Christophe Ena/Associated Press
PARIS ? Armed with a new mandate and a solid legislative majority, France?s Fran�ois Hollande is off to do battle with Germany in the name of growth, prosperity and human decency. Or that?s the popular image, at least, of what is in fact a more delicate and nuanced relationship between the new French president and the German chancellor, Angela Merkel.
The partnership between Europe?s two largest economies has been vital to the functioning of the European Union and the 17-nation euro zone. And it has thrived under leaders from similar parties or different ones; the euro itself is a French-German confection.
But the marriage is now under considerable strain, and France is very much on the defensive, not just because of the endless euro crisis, which is now undermining its southern European allies Spain and Italy, but because of the growing weakness of the French economy as well, which makes the French-German couple less than equal.
Pascal Malville, 49, selling pastries at a Paris market, said he thought the Germans had it essentially right. ?Hollande will be obliged to yield to German power,? Mr. Malville said, ?because it?s Germany that?s on the good path.?
On Friday, Mr. Hollande will go to Rome to meet with Ms. Merkel and the Italian and Spanish prime ministers, Mario Monti and Mariano Rajoy, to discuss the euro zone crisis before next week?s European Union summit meeting. On the agenda are plans to develop cross-border banking supervision and a proposal from Mr. Monti to use the union?s bailout funds to buy sovereign debt to help hold down interest rates for countries like Italy and Spain.
It is not a new idea ? there are not many of those ? and Ms. Merkel has been reluctant to accept the proposal because it could be another form of blank check signed by German taxpayers. Mr. Hollande is determined to show the French that he is willing to stand up to Berlin, to push Ms. Merkel to contribute even more than before toward a lasting solution of the euro mess, which is both financial and institutional. He believes that the German prescription ? heavy on fiscal discipline, light on new spending ? does not fit the euro disease in a recession. And he sees himself as the leader of what he hopes will be a new wave of left-leaning social democratic governments in Europe after a long period of right-wing leadership.
The problem for Mr. Hollande is that Ms. Merkel, while expressing support for some of his milder growth initiatives, is pushing back in a way that challenges France to the core.
Mr. Hollande brings to the table an argument for collectivized debt, or so-called euro bonds, and for the European Central Bank to be able to loan directly to banks and to the European bailout funds. In general, he wants the bank to operate more like the United States Federal Reserve, able to act as a lender of last resort to guarantee the debts of euro zone countries.
In response, Ms. Merkel contends that these steps must be a result of a closer political and economic union, not a precursor to it. Shared debt can work only if there is shared decision-making over budgets, taxes and pensions, she says.
That is why Ms. Merkel is pushing to move ahead with the long-stalled process of European integration. As Joschka Fischer, a former German foreign minister and Green party stalwart, said, ?You can?t mutualize the debt without mutualizing sovereignty; you can?t have the financial benefits of a state without having one.?
But ?more Europe? would mean a considerable loss of French sovereignty over its national budget and the French financial system, an extraordinarily delicate issue for Mr. Hollande and his Socialist Party, which split badly on a similar issue in 2005.
?Merkel?s call for fuller political, fiscal and budgetary union in the euro zone, though without details, creates problems for Hollande,? said Thomas Klau of the European Council on Foreign Relations. ?Hollande will have to accept or reject a course to euro zone integration sooner rather than later, and that will revive the French debate over how much sovereignty to transfer to Brussels.?
In his tango with Ms. Merkel, Mr. Hollande is seeking support not just in Rome and Madrid, but even in Ms. Merkel?s backyard: last week, he invited leaders of Germany?s Social Democrats to Paris for talks.
By inviting her opposition, Mr. Hollande was judged to be sending a barbed message to Ms. Merkel, who openly supported his predecessor, President Nicolas Sarkozy, and refused to meet with Mr. Hollande while he was campaigning this year.
There are dangers, of course, in too much antagonism. ?Without a partner in Paris ready to cooperate, overcoming the crisis is not conceivable,? a front-page editorial in the Frankfurter Allgemeine Zeitung said this week.
Source: http://feeds.nytimes.com/click.phdo?i=0d88ea16fb8a1c12721b8ef26da4ddbc
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