A Europe of Merkel and Fillon

Next year, French and German voters will go to the polls to select their parliaments and leaders. The current frontrunners are François Fillon, the former French prime minister, who emerged from primaries over the weekend with a strong mandate to be the candidate for the center-right, and long-serving German Chancellor Angela Merkel, who recently announced that she will seek a fourth term.

Both would face daunting tasks. They would be in charge of steering the European Union through Brexit while continuing to face down Russian assertiveness. Absent the United Kingdom and with an unpredictable new administration in the United States, they will also be in charge of managing the EU-U.S. relationship and of trying to save the Transatlantic Trade and Investment Partnership and the Paris Agreement on climate change. Other items on their agendas include Turkey’s authoritarian drift and the possible reunification of Cyprus.

However important the foreign policy challenges, though, it is on domestic issues that voters will select their leader. France suffers from a structurally sluggish economy and high unemployment, and each election hinges on never-fulfilled promises to fix these problems. Dramatic terrorist attacks have also sensitized voters to security issues and to the imperfect assimilation of a large community of Muslim immigrants. By contrast, Germany is victim of its own economic success, which has made it the destination of choice for hundreds of thousands of asylum-seekers and left a major segment of the German electorate angry and alienated. Those trends have propelled xenophobic parties such as France’s National Front and the National Democratic Party of Germany forward in the political debate, both of which are likely to play a role in next year’s elections.

Against those extremes, Fillon and Merkel embody the values of a moderate center-right. Their core constituencies are socially conservative and European, to the extent that Europe is a space for Christian values. Economically liberal, they embrace trade and free markets without turning their back on the safety nets that assure social justice. In Germany, the groundwork for this model was laid down by Merkel’s predecessor, Gerhard Schröder, who was the country’s chancellor until 2005 and was an architect of pro-growth reform. The combination of industrial specialization and global competitiveness worked well for Germany. Unemployment has been on a long-term downward trend, and the country weathered the 2008 economic crisis well, which allowed Merkel to capitalize on economic success throughout her tenure.

France is far behind Germany in the reform cycle. Policies to free labor markets and to improve competitiveness were only pushed through after 2014, when Socialist Manuel Valls was appointed prime minister and the iconoclastic Emmanuel Macron became minister of economy, industry, and digital affairs. Both men are now likely contenders in next year’s presidential election, but the Valls-Macron reforms have been too modest to significantly boost growth, and the paradox of Socialist economic liberalism has brought ideological disarray to the left. With the Socialist Party likely to lose power, Fillon has stepped in on the right, advocating for Christian values and taking staunch positions on security that will allow him to reclaim traditionally conservative electorate from Marine Le Pen's National Front. Unlike Le Pen, he embraces Europe and globalization, and his radical proposals to make France more competitive in the global economy will also attract the liberal vote. Together, these constituencies should get Fillon elected, but winning at the ballots may not earn him a mandate for radical change. His Socialist, reformist predecessors were reluctantly granted social peace in a country where reforms often drive millions to the streets, paralyzing the economy for weeks. To push through his ambitious economic program, Fillon would need exceptional political capital, which he does not yet have.

Merkel’s task is different, but she shares the need for political capital. Germany’s generous social safety net is struggling under the weight of so many refugees, whom Merkel has welcomed on moral grounds. In theory, the influx of new labor could compensate for Germany’s demographic decline, as long as refugees can adjust their skills to fit in with the German economy. Concurrently, Germany is poised to inherit businesses leaving the United Kingdom post-Brexit—a preference indicated by firms in several surveys. If all goes well, a new Merkel mandate could see Germany’s stature as an economic powerhouse grow further. But the country would also become more diverse and cosmopolitan, against the desires of a native population potentially hostile to change.

On the foreign policy front, Germany’s economic clout benefits Merkel, but France has military and diplomatic heft thanks to its nuclear weapons, its permanent seat in the UN Security Council, and an army that is small but routinely deployed around the world. The main test for the Franco-German alliance will be the relationships with the United States and with Russia. Both Fillon and Merkel have been as chilly toward the United States’ president-elect as diplomacy allows, and their attitude toward the new administration could evolve in unison. But Russia could divide the two. Germany has become the de facto protector of eastern EU members against the threat of Russian aggression. A self-proclaimed Gaullist, Fillon believes that France should own its foreign policy—that Europe is an instrument of French power, not the power France should answer to. Unimpressed by calls for firmness from European neighbors of Russia, Fillon argues that appeasement will best restrain Moscow’s behavior.

Merkel and Fillon know each other well. For five tumultuous years, he was prime minister when she was chancellor. Together, they endured the Russian invasion of Georgia and the euro crisis. At the time, Fillon played second fiddle to French President Nicolas Sarkozy, who besides trying—unsuccessfully—to coax Merkel into backing France’s global ambitions, courted and accommodated Russian President Vladimir Putin. It was Socialist President François Hollande who, reacting to the conflicts in Ukraine and Syria, came together with Merkel to concoct a policy of carrots and sticks toward Moscow. Although Merkel has been accused of accommodating Putin, she has stood up to him comparatively more than her French counterparts. She has balanced the pro-Russian stance of her government’s coalition partner, the Social Democratic Party, with the security needs of eastern European nations that have looked to Germany for help.

The French-German dynamic has been so central to the construction of Europe since the 1950s that each election brings up concerns of a rupture. Temperamentally and ideologically, Merkel and Fillon look like a solid match. His liberal economic program responds to long-standing German demands for greater competitiveness on the left bank of the Rhine. But if France shifts back toward Moscow in 2017, especially if the United States tilts in the same direction, it would put the final seal of approval on Russia’s annexation of Crimea and entrench the regime of Bashar al-Assad in Syria. The EU today stretches from Ireland to Latvia, but were the situation in the east to deteriorate further, without French support, Germany may be forced to choose between eastern and western Europe. The next French president and the next German chancellor would be well advised to work in concert. The region and the world will be better for it.

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