The victory of Emmanuel Macron who has just become France’s youngest head of state, has demonstrated that populism can be defeated by offering an alternative based on pro-European values and openness instead of trying to appease xenophobic voters. This also holds true for the recent results of Germany’s regional elections, in which Chancellor Merkel is scoring victories.
Reforming the European project will necessitate the revamping of the Eurozone, which Mr. Macron brought up himself. However, this might prove to be more difficult than initially thought due to the disagreements on the approach between France and Germany. Yet, the first moves of Emmanuel Macron in the office suggest that the differences in the economic philosophies might not be insurmountable. Mr. Macron has put together a strong economic team that seems to have accepted the notion that France needs to reform itself in order to start growing again. Moreover, his economic program also calls for bringing public finances under control.
The differences between France and Germany do not end just at the philosophical level, but they are also in the actual performance of their respective economies. However, although much has been said about the weaknesses of the French economy, it is in fact the Eurozone average. It has been about half a percentage point lower than Germany’s over the last few years, which is now, however, changing. France’s future growth rate should be half a percentage point higher than that of Germany, whose population is moreover shrinking.
Another area in which some discrepancies exist between the two major continental economies is the management of refugee flows. While the EU’s 2015 migrant deal with Turkey has managed to significantly decrease the number of refugees reaching the EU from the southeast, thousands continue to arrive via the Mediterranean route. Moreover, as the Libyan conflict intensifies, the odds are that the flows will go up as well. Once these migrants reach the shores of Europe, which most of the times means the shores of Italy, it is Rome that is responsible for them under the Dublin rules.
However, for most of those migrants, Germany is the dream destination, which the German government aware of and it also acknowledges the problem with the Dublin asylum system. Therefore, both Italy and Germany have a strong incentive to pursue a European approach to migration, in which France has not been very active so far. France faces its own problems at home – the integration of the second generation of immigrants and related extremism.
Emmanuel Macron is also interested in developing the EU’s external security and defense, which is one area in which Germany, Italy and France have a common interest. It is also an area in which Germany’s economic advantage is relatively negligible. The new French President will thus have to carefully balance between the most urgent issues and make sure that the priorities of Germany and Italy are also taken care of.
‘Macron’s Victory Brings New Hope Across Europe on Several Fronts’ – Commentary by Daniel Gros – Centre for European Policy Studies (CEPS).
(The Commentary can be downloaded here)