9 May 2017

The recent election of Emmanuel Macron to the French Presidency has sparked heated discussions about the future of Europe -not only did he defeat the Eurosceptic Marine Le-Pen who vowed to take France out of the Eurozone, but he did so with ambitious suggestions for EU reform and closer economic integration. His proposed reforms include the creation of pan-European bonds, the establishment of a European finance ministry, and the introduction of EU-wide unemployment insurance policies.

The most crucial factor for the successful implementation of Macron’s proposed reforms will be the stance adopted by Germany. Hoping for a revival of the Franco-German pillar as the driver of European integration, Macron is expected to visit Berlin in his first official trip as President of the French Republic. The signs from Germany, however, so far indicate that his vision will likely be met with caution and scepticism, not least because both countries are in the middle of an election period. More fundamentally, Macron’s proposals run counter to some long-held tenets of Germany’s European policy, such as its commitment to keeping the deficit below 3% of the GDP, and its objection to the idea of Eurobonds. It is doubtful whether France’s new President-elect will succeed in bringing about such a radical change in German policy as he envisions. The reactions of German politicians and press in the immediate aftermath of his election seem to suggest the opposite.

Amid their relief over the defeat of Eurosceptic Marine Le Pen, the German press generally welcomed Macron’s victory with reservations about his ability to carry out his reform programme, both at the domestic and the European level. In an editorial at the Frankfurter Allgemeine Zeitung, Klaus-Dieter Frankeberger posed a key question about Macron’s prospects in government: “With whom can he rule in future, to implement his reform-oriented aims?” Separately, the daily Das Bild picked up on the issue in the minds of its German audience, asking, “How expensive will he be for us?” What they are essentially asking here is the extent to which the German government will be willing to support Macron in his endeavour to rebuild the French economy and the Eurozone. Elsewhere, the paper argues, “Macron has already made known that he will need support from Berlin for his reforms”, and wonders whether Germany would be asked to pick up “the delayed bill” for French President Jacques Chirac’s support of the German government in their “deficit battle with the EU Commission” in 2002.

Germany’s political establishment has come out equally reserved about Macron’s vision. Merkel’s response to questions about her stance on his reform programme is rather telling in that regard. After praising him for his “courageous, pro-European campaign”, she said,

Given the situation that we have in Germany, I don’t think we must now give priority to changing our policy.

Her commitment to continuity is also reflected in “the German government’s negative view of Eurobonds”, which five years ago she vowed to resist for “as long as [she] lived.”

Unnervingly for Macron, Merkel’s primary opponent in the upcoming election, former President of the European Parliament Martin Schulz, shares her view on the issue. In a recent interview with the Financial Times, Schulz claimed that the idea of Eurobonds had been discarded with the introduction of the European Stability Mechanism, joking, “The only interesting thing about bonds is James.” Elsewhere, Vice President of the European Parliament and MEP for Germany’s Free Democratic Party expressed his own reservations about Macron’s plans, saying,

We are all happy that Macron was elected, but even under his Presidency there cannot be a mutualisation of debt.

More encouraging for Macron might perhaps be German Foreign Minister Sigmar Gabriel’s interview with the Rhein-Neckar-Zeitung, in which he said, “We should now work together with the French on a common French-German Investment Fund.” He added,

Investing more in Europe’s future is also good for us. Millions of jobs in Germany depend on our ability to sell our products and goods in Europe. Sixty percent of our exports go to Europe!

Also in line with Macron’s intention to relax austerity, he argued that austerity “destroys investment in growth and does not produce more, but fewer jobs. That is why the time of financial-political orthodoxy must be over.” However, his statement comes in contradiction with his party’s candidate for Chancellor, Martin Schulz, who has signalled that he will not soften Germany’s pro-austerity position if elected. In an interview with the Financial Times, he said Germany had a “great interest” in ensuring all EU member states achieved stable growth, “but to get there, certain reforms are needed in these countries.”

Such overly optimistic accounts were not absent from the German Press, with the Sueddeutsche Zeitung hailing the election results as an “almost perfect situation” for Merkel, in which she can be financially generous in her battle for a strong Europe. Separately, the “Handelsblatt” called the German government –and primarily Finance Minister Wolfgang Schäuble– to consider what they can do for the new French President, in order to make the French feel that “their new strong man can really have an impact in Berlin.” In light of the general German reaction to his election statements, however, it seems that these more hopeful assessments of Macron’s victory for the future of EU integration are misplaced. The German establishment’s relief stems from the aversion of the threat Le Pen would pose, rather than an overall excitement for Macron’s revolutionary proposals.