Crises part of the tradition of Franco-German alliance

The French use metaphors of marriage and the internal combustion engine to describe their relationship with Germany

The French use metaphors of marriage and the internal combustion engine to describe their relationship with Germany. In French parlance, the "Franco-German couple" is the heart of Europe, the "engine" that drives integration.

Their alliance has deep symbolic value; they fought three wars in 70 years, yet shortly after the second World War freed themselves from their past to begin building Europe.

"Fifty years later it still seems extraordinary," a French diplomat says. "The Franco-German experience is exemplary and it has universal value - every time I hear the Greeks and Turks saying they can't overcome their history, I say `Look at us'."

Because it is the core of Europe, every disturbance in Franco-German relations sends ripples across the Union. The latest crisis began with the French left's June 1st election victory and briefly appeared to threaten the foundations of Economic and Monetary Union.

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The engine sputtered and the marriage grew rocky, so much so that a semi-official Franco-German colloquium held in Paris at the beginning of July was entitled "Franco-German Relations: A Marital Spat or Divorce?"

In late spring and early summer, Franco-German relations had become hostage to domestic politics in both countries. During his election campaign, the French Prime Minister, Mr Lionel Jospin, criticised President Chirac for bowing to German demands for stringent finances on the road to EMU.

He would abide by the Maastricht criteria because France had given its word, Mr Jospin said, but he did not feel bound by the December 1996 Dublin summit stability pact which, at German insistence, set down penalties for excessive budgetary deficits after EMU.

Meanwhile, the German Chancellor, Dr Helmut Kohl, was under fire from German politicians, among them the Bavarian leader Mr Edmund Stoiber, who accused him of wanting to abandon the strong deutschmark for a weak euro. To fend off internal criticism, Dr Kohl's government hardened its line towards France, insisting on the necessity of observing the Maastricht criteria to the letter. In French newspapers, the German word for the 3.0 per cent budget deficit ceiling - Dreikommanull - became a byword for Bonn's intransigence.

Mr Dominique Strauss-Kahn, the French finance minister, waved a red flag when he announced in Luxemburg on June 9th that France wanted to postpone its signing of the stability pact. Four days later, this cast a shadow over the Poitiers summit, where Dr Kohl, Mr Chirac and Mr Jospin met for the first time.

After some cliff-hanging moments, a compromise was reached the following week in Amsterdam. France endorsed the Germans' beloved stability pact once a clause on the need to promote economic growth and fight unemployment was added. At Mr Jospin's request, an EU "social summit" was scheduled for the autumn.

The Germans agreed to humour the French, on condition that Bonn - still struggling to pay the costs of unification - should not be asked to pay for job-creation programmes.

Different economic philosophies were at the root of this Franco-German tug-of-war. Even right-wing French leaders are Keynesians who believe in the necessity of state intervention, while the Germans now share the British and US faith in liberalism and free markets.

These different philosophies are also reflected in their attitude to wards privatisation. In recent weeks, Bonn was relieved to see the Jospin government proceed with the privatisation of several state-owned companies, including the defence electronics giant Thomson-CSF. "We want Franco-German mergers in defence industries," a German official in Paris explained. "This becomes even more important with the Boeing-McDonnell Douglas merger - you have to have a counterweight."

Bonn does not want to merge private German companies with state-owned French companies. One dream would be to combine the French companies Aerospatiale and Dassault with the German DaimlerBenz Aerospace (Dasa).

After the tension and uncertainties of June, the Jospin government seemed to realise how high the stakes were and adopted more conciliatory language. "The Franco-German relationship is and will remain the cornerstone of France's European policy," Mr Pierre Moscovici, the French minister delegate for European affairs announced. "It is upon this relationship . . . that we intend to found . . . our action in favour of European integration."

As the summer wore on, the Germans' tone also softened. Before leaving for his holiday, Dr Kohl denied reports that he disliked Mr Jospin, saying he had a "positive" opinion of the French prime minister and calling him "a socialist filled with idealism".

When on July 21st the French government announced cuts in government spending and a "euro-tax" on big companies to bring its 1997 deficit close to the 3.0 per cent deficit target, the relief in Bonn was palpable. The Finance Minister, Mr Theo Waigel, expressed "respect" for the French measures. The Jospin government had proved it too wanted the euro; the crisis had subsided. For the time being. "Crises are part of the tradition of Franco-German relations," Ms Renata FritschBournazel, director of research at Sciences Politiques' studies centre in Paris says. "That is how they move forward. A few months later, everyone has forgotten."

DR KOHL and Mr Jospin will hold their first bilateral summit in Bonn on August 28th. The Maastricht criteria and the euro will be high on the agenda. Paris and Bonn have yet to reach agreement on the "economic government" which Paris wants as a counterpart to the European Central Bank. Bonn insists the bank must be independent. A compromise now seems likely.

"When you look closely, you realise that we're not talking about contradictory things," the French foreign minister, Mr Hubert Vedrine, told the Nouvel Observateur. "The proof is that when - instead of saying `economic government' - we refer to `co-ordination of economic policies within the framework of article 103 of the [Maastricht] treaty', nobody gets upset."

Mr Vedrine has a reputation for being pro-German; unlike his Gaullist predecessor, Mr Herve de Charette, he gets along well with the German Foreign Minister, Mr Klaus Kinkel.

However, a German official says, "there is a deep foreign policy rift between us, stemming from the irrational anti-Americanism in France. We too want the Europeans to take their fate into their own hands, to develop a European pillar of NATO. But France's strongest motive in co-operating with other countries seems to be the defi Americain, the American challenge. Germans look back on the Marshall Plan with gratitude."

The run-up to EMU selection and the German parliamentary campaign will further test the "Franco-German couple". For now, French and German officials are again unanimous in saying EMU will happen. On Friday Mr Jospin promised his government would make cutbacks to ensure its 1998 budget did not surpass 3 per cent in deficit spending. It was music to Dr Kohl's ears.