François Hollande knows that the widening Franco-German divide lies at the heart of the euro zone crisis. In a press conference on Thursday, the French president showed that he wants to find a way to work with German Chancellor Angela Merkel to take Europe forward. He suggested the creation of an “economic government” of the monetary union, while addressing a key German concern: Paris seems ready to accept sovereignty transfers of a sort that would make such a centralised body effective.
Hollande suggested a two-year timetable to get it up and running. That looks optimistic. And as with any plan from Paris, this one will be greeted with caution by other euro zone members, wary that it might be just a way to promote France’s own interests. Yet it does not conform to the traditional French view that European integration simply means national governments working better together. It is closer to the type of federalism long advocated by Germany.
Whatever its merits, there is a risk that it will open a discussion that lays bare the different interests and agendas of the 17 euro zone members. Hollande’s priorities may not be shared by others: he mentioned tax harmonisation – always a controversial topic in Europe – and the fight against tax evasion.
It could be easier to find agreement on the other ideas. A joint programme to fight youth unemployment has already been suggested by German Finance Minister Wolfgang Schaeuble. And the suggestion that member countries join forces on the energy transition to renewables should be welcome.
Hollande can only convince his euro partners if he shows that he is also doing his part to boost the French economy’s growth prospects. To that end, most of his press conference was devoted to laying out reforms he wants to pursue – notably of the pension system, unemployment benefits, and the bloated state machine. His emphasis on the economy’s supply side was encouraging after a year spent obsessing over fiscal targets.
Hollande is the most unpopular French president on record. But no one will remember that if, in a few years time, he can show he reformed France and strengthened Europe.