On Saturday, President Nicolas Sarkozy, who officially announced late last week that he was running for reelection, gave a press conference at his newly-opened campaign headquarters in Paris’ fifteenth arrondissement, during which he was asked a peculiar question. “It was announced that Angela Merkel would be here,” a reporter asked, a hint of deception in his voice. The president gamely replied: “Yes, but she doesn’t have an office here…” The audience burst into laughter.
One of the more unusual twists in France’s upcoming presidential election, where the first round of voting will occur on April 22, is Nicolas Sarkozy’s sudden infatuation with all things German. His family origins lie in Greece and Hungary; he was, in 2007, known as “Sarko the American.” When pressed, he can even muster up some heavily accented English. But in 2012, the French president has gambled his reelection on his German connections.
A tight bond between France and Germany may still surprise those Americans whose knowledge of European history is limited to World War II movies and aging TV shows. But to everyone else, it’s old news. The driving force behind the development of the European Union since its inception in 1957 has been the Franco-German partnership. It has gone through several incarnations, each with its own distinctive personal dynamics: de Gaulle-Adenauer, Giscard-Schmidt, Mitterrand-Kohl, Chirac-Schröder. Yet individual idiosyncrasies aside, the Franco-German bond has long been the backbone of European politics (not to mention a formidable commercial relationship). It has propelled the EU forward at each step of the integration process.
Yet the partnership’s latest avatar has evolved into something noticeably different from its predecessors. Part of the reason is the debt crisis triggered by Greece (and to a lesser extent by Italy, Spain, Portugal, and Ireland), as well as the global economic meltdown since 2008, which have provoked perhaps the Union’s greatest crisis in its nearly fifty-five years of existence, making the Franco-German axis more essential than ever (particularly since both also belong to the Euro zone). After the last December’s Brussels summit, when both countries committed to resolve the crisis by negotiating a new “fiscal pact,” the press, deeming the two leaders’ positions’ indistinguishable, dubbed the Franco-German duo “Merkozy.”
Yet the axis itself is no longer a partnership of equals. Not only is Germany considerably more powerful economically than France, with all that this implies in terms of dictating the fate of countries like Greece. It has also become a state-of-the-art economic model. And this, interestingly, is the reason why Sarkozy is prone to evoke Germany in such glowing terms.
In many ways, however, Sarkozy’s model is not Angela Merkel, but the man she beat for the chancellorship back in 2005: Gerhard Schröder. This is surprising: Schröder, after all, was a man of the left, a social democrat—whereas Sarkozy is arguably the most right-wing president of the Fifth Republic. But like Tony Blair and Bill Clinton, Schröder belonged to the nineties’ wave of “Third Way” leftist-liberals, who maintained that the left’s ideal of social progress had to be rendered compatible with the post-Reagan/post-Thatcher conviction that there was “no other way” than free-market capitalism.
After his reelection in 2002, Schröder undertook a series of reforms that permanently altered the German social welfare state, which as chancellor he believed were required to survive the challenges of competition on an increasingly globalized market. He launched his so-called “Agenda 2010,” which resulted in a series of path-breaking reforms that were negotiated by Peter Hartz, Volkswagen’s personnel director. The Hartz reforms notably reduced the amount of time that Germans were eligible for unemployment benefits (at a rate commensurable with their previous salaries) to twelve months. They also created strong pressures, once the twelve month period had expired, for the unemployed to take almost any job available, however little it paid (and regardless of whether the work related to one’s previous employment). In practice, it meant that much of the population was redirected towards low-paying service sector work—a criticism that economists and leftists have leveled in Germany and elsewhere. Meanwhile, labor-market legislation was made more “flexible,” increasing the ease with which employers could lay off workers.
While Sarkozy has not (to my knowledge) mentioned the Hartz reforms by name, this is clearly what he means when he waxes poetic about Schröder—the idea that you must, in a sense, dismantle a welfare system (“end welfare as we know it”) to save it. During a major television interview on January 29, Sarkozy proposed, for instance, cutting employers’ contributions to various welfare provisions as a way of stimulating business, and making up the resulting losses by increasing the value-added or “TVA” tax (in practice, a sales tax) Because this value-added tax would be subsidizing welfare provisions, the French dub the measure the “social TVA.” Defending the idea, Sarkozy remarked that “in Germany, it was implemented in 2004 by a socialist”—Schröder—whom he flatteringly described as “a man of quality.”
The only problem was that, as it turns out, Sarkozy had it wrong: the “social TVA” was adopted in Germany not under Schröder, but Merkel, shortly after her election in 2005. So the president’s effort to outmaneuver his socialist rival François Hollande on the left embarrassingly misfired. Still, Schröder remains an interesting model for Sarkozy, not least because, in 2002, he managed to be reelected despite a dodgy economic record, including a much higher unemployment rate than was generally considered winnable.
In any case, Sarkozy may have named the wrong chancellor, but he has made his broader point before, including just a week earlier in Berlin. Speaking of the social TVA, he touted the idea, saying: “Our German friends used this weapon several years ago to reduce the labors costs and deficits.”
It is interesting what Germany has come to represent in France. Once upon a time, Germany meant militarism and ethnic nationalism. During the postwar years, the German Federal Republic was admired for its social model—the so-called “social market economy,” in which capitalist principles were anchored in a robust system of social welfare, designed to ensure that people had the resources to compete in the free market. Its system of employee participation in corporate decision-making also seemed to be embody a less hard-edged, a more inclusive form of capitalism.
But thanks to the Schröder and the Hartz reforms, Germany has come, for many in France (especially on the left), to embody the “race to the bottom” policies once associated with the US and the UK, and perhaps now China. Jean-Luc Mélenchon, the dissident socialist and far-left presidential candidate in this election, sneered after Sarkozy’s late January speech: “One had the feeling after a point that Nicolas Sarkozy was a candidate to be socialist chancellor of the Federal Republic of Germany.” And here’s the really remarkable thing: he meant it as an insult.