Yes or no

Should Germany Cough Up for France?

PK Deutsch-französische Wirtschafts- und Finanzpolitik
A friend in need is a friend indeed. Source: DPA.

No! The EU already wastes billions and more cash won’t stop the spread of populism.

Whether Emmanuel Macron’s presidency will be a success or Ms. Le Pen will triumph in five years doesn’t depend on Berlin. Nor Brussels. It depends solely on the French, a point which shouldn’t need to be made but there’s so much confusion about the EU that not everyone is clear on that. Only the French can dig themselves out of their permanent state of crisis.

Mr. Macron knows that. He stresses that France has to reform its economy and get its public finances in order. But at the same time, he wants to see a new system of financial transfers in Europe. Countries with the euro should elect their own euro parliament that would then redistribute the billions, he says. French economist Thomas Piketty recently commented that in such a parliament, the debt discussion would be different if France, Italy and Spain formed the majority while Germany only represented 25 percent of the EU. Should Germany let that happen?

The whole idea of more money and power for Brussels is wrong. Europhobic populism isn’t only rampant in France, it’s also found in Germany, the Netherlands and Austria. The UK has already voted to leave and not because it wasn’t getting enough cash from Brussels.

The EU spends billions of euros and the outcome is rubbish. Researchers say money like structural funds don’t have any effect. Measured per capita, Greece has long been one of the largest recipients of European aid – then we hear Athens’ economics minister complaining that money from Brussels has done more to harm his country than help it. So would an even bigger apparatus to spend that money help?

With every euro Brussels hands out, the demand grows louder for a say in the politics of the recipient country. If we had a European unemployment insurance, which Mr. Macron has also suggested, could the French still get more welfare than Germany and for longer, as they do today? Nowadays, French workers retire at 62 – that would also have to change. Mr. Macron does keep calling for social systems to be harmonized but that could cause even more strife. It was naive to think the euro would bring greater harmony; it’s already causing discord and more social legislation from Brussels could have the same effect.

A monetary union only needs additional aid for emergency cases. And I mean emergency cases. That doesn’t mean France, which is suffering from its own economic policy. In no other industrial nation does the state hand out so much (57 percent of GNP instead of 44 percent as in Germany), no other country in Europe, outside of Luxembourg, pays a higher minimum wage, none caps working hours with such rigor. It is far from certain that most French people would back Mr. Macron if he wanted to make fundamental changes to any of this. And who knows, maybe just a few modifications would actually get the economy humming again.

But the responsibility for all that lies in France. And that’s where it belongs. Europe should allow a variety of models.  That’s a better protection for the EU against division than ever more communitization.

France EU France Far Right
So you don’t want to support Macron on this. Have you really thought it through? Source: AP.

Ja! Germany must financially support Mr. Macron so he can reform France and save the EU.

Are you out of your mind? Emmanuel Macron just fended off possibly the greatest threat to peaceful co-existence of the peoples of Europe since the Fall of the Wall. Some 24 hours later Berlin is all upset because this very same Mr. Macron has a few ideas that might cost German taxpayers money.

Of course we have to pay for the French – because it’s in our own interest. Mr. Macron won the election, but more than ten million French voters cast a ballot for Marine Le Pen. If he cannot deliver success fast, she will be reaching out to grab the presidency again in five years. And when France leaves the EU and the European postwar order is a shambles, who would we be able to turn to? The Turks? The Russians? Donald Trump?

If Mr. Macron fails, that would cost Germany way more than any Eurobond. Even so, the new president hasn’t once called for such a comprehensive sharing of debts in Europe, even if that’s what you’d think if you follow the debate here in Germany.

What he’s actually calling for is neither revolutionary nor particularly original: a shared budget for the euro zone, the zone’s own finance minister, and a shared deposit insurance. These are the consequences of the fact that member states of a monetary union no longer have their own currency. That means, for example, that in a crisis situation – and there will always be crises – money cannot just be printed to buoy up the economy. That’s why it isn’t enough when every euro state simply does its own “homework,” as Finance Minister Wolfgang Schäuble likes to put it. Instead, what’s needed is the financing to be balanced out between weaker and stronger countries.

Mr. Schäuble would probably accept that and would most likely add that he would be willing to pay more money, but only when everybody sticks to the rules. A common budget without sharing control of how that’s spent spells disaster, and the French aren’t models of compliance.

Yet – and here’s the historical significance of this election – that could change with Emmanuel Macron. For Mr. Macron is ready to relinquish monitoring rights to the European level and to restructure his own economy. He might even succeed. Despite its huge problems, France is a country with competitive companies, highly skilled workers, and a functioning administration. And with Mr. Macron, it now has a president leading the republic who has won a mandate for the change.

If this president believes fiscal concessions from Germany would help him sell the necessary reforms to his own voters, then, from a German perspective, it would be politically prudent to go along with that. That’s all the more true because – if we’re honest – it was primarily the other euro countries which paid for the crisis, forced as they were to accept stringent budget cuts and rising unemployment. In Germany, on the other hand, wages and pensions largely went up and the state took in more money than it could spend.

So now it’s our turn – and that will for sure be hard to sell here politically. But we have to try at least.

 

This article originally appeared in Die Zeit. Kolja Rudzio said no, Germany shouldn’t pay more while Mark Schieritz was in favor. To contact the authors: redaktion@zeit.de

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