Macron Meets Merkel, German Elections and European Reaction

Emmanuel Macron was inaugurated as the new President of France on Sunday, as Europe prepares for a new Franco-German partnership to strengthen the Union. With Berlin as the new President’s first destination as head of state, Macron’s intentions are clear: get support from Europe’s most powerful leader for Union-wide reforms on areas such as labour reforms, unemployment insurance and bond issuance. Not to mention, rekindling the core relationship that has been at the centre of the European Union since its founding in 1957. Macron’s predecessor, Francois Hollande, was as deeply unpopular in Europe as he was in France and Macron will be seen as a breath of fresh air. He is the fourth French president the German leader will have worked with and, in the German view, the most promising.

What exactly was discussed at the Macron-Merkel summit and what can we expect to come from it? For starters, the President and the Chancellor each embraced each other as voices for the Union. Macron then told Merkel that his first task is to fix France by implementing economic reform, particularly labour laws that Hollande failed to pass and a lessening of regulation of some industries. Only an economically stronger France, in the German view, can be a close to equal partner for Berlin.

“The French agenda will be a reform agenda,” Macron said at a joint press conference, on his first visit abroad that came barely 24 hours after his inauguration and immediatley after his victory parade on the Champs-Élysées. Ms Merkel said they would move swiftly, with a joint Franco-German government meeting to be held in July. Macron said France was “the only country that has been unable to tackle mass unemployment in the last 20 years,” and promised to fix it. He talked about fiscal and economic cooperation, defence, joint asylum proposals and foreign policy as possible areas of cooperation between France and Germany.

However, Macron avoided what he knows is a sensitive topic — any talk of eurozone reform that sounded to the Germans like fiscal transfers to less economically strong EU countries (i.e. France) to be funded by their taxpayers, who have endured bailouts for the likes of Greece, Spain, Portugal and the Republic of Ireland.

The most important area of cooperation, however, will be on strengthening Europe. Today, other European leaders such as Mariano Rajoy Brey of Spain and Enda Kenny of Ireland, as well as Commission President Jean-Claude Juncker, acknowledged that a strong Franco-German partnership is good for the EU and the eurozone economies. All parties realise that EU-wide reform is necessary, but everyone, especially Mr Macron, understands that this is not possible until after the German federal elections in September.

The polls show that he will likely continue working with Mrs Merkel on the broad range of issues discussed in Berlin today. Her mood was surely made better after her CDU party performed very strongly in North-Rhine Westphalia’s state elections on Sunday, surpassing expectations and beating Martin Schulz’s SPD by four points to take over in Germany’s most populous state. The NRW election victory was the CDU’s third-straight state election victory in 2017, following wins in the Saarland and Schleswig-Holstein regions so far this year. These victories will give Merkel the momentum she needs going into the September elections.

Martin Schulz, the former President of the European Parliament, was chosen as the Social Democrats’ candidate for Chancellor on 24 January and, though his candidacy initially gave the SPD a boost in the polls, he has overseen three consecutive election defeats and Merkel’s CDU has taken a 10-point lead in the polls. Germans have responded well to the CDU’s message of security and stability, and it appears that Merkel is on course for a fourth term as Chancellor, though it is still early.

Reform of the EU will have to wait until after the German elections, as Europe’s deal-maker cannot change the Union and run a national campaign all at once. With Macron in the Élysée and Mark Rutte back in power in the Netherlands, Europe has leaders who are committed to deepening the Union. The Commission is happy. The European Council is engaged. With 2017 elections having gone well in the EU, a Brexit battle looming, and a refugee crisis ebbing, the EU is in a position of relative strength, in no small part a result of Mr Macron’s win in France. There is a buzzing about the Commission and Council buildings about what the future holds. So far, it’s looking pretty good for Europe.

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