherwise he faces a frustrating period of “cohabitation” with a prime minister from the opposing camp, such as occurred when conservative Jacques Chirac’s presidency coincided with the premiership of Socialist Lionel Jospin from 1997 to 2002.

As such Merkel cannot expect Hollande to veer from his insistence on growth measures. And for all his unassuming manner, he could well prove to be a more difficult partner than Sarkozy in the long run.

Nevertheless Merkel is also likely to stand firm on many issues. Asked on Tuesday night if she feared Hollande’s campaign promises she replied coolly: “I am seldom afraid, as fear is not a good counselor in politics.”

Originally published on GlobalPost:  http://www.globalpost.com/dispatch/news/regions/europe/120516/angela-merkel-and-francois-hollande-europe-s-newest-odd-couple

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Merkel is vulnerable after disastrous state election

GlobalPost, May 14, 2012

BERLIN – It is a paradox of German politics that Chancellor Angela Merkel remains overwhelming popular, while the parties that make up her governing coalition lurch from one defeat to the next in a string of regional votes.

That was made evident yet again on Sunday when her conservative Christian Democrats (CDU) suffered their worst ever result in Germany’s most populous state of North-Rhine Westphalia. The party only managed to get just over 26 percent of the vote in the snap election, shedding almost 9 points since securing 35 percent in the last vote there in 2010.

Her junior coalition partners the Free Democrats did manage an impressive comeback, securing a surprise 8 percent and managing to return to the state parliament thanks to its dynamic leader in the state, Christian Lindner. However, the disastrous performance by the CDU will allow the Social Democrats and Greens to form a stable coalition, after operating as a minority government for the past two years.

The SPD won 39 percent of the vote in what had been its traditional heartland, largely thanks to the huge popularity of its leading candidate, state governor Hannelore Kraft. The Greens only fell back slightly, down from 12 to 11 percent, a relief given the strong showing of the Pirates who stormed into their fourth regional parliament after securing almost 8 percent. The post-communist Left Party only attracted just over 2 percent, compared to over 5 percent in 2010, and thus failing to enter parliament.

North Rhine-Westphalia is often a strong indicator of the national mood. When former SPD Chancellor Gerhard Schroeder suffered a defeat there in a state vote in 2005 he called an immediate snap general election, which paved the way for Merkel’s rise to power. Continue reading

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Could Hollande bring back social democracy?

GlobalPost, 28 April, 2012

BERLIN — It is hardly surprising that the German Social Democrats are delighted with the prospect of a Francois Hollande victory in France’s presidential election. There are, after all, very few center-left parties in power in Europe these days.

The SPD will be hoping that if the Socialist Party candidate beats incumbent Nicolas Sarkozy on May 6, it will signal a European comeback of sorts for social democracy, and give them a boost not only in forthcoming regional elections, but next year in the national vote.

“Obviously the SPD would feel that a Socialist victory in France would be very good news, and there is often a certain spill-over effect,” says Thomas Klau of the European Council on Foreign Relations. “But on the other hand, the impact shouldn’t be overestimated either.”

He points out, for example, that Spanish voters have just voted out the Socialists. “There is no question of a general trend in Europe.”

At the same time, with a possible Hollande victory, some center-left parties may start to feel they are winning the argument about growth in the euro crisis. While the SPD in Germany broadly supports Chancellor Angela Merkel’s approach — backing her on the bailouts, for example — they have also demanded that she think beyond a narrow focus on savings and cuts. Continue reading

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Sarkozy and Merkel bond cools ahead of French vote

GlobalPost, April 21, 2012

BERLIN— It was nice while it lasted. But “Merkozy,” it seems, is no more.

Europe’s odd couple has hit a rough patch. And it would be difficult to revive the relationship, even in the unlikely event that one half of the pair survives his tough political battle in the days ahead.

As French President Nicolas Sarkozy faces Socialist challenger Francois Hollande in the first of round of the presidential election on April 22, his campaign has turned increasingly populist in tone. This had already caused some unease in Berlin, but the fact that the French president broke an important promise he made to German Chancellor Angela Merkel not to bring up the role of the European Central Bank in the euro crisis has caused even more of a rift.

It looks like the end of an unlikely alliance forged over the course of the past few years.

It was hardly surprising that the outspoken, hyperactive French president with the bling lifestyle and the supermodel wife, did not, at first, hit it off with the modest, cautious German chancellor who still does her own grocery shopping. But as the Franco-German relationship became increasingly important to both of them, the initially frostriness began to thaw.

After all, Merkel needed an ally to avoid the perception that Germany was calling all the shots in the euro zone. Sarkozy wanted to retain France’s traditionally strong political role in the EU despite the reality of Germany’s growing dominance and France’s waning influence. Continue reading

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