A few hours after taking office on 15th May, the French president François Hollande rushed to Berlin to meet Angela Merkel, the German chancellor. He had not yet appointed a prime minister, but there was no time to waste. For all the parochialism of the French presidential campaign, during which both candidates debated only domestic issues, Europe could not wait.
During his campaign, Hollande promised he would never surrender to Berlin; he would twist Merkel’s arm and renegotiate the fiscal austerity pact to which Sarkozy had agreed. Isn’t France the founding mother of the Union, the homeland of Monnet, Schumann and Delors, and its second largest economy? Nothing is possible in Europe without France, Hollande declared. True. But nothing is possible in France without Europe either—and Europe’s capital today is Berlin.
New to Brussels, with no government experience but a background in party politicking, Hollande claimed victory after his first European summit in June. Supported by Mario Monti, the prime minister of Italy, he ensured that a chapter about economic growth was added to the fiscal compact imposed by Merkel. Lionel Jospin, France’s last socialist prime minister, had similarly been granted an addendum to the Lisbon treaty, without any concrete results. Such is the French obsession with semantics that they tend to think the problem is somehow solved once the proper wording is forged.
Five months later, an appraisal of Hollande’s performance came from a fellow socialist in Berlin. Basking in the success of his “Agenda 2010”—reforms that cost him his job but which account for the current strength of the German economy—Gerhard Schröder, the former chancellor, did not mince his words. The French must come to terms with reality, he told me recently at the Berggruen conference on governance. So far, the wrong signals have been sent and soon the financial markets will pass judgment.
The French economy is in trouble. Unemployment is growing, as is the trade deficit; the car industry is on the verge of collapse; and confidence is low. But the government’s policies correspond to a pre-crisis ideological package rather than a realistic assessment of the situation: retirement at 60; no change to the 35-hour working week; no reduction to business rates or improvement of labour flexibility; massive fiscal reform hitting the rich and middle class without any incentives to stimulate consumption. As a Brussels expert told me, these reforms amount to “too many small steps…