If Hollande wins French election, Europe won't collapse – just shift a bit
Socialist François Hollande may well win the French presidential election. But don't expect a big brawl or gridlock with German Chancellor Angela Merkel over austerity and debt. Markets will keep Hollande in check. And then there's the tradition of German-French cooperation.
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Something will have to give. And somebody will need to tell Hollande. But it does not need to be Chancellor Angela, the disciplinarian from Berlin. She can sit back and let Germany’s best ally do its job: the markets.Skip to next paragraph
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Hollande might well find the experience of one of his predecessors valuable. When François Mitterrand came into office in 1981, he borrowed to stimulate the economy. That effort failed quickly, and François the Socialist became François the pragmatist for the rest of his presidency.
That Hollande has limited room to maneuver does not mean he would not get some of what he wants, at least initially. In fact, he has already gained quite a bit of leverage, especially in Berlin.
During his campaign, the opposition German Social Democrats rediscovered the merits of transnational politics. They conditioned their parliamentary support for Merkel’s eurozone bailout proposals on the inclusion of language that Hollande used in France. Now, they hope to postpone the German parliament’s vote on a new European fiscal pact until Hollande makes his position clear. If German Social Democrats and French Socialists play their cards right, Hollande would practically have a seat at the table of power in Berlin.
Angela Merkel knows this. She is a master tactician, and she understands the value of the euro to her country and to her own legacy. She will be ready to compromise. Last week she preemptively engaged in a rhetorical growth blitz to accommodate a possible Hollande victory.
At the European Council meeting in June, she announced, a growth initiative shall be introduced. Rumors price it at 200 billion euros. However, it will not be the type of package that the neo-Keynsian prompters suggest: no stimulative bonfire that increases debt and increases the need for structural reform. Rather, the plan calls for mobilizing unused EU funds, an expanded capital base for the European Investment Bank, and some new infrastructure projects.
The French-German engine has traditionally powered the European Union because it was able to engineer compromise across national borders and across ideological barriers.
In fact, the French and the Germans collaborated best when their leaders hailed from different political camps: take Helmut Schmidt and Valéry Giscard d’Estaing, or Helmut Kohl and Mitterrand, or Gerhard Schröder and Jacques Chirac.
They forged alliances on war and peace, on the single market, on German unification, and the common currency. It is this tradition that Chancellor Merkel and a possible President Hollande will seek to be part of.