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France and Germany rebuild ties but EU waits for old axis

31st January 2014, Comments 0 comments

With France and Germany apparently patching up their economic differences, their decades-old axis could retake its place at the heart of Europe, but analysts are waiting for actions to back up the rhetoric.

French President Francois Hollande's recent promises of economic reform have been welcomed by Chancellor Angela Merkel's coalition as a step away from socialist policies towards Berlin's austerity-minded approach.

The eurozone's two biggest economies have meanwhile launched a series of measures to jumpstart stalled ties after the financial crisis exposed major differences in approach to budgetary discipline and growth.

Analysts said a thaw in the relationship that has dominated the continent since World War II would benefit Europe as a whole, but that there were still a host of differences on key issues such as changing EU treaties.

"There is a chance this is a real one (rapprochement)," Janis Emmanouilidis of the Brussels-based European Policy Centre think tank told AFP.

"Each side knows that they have to interact with each other for many years to come."

Paris and Berlin have struggled to reconcile their policies on recovering from the eurozone debt crisis ever since Hollande took office in 2012 promising to spend France's way out of trouble.

The previously strong bond between Merkel and Hollande's centre-right predecessor Nicolas Sarkozy -- dubbed "Merkozy" -- has been replaced by a lack of communication, exacerbated in 2013 by Merkel spending months building a new left-right coalition after elections.

But earlier this month Berlin warmly welcomed what Hollande called "social democratic" reforms to spur the beleaguered French economy. They incldued 50 billion euros ($68 billion) in public spending cuts and a 30-billion-euro reduction in corporate payroll charges.

Since then it has been a veritable love-in between the former foes.

Germany offered logistical support to the French operation in the Central African Republic, while their foreign ministers are considering joint trips to some of Europe's troubled neighbours.

'Franco-German phoenix'

Analysts said the emergence of "Merkhollande" was "no surprise" given their underlying political sympathies.

"It's a social-democratic convergence which reconciles supply-side reforms with a reduction in social inequality," said Claire Demesmay, of the German Council on International Relations.

Emmanouilidis said there was time for Germany and France to find common ground on changing the EU's treaties to strengthen joint economic governance in the 28-nation bloc.

But the negotiations would be "complex" and there were also a host of differences on technical issues such as banking union, the financial transactions tax and others.

The two leaders also face different situations at home.

The main problems in France are youth unemployment, competitiveness and the bloated state, whereas Germany faces issues with internal consumer demand.

Others were more sceptical that the relationship between France and Germany could return to the heady days when they effectively built the European Union together.

"I'm not sure how much rapprochement there actually is between France and Gemany," Mats Persson, director of Open Europe, a eurosceptic think-tank based in London, told AFP.

"One senior German told me recently that they are far more worried about France than about Italy."

One EU official was cautious.

"The rebirth of the Franco-German phoenix is a recurrent phenomenon," the source added on condition of anonymity. "For citizens, words have to be translated into lasting actions."

But Persson said the relationship was still "relevant and important for Europe."

"In the grand scheme of things it is good that France and Germany get on," he said.

Britain and other northern European countries could in particular benefit from the alliance, despite appearances to the contrary.

Prime Minister David Cameron has been wooing Germany in a bid to win support for his quest to renegotiate Britain's relationship with the EU before putting the new terms to a national referendum in 2017.

But close ties between Merkel and Hollande would not necessarily scupper this, particularly as there is appetite for treaty change from Berlin.

"A Franco-German axis on the whole is more open to reform than the sum of its parts," Persson said.

"It could therefore be more sympathetic to the UK's reform agenda."

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© 2014 AFP

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