Europe’s Odd Couple
EUROPE’S FIRST COUPLE President Sarkozy and Chancellor Merkel in Deauville, France, hashing out the crisis.
By STEVEN ERLANGER
Published: January 13, 2011
SHE MAKES FUN, in private, of the way he walks and talks, of his rapid, jerky gestures and facial grimaces. He mocks her deliberation, her reluctance, her matronly caution. She has compared him to Mr. Bean and to the French comic Louis de Funès, with his curly hair and large nose. He sometimes calls her La Boche, the offensive French version of “Kraut,” and goes out of his way to give her an embrace and a double-cheeked kiss in the French fashion, the kind of contact that he knows very well, aides say, she cannot stand.
Yoan Valat/European Pressphoto Agency/Corbis
HOLDING, FOR NOW Their alliance is stabilizing for Europe but may become less essential in the near future.
Charles Platiau/Reuters, via Corbis
Chancellor Angela Merkel of Germany and President Nicolas Sarkozy of France having words before a Franco-German meeting in Paris.
While the agonies of the European Union — sovereign defaults, deficits and bubbles — unfold like a great wonk drama, at their core is something more intimate: the fractured tale of Angela Merkel and Nicolas Sarkozy. They have been photographed across Europe giving the appearance of happy partnership. They are the best hope Europe has for continued unity. But they do not like each other at all.
As with any couple in trouble, economic difficulty has added to the strain. Two years ago, at the beginning of the crisis, Sarkozy burst out in public, saying, “France is acting, while Germany is only thinking about it!” Later, before a European Union meeting in Brussels on the Greek bailout, the French president was in a rage at his inability to persuade Merkel to do more for that country. After yelling at the E.U.’s president, Herman Van Rompuy, he threatened to boycott the meeting, muttering, according to French officials, “The Germans haven’t changed.” Later, when Sarkozy took camera crews in with him to a meeting, Merkel insisted they leave and, aides said, told Sarkozy, “I won’t let you do this to me.”
So it is not an easy relationship. But they know that they need to keep going for the sake of the kids — that is, for the sake of Europe. They have instructed their top foreign-policy advisers, Jean-David Levitte and Christoph Heusgen, both consummate diplomats, to make the relationship function. Some of the symbolism is a stretch — joint cabinet meetings, ceremonies at the Arc de Triomphe and the Berlin Wall. But there is an extraordinarily close coordination between the two staffs, and before every major European Union summit meeting, Sarkozy and Merkel hash out a joint position to take to the other 25 member states. This isn’t very democratic; it probably isn’t very pleasant either. Yet if the European Union is to function, Sarkozy and Merkel have to get along.
The Sarkozy-Merkel relationship matters because the challenges they and Europe face are both enormous and complicated, combining dismal economics, national pride and anxious electorates. They need to work out whether states that share a currency can still have independent fiscal policies — or, put differently, whether a currency union is viable without economic and even political union, and if it isn’t, whether it should be preserved. Behind this seemingly technocratic challenge, of course, are profound questions of democracy and citizenship, of national identity and self-determination and of the right way to handle Europe’s many ghosts.
Consider the meeting of Sarkozy and Merkel last October at the French seaside resort of Deauville. As they walked on the beach, they considered how to stabilize the European economy. The European Financial Stabilization Facility had kept Greece and Ireland from collapse, but it was ad hoc. Sarkozy wanted to extend it without touching the E.U.’s basic treaty. Merkel said that, constitutionally, she could not commit Germany to such an indefinite responsibility without a treaty change. She also did not want private investors to think that their national-bond investments were guaranteed a bailout if things went bad; she wanted private bondholders to face the prospect of a “haircut,” as the phrase goes, in the event of default.
Merkel committed herself to a permanent financial backstop, one whose stability would inevitably be based on the stability and solvency of Germany itself. Sarkozy agreed that with the new mechanism, beginning in 2013, investors would take some of the losses on bonds in insolvent euro-zone nations. That implied that some countries could actually default, and gave a strong signal to investors not to put money after 2013 in the bonds of countries like Greece, Spain or Portugal. The decision infuriated the European Central Bank chief, Jean-Claude Trichet, who predicted, accurately, that it would shake the markets and endanger Ireland.
But there was little Trichet or the plan’s many other opponents could do. Merkel is determined to make fiscal discipline the price of German credit. While Merkel did agree to drop her proposal for automatic penalties for countries that broke fiscal rules, she also refused to consider suggestions for a general “Eurobond” backed by all members. Many European countries like the idea of a Eurobond, because it might prevent private markets from trading on the differences between national economies and policies. But it would do so, ultimately, because of the strength of the German economy and its government’s own legendary prudence (and it would raise Germany’s own borrowing costs). That was not an obligation Germans wanted to take on. So Merkel said no.
As Ulrike Guérot, a German analyst once married to a Frenchman, puts it, Germans “sublimated hegemony. But we’re dropping the sublimation now.” She laughed, then added: “Of course, this doesn’t sound nice to others.”
A senior German official, however, says Sarkozy’s ambition to lead and his taste for big ideas — like his plans for the G20 this year to re-examine the role of the dollar and the regulation of food markets — are attractive and help Merkel. “She brings him down from 120 percent to 75 percent, and then they try to do half of that,” he told me. Sarkozy also sees an important role for himself in tethering Germany to the European Union, helping Merkel to resist demands at home that Germany stop financing anyone else. Anne-Marie Le Gloannec, a political scientist and German specialist at the Institut d’Études Politiques in Paris, says: “Sarkozy is catching Merkel from floating Germany too far away, compromising to try to pull her back into the European framework. But she needs this, too.”
BORN ONLY SIX months apart, the two could not be more different in terms of personality and worldview. Merkel, 56, grew up in a left-wing household in the farthest northeastern corner of Communist East Germany, in the Protestant flatlands where the Russian wind whistles. She learned to speak Russian and Czech. She is a physicist; her second husband is a chemist, a quiet professor who keeps to himself; she has no children. After the unification of Germany, she was an apprentice to Helmut Kohl, his “underestimated maiden” from the East, and she moved to Berlin — itself considered un-German, in a way, conquered territory on what is thought of as the barbarian steppe, far from the rich soil of German culture.
It was from Chancellor Kohl that she learned the importance of pandering to French vanities about being the true beating heart of the European ideal. And then when Kohl got into trouble, his Eastern maiden became Germany’s first female chancellor.
That is when she had to face Sarkozy. “She’s a scientist, almost like a German cliché, planning everything, going step by step, unemotional, not a show horse,” Stefan Kornelius, a senior editor of the Süddeutsche Zeitung, told me. “But Sarkozy’s the kind of macho man that she doesn’t like at all. And she and the chancellery are irritated by his jumping from issue to issue, his lack of attention, his inability to do German systematic work. She’s a technocrat with a hidden husband, and he’s flamboyant, with a beautiful woman” — the singer and former model Carla Bruni — “at his side.”
Sarkozy has been much criticized for his love of money and gaudiness. A wealthy lawyer with wealthy friends, he lives a gilded French presidential life, surrounded by staff members always ready with a glass of freshly squeezed orange juice. Merkel still lives in the central Berlin apartment she occupied before her election and can sometimes be seen out shopping, or stopping into a favorite French-style restaurant, Borchardt, for a quick meal with her husband.
Merkel has surrounded herself with strong women and technocratic men, and she manages men very well, a senior German official told me: “She takes them by their biggest weakness, which is ego, and caters to it to a point, and then coldbloodedly, like an aikido fighter, uses that energy and pulls it in her direction. She doesn’t function in terms of male mechanics, all ego and pumping up yourself and shouting; these male tools fail with her, and she uses these to her advantage. And those who team up with her, she lets take a lot of the credit.” It sounds similar to how she handles the French president. Unlike Sarkozy, famous for absorbing a complicated brief as he walks to a meeting, Merkel is an assiduous worker and normally the best-prepared person in the room. Sarkozy rules France like a king; Merkel is a coalition politician who wants to bring others along. The Germans like to tell a joke about Sarkozy piloting a plane and informing the passengers he has good news and bad news: “The good news is that we’re ahead of schedule. The bad news is that we’re lost.”
There was a time when the trans-Atlantic tie enabled Europeans to find direction in the world as part of an American-led, American-protected liberal West. That moment seems to have passed, leaving Europe to find its own way. The United States never did take more than a mild interest in European unification. In a meeting with European journalists in 2005, President Bush said airily that he appreciated “how hard it was to get a federalist system in place that was balanced and fair,” adding that “every time I meet with the European leaders, I ask them how it’s going.” President Obama’s approach has not been much different, particularly as the Europeans have made it clear they are not eager to help solve the Afghanistan problem. In general, the Obama attitude has been: Europe, lovely place; European Union, lovely idea but wish it would do more on defense; euro, well, good luck with that.
FRANCE AND GERMANY, with their shared bloody past, are unlikely allies, and they have radically different notions of how Europe should work. France wants a state-dominated, centralized, bureaucratic Europe in its own image. France also maintains a Mediterranean attitude toward budget deficits, having last balanced a budget 35 years ago. Germany, a federal state with powerful regions, coalition governments and an influential constitutional court, wants a Europe of laws, discipline and fiscal probity, with a strong currency and real penalties for the spendthrift.
Long the financier of the European Union, Germany has made it clear that it will no longer pay for the mistakes and frauds of others. While Germany has always acted in its own interests, the Kohl generation interpreted those interests as being embedded in institutions like NATO and the European Union, which protected the new democratic Germany and kept its ambitions in check. But Germany, reunited, sees NATO as less necessary, even hollow. It needs the European Union less. And it is turning more toward the east — the old Soviet bloc and Russia — for energy and markets.
If centralized France has traditionally supported European Union institutions and currently advocates a form of “European economic governance,” federal Germany has become much less willing to subordinate national interests to European ones and has been a strong defender of national sovereignty, especially over budgets. In a recent speech in Bruges, Merkel spoke of the need to move away from “the community method,” led by the European Union’s Commission, to what she called “the union method,” in which the nation-states effectively take the lead in cooperating with the Commission and other E.U. institutions. “The ‘community method’ can only be applied in those areas in which the European Union actually has competence,” she said tersely, adding: “Where the community has no competence, the ‘community method’ clearly cannot be applied.” In other words, the E.U. should do only what it is authorized to do and can do well. Otherwise power should remain with the states.
If Germany speaks for Europe’s largely industrial Protestant north, France has always combined north and agricultural south. “Sarkozy is being the spokesman for the south, but he also understands that Germany has the clout,” Le Gloannec says. “So you have to say yes to some of what they want, but at the same time Germany can’t talk to all Europeans or take a public leadership role. In a way, the Germans really don’t know how to talk to others. She and he may be like Laurel and Hardy — different but complementary.”
As the euro crisis grinds on and the German economy continues to outpace the others, Sarkozy is paying more attention to the German model and giving in more to German demands. He is extremely anxious, aides say, that France is losing its prominence in the new Europe, slipping behind Germany to second-class status. Inside the French cabinet, Germany’s economic model, labor relations and capacity for technical innovation are prominent topics, with German standards — and the fear of losing Paris’s AAA bond rating — driving French reforms and budget cuts.
The cliché used to be that nothing happened in the European Union without French and German agreement. Today France and Germany are regarded as necessary but no longer sufficient. Sarkozy fears, with some justification in a bigger European Union of 27 nations and a euro zone of 17, that French agreement may soon not be needed at all. The new E.U. members to the east are more German in their aspirations than French. The Czechs and Slovaks, as well as the Balts, are all fiscally conservative. Even Poland, which has such an emotional tie to France, sees its economic future with Germany.
THE FUNDAMENTAL problem is that Germans are worried that their manifold sacrifices for national prosperity will be dumped down the drain of Europe’s poorest and most profligate. Despite Germany’s economic success — almost a second economic miracle, after the expensive absorption of East Germany — Merkel therefore has serious political challenges. “The Germans have discovered that they are the only serious global economy in Europe, capable of competing with the United States and China,” says John Kornblum, a former American ambassador to Germany. “But they’re afraid their world is coming apart around them, and what they thought would support them, the European Union, is dragging them down. They realized that the stability pact isn’t working, that the Greeks were lying and maybe others, too, that their banks and French banks were deep in the muck, and they understood this is going to cost a lot of money. So they are behaving in a very demanding way, which smells to some like nationalism. But it really is fear.”
So while Merkel says she is deeply committed to the European Union and the euro, she must, as a politician, manage the angst. A strong minority of Germans feel she has already gone too far down the road of bailing out Europe’s “Club Med.” State elections in 2011 could further hamper her ability to make bold decisions to protect European unity. And she must always be mindful of the German constitutional court, which plays a very strong role in interpreting treaties like those that bind Germany to the E.U.
Sarkozy’s political problems are also legion and likely to worsen as austerity programs bite. To win re-election in 2012, Sarkozy needs first to reunite the right behind him, in the face of a vibrant challenge from the far-right National Front and divisions within his own center-right party. His main opposition, the Socialist Party, is divided, and both France and Germany are waiting to see if Dominique Strauss-Kahn, the managing director of the International Monetary Fund, will run for the Socialist nomination. It was Sarkozy who pushed Strauss-Kahn to take the I.M.F. job, figuring he was getting a rival out of the way. But the euro crisis has made Strauss-Kahn, 61, even more important, giving him the international reputation and gravitas to challenge Sarkozy and even win. While Sarkozy tried to keep the I.M.F. and Strauss-Kahn at a distance — the I.M.F. is based in Washington — Merkel insisted that only the I.M.F. had the experience to make the Greek salvage operation credible. Strauss-Kahn has been crucial to the Irish bailout as well and will have a strong part in any future defense of the euro. He is a German speaker and has been a key negotiator with Merkel. With a German almost sure to take over leadership of the European Central Bank in November, and another German due to take over the secretariat of the European Union’s Council of Ministers, there should be even more support for Merkel’s vision.
With Germany ascendant and looking both inward and eastward, Britain staying out of the euro zone and France carrying less weight, the question of German leadership is now at the fore. Germany has traditionally avoided trying to lead Europe from the front; memories from World War II, though faded, have not yet gone away in the rest of the continent. Even now, anti-German feeling is rising among Greeks, Portuguese and Spaniards, who feel abandoned, even betrayed, by Berlin.
Still, Merkel is going to have to exercise more leadership if the euro is going to be saved, even if she still hides to some degree behind France. And active German leadership of the E.U. means a clearer understanding that politically difficult compromises are going to have to be made and that money will have to be spent and promised — all in the face of growing German discontent.
John Kornblum, the former American ambassador in Berlin and still a resident there, sees a model for Germany in the United States and the way it helped keep Europe together after the war, mediating disputes and finding compromises. “The Germans don’t see it yet,” he says. “But they will have to take on the role of the United States in Europe, and have the same kind of balancing role we had for such a long time.” At that point, Germany’s marriage with France won’t matter so much anymore.
Steven Erlanger is the Paris bureau chief for The New York Times and a former bureau chief for The Times in BerliEurope’s Odd Couple - NYTimes.com
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