Saturday, Sep. 26, 2009

Can France and Germany Fall in Love Again?

By Peter Gumbel / Paris

German Chancellor Angela Merkel won over German voters in a federal election on Sept. 27. Can she now be won over by a French charm offensive aimed at repairing the relationship that was once at the heart of Europe? That's the question being asked in Paris, where top government officials are openly talking about their desire to rekindle closer ties with their neighbors across the Rhine. Since the end of World War II the Franco-German relationship has been the motor of European integration, the driving force behind the creation of the European Union and, more recently, the introduction of the euro. But the ardor has cooled in this decade, particularly under Merkel, who has regularly struggled to conceal her irritation with French President Nicolas Sarkozy's grandstanding. Sarkozy, in turn, has often been impatient with what he considers Merkel's lack of resolve.

The sometimes tense personal rapport is a long way from the public shows of affection their predecessors staged, particularly Helmut Kohl and François Mitterrand, who movingly held hands in 1984 in a Verdun cemetery. There's been tension over policy, too. Charles Grant, director of the London-based think tank Centre for European Reform, points out that France and Germany have been at odds on issues from how best to reflate their economies during the economic crisis to the smartest strategies for dealing with Russia. (See pictures of Paris' expansion.)

But influential movers in France are now eager to put the relationship back on a friendlier footing. In a recent paper French think tank Institut Montaigne laid out an ambitious agenda for the two nations, arguing that a new impetus is needed if Europe's voice is to be heard in a world full of big new players, such as Brazil and India, and at a time when President Obama seems far more preoccupied with China and the rest of Asia than with America's traditional allies in Europe. Among other proposals, the think tank recommends that France share its U.N. Security Council seat with Germany, and that the two nations combine their diplomatic missions and staff. It also suggests that the two closely coordinate their budgetary and fiscal policies, merge the Paris and Frankfurt stock markets and issue a joint Eurobond totaling 100 billion euros ($145 billion) to finance long-term industrial and infrastructure projects.

None of this is, as yet, official French policy. But several top political figures close to Sarkozy, who was one of the first world leaders to congratulate Merkel on her re-election, argue that it's time France and Germany seized the reins in Europe again. Assuming Irish voters approve the E.U.'s Lisbon Treaty on Oct. 2, a decade-long debate over the E.U.'s institutions should come to an end later this year, opening the way for a new wave of change. "We've had a decade of institutional masturbation, during which everyone lost their public opinion," one French government minister, speaking privately, says. "It's time to move on and become more political again." (Read: "The E.U.'s Future: Back in the Hands of Irish Voters.")

There are signs his counterparts in Berlin agree. Merkel made a point of mentioning Sarkozy in her final campaign appearance on the eve of the election, and there's a growing belief that new joint initiatives could now follow. "There is a desire for a new spring in French-German relations — even if it's autumn," says Claire Demesmay, a France expert at the German Council on Foreign Relations in Berlin. Even the personal aspect of the relationship seems to be improving. In France, Pascale Joannin, general manager of the Robert Schumann Foundation, a think tank, says that while "Merkel is more Francophile than Sarkozy is Germanophile," the pair "have grown used to one another." Joannin expects swift action to coordinate the two nations' positions at the December conference on climate change in Copenhagen, and on fixing the top jobs at the new European Commission. Even before the election, the two nations worked together to push for a crackdown on tax havens and for bankers' bonuses to be curbed.

Read: "'Much Work' Ahead for German Chancellor Merkel."

See TIME's Pictures of the Week.

It may help that Merkel's hands are likely to be less tied in a coalition with the economically liberal Free Democrats than they were with the Social Democrats — a change that could push Germany closer to the French line on nuclear power and relations with Russia. But what isn't yet known is how warmly the Free Democrats will embrace closer cooperation with France. They won 14.6% of the vote, a record result for the party, and their leader, Guido Westerwelle, is likely to become the next Foreign Minister. His campaign focused on how to revive Germany's economy, and he was vague about broader European issues. In an interview with TIME before the election, Westerwelle didn't refer directly to France but talked about the critical importance of the E.U. as a political entity, not just an economic one. "If Europe hadn't achieved anything other than peace for this [postwar] period, it would already have been worthwhile," he said. But the E.U. could do more to improve its decision-making structure, he added: "Europe needs to be better. It should focus more on issues that have to be discussed at a European level and should hold back from questions that countries can decide." (Read: "Guido Westerwelle, Germany's Mittelman.")

On matters of business and finance, Westerwelle is far from sharing France's passion for government meddling. Indeed, his calls for German tax cuts and fiscal restraint to bring down the budget deficit is diametrically opposed to Sarkozy's plans to spend his way out of the crisis with a new gigantic government-bond issue. Still, when it comes to Germany's relationship with France, Joannin of the Robert Schumann Foundation points out that the Chancellery rather than the Foreign Ministry usually calls the shots. (Read: "Guido Westerwelle: Angela Merkel's Unlikely Partner.")

In the business community there is clear support for a closer relationship. Claude Bébéar, who heads the Institut Montaigne, is a former CEO of insurance giant Axa and a formidable corporate power broker. At a recent panel discussion in Paris, Léo Apotheker, the CEO of German software firm SAP, endorsed many of the institute's ideas and lamented that the recent financial crisis "showed the nonexistence of Europe." He also advocated merging the French employers' association Medef with its German counterpart, the Federation of German Industries.

The last time there was a push for deeper integration, it came from the German side, in the form of a 1994 paper authored by Wolfgang Schäuble, a close confidant of then Chancellor Kohl, and Karl Lamers, then foreign-affairs spokesman for Merkel's Christian Democratic Union. They outlined a new "core" Europe in which France and Germany would make up the inner "core of the core." The French never formally replied to that proposal. That was "a mistake," says Jean-Pierre Jouyet, the former French Minister for European Affairs who now heads the national stock-market regulatory agency.

Now France is pushing closer ties and Lamers, since retired, believes both countries have finally gotten the message. "Sarkozy has learned and realized that he, too, has made mistakes in the past," he says, citing the French President's initiative for a Mediterranean Union which caused irritation in Berlin in 2007. "There's an understanding on both sides now that the countries need each other."

With reporting by Henning Hoff and Catherine Mayer / Berlin

See TIME's Pictures of the Week.

See the Cartoons of the Week.