EU View: March 2012
French elections offer glimpse of cross-border politics; German Finance Minister tipped for Eurogroup job; EU sends tax collectors to Athens.
Pan-European politics?
As French voters prepare to go to the polls for the first round of their presidential election, the contest has sparked optimistic talk among European federalists of closer ties between national political parties.
A less inward-looking approach to policymaking might breed greater appreciation for the imbalances that have exacerbated the financial crisis, as well as a deeper understanding of the domestic political challenges faced by national governments. Or so goes the logic of optimists.
The prospect of Angela Merkel helping Nicolas Sarkozy to fight for re-election – against French Socialist Party candidate Francois Hollande, who has been publicly backed by the German Social Democrats – is a significant development.
However, it would be premature to speak of common electoral platforms for a number of reasons: the public is not ready; major policy differences exist within Europe’s political ‘families’; and this conversation is entirely about Franco-German integration rather than pan-European politics.
That in itself may irk the other 25 EU member states for whom the ‘Merkozy’ alliance was an affront to the ‘community method’.
With the French election still to close to call, despite the two-point lead Sarkozy enjoyed in the immediate aftermath of the Toulouse murders, Sarkozy’s handlers have discouraged Merkel from stumping for her side-kick at rallies. She has dialled down her public support accordingly for fear of spooking nationalistic voters with long memories.
The situation might look more encouraging on the centre-left where recently-installed European Parliament President – and German Social Democrat – Martin Schulz attended a rally in Paris for his “friend” Mr Hollande.
Both sides have signed a common declaration in support of a financial transaction tax and began stepping up coordination on matters European last year. But the differences between parties of Hollande’s and Schulz are stark.
As if hell-bent on confirming national stereotypes, German social democrats are a pragmatic bunch. The economic progress made in post-unification Germany required considerable cross-party consensus and commendable restraint by unions who bought into the national project to rebuild competitiveness in the interest of longer-term prosperity.
Of course, it is these hard-won gains that have made Germans of all political stripes so reluctant to hand over billions of euro to fiscally-challenged southern neighbours.
The French Socialists, on the other hand, are a more traditional left-of-centre party. It was they who created the 35-hour working week and it is they who are promising to undo Sarkozy’s modest pension reforms.
Hollande has also made noises about unpicking the fiscal compact, although he has since rowed back on the more extreme comments about tearing it up and starting again. He is still promising to block ratification of the current draft unless major changes are granted.
By contrast, German Social Democrats may have expressed some reservations about the deal but are effectively ready to approve Merkel’s treaty. Indeed they voted with Merkel in 2009 to enshrine the ‘Golden Rule’ on balanced budgets in Germany which Berlin now wants all EU members to adopt.
Equally emotive is the French effort to change the statutes of the ECB while Germans are keen on preserving its independence.
For now at least, it seems French Socialists are more French than socialist, just as Germany’s SPD is German first and socialist second.
Germany eyes Eurogroup gig
German Finance Minister Wolfgang Schäuble (pictured) has emerged as the favourite to succeed Jean-Claude Juncker as President of the Eurogroup. The plan has been met with scepticism from smaller countries but also from Sarkozy who worries about the perceptions – and reality – of German dominance.
Juncker, who is prime minister of Luxembourg, was seen as a relatively neutral force by Berlin and Paris, and had been encouraged to stay in the post so as to avoid having to bicker over finding a replacement. But, after several demanding years, Juncker is said to be seeking to scale down his workload.
Olli Rehn’s promotion to the status of European Commission vice-president led some in Brussels to suggest he should be given the job but others see a conflict between the commission’s supposed role as an ‘honest broker’ and the highly political job of running the currency.
In the absence of an obvious candidate, officials have even suggested finding an external chair with suitable clout and experience. An ex-finance minister would be required, say diplomats.
It has been clear that whoever replaces Juncker will need the blessing of Berlin – which brings us back to Schäuble. The German finance minister himself has said little on the subject other than a mischievous comment suggesting Juncker’s replacement should be drawn from the finance ministers of a AAA-rated euro zone country. Not exactly a broad pool.
Tax taskforce
The European Commission has sent an army of 100 tax officials to help Greece to tackle its chronic tax evasion problem. A report by the EU task force in Athens suggests up to €60bn worth of taxes has gone unpaid, prompting officials to plan a total overhaul of the revenue collection system.
Twelve EU member states have sent tax experts to Greece, including some German civil servants who have come out of retirement to offer advice. Danish and French experts will also assist with debt collection from wealthy individuals while Spanish officials are advising on how to deal with corporate tax evaders.
All European governments had been asked to put forward a roster of experts for various projects within the task force. Ireland had offered to share its expertise in tapping EU structural funds but this has yet to be taken up.
