Are France and Germany the Last Hope for the EU?

With Britain leaving the European Union, a surge in support for populist and anti-EU parties across the continent, and an uncertain United States that seems to be pulling away from Europe, France and Germany – under centrist French President Emmanuel Macron and German Chancellor Angela Merkel – look increasingly like the glue that is holding the union together. Their ability to work with each other in coming months and years could mean the success or failure of the European project.

The idea of a Franco-German engine steering Europe forward is nothing new; France has long been viewed as Europe’s military might, and Germany the continent’s economic powerhouse. Together, the idea goes, they can mold and maintain a strong EU.

“This Franco-German engine has always been said to be important, but it’s also overstated,” Thomas Wright, director of the Center on the United States and Europe at the Brookings Institution, told The Cipher Brief. “It has never functioned as it’s intended, not for some time,” he said.

France and Germany have fundamentally different views on important areas of cooperation, such as the economy and defense. France has a short workweek and labor code that makes it difficult to fire workers, which has caused youth unemployment to soar in recent years. Germany believes France needs a serious labor law overhaul – and that other countries in the EU should integrate on fiscal and financial policy, but on German terms of extreme austerity.

Steven Kramer, a former policy advisor to the U.S. State Department from 1996 to 2002, called the row over France’s labor code a “symbolic” issue, saying, “The Germans are willing and anxious to work with France more as an equal, but the French have to prove that they’re serious about economic reform.”

For a Franco-German partnership to lead a fractured Europe to a position of strength, the two must first resolve this economic difference, Kramer said.

On the other hand, Wright said he’s not so sure the Germans will budge. “The idea that Macron and Merkel can sort this out is premised on the Germans folding – that they will give up their strong beliefs on what the future of European integration will look like in exchange for domestic reform in France. My view is that they will not do that.” However, said Wright, there is the possibility the French will compromise and work with the Germans to implement their view of what a future integrated, and fiscally responsible, Europe should look like.

Then, of course, there’s always the chance that neither side compromises – Macron fails at making domestic reforms and Germany only supports its vision of an austere Europe. In this case, the two could, for some time, concentrate on shaping EU defense and security policy, something that Wright called “not low-hanging fruit, but … easier” than economic policy. 

“After Brexit, Germany and France, in particular, will need to play a central role in a European defense system that is able to make decisions and act potentially without the United States,” German Council on Foreign Relations fellow Josef Braml told The Cipher Brief.

The two are already stepping up to the plate. After U.S. President Donald Trump’s visit to Europe last month, Merkel announced that Europe must “take our fate into our own hands.” Germany – whose WWI and WWII history has made it resistant to domestic military buildup – published its white paper on defense last year, calling for stronger armed forces. Defense Minister Ursula von der Leyen has called for higher defense spending to meet NATO’s 2 percent of GDP on defense spending goal. Germany increased defense spending by around 3.16 percent from 2015 to 2016.

France, the only nuclear power in Europe besides Britain, also increased defense spending from 2015 to 2016, by about 0.95 percent, bringing it closer than Germany to the NATO 2 percent spending goal. Macron has made clear his intentions to build France’s security – in coordination with Europe. “Beyond solidarity, it’s obviously European cooperation that we need to reinforce, in the field of intelligence, information sharing, the protection of our common borders,” he said after the deadly Manchester, England, terrorist attack in May.

The European Commission, with French and German support, is creating a European defense fund of at least €1.5 billion per year to enable European governments to work jointly on development and procurement.

“Germany and France want to become the motor of a European defense union and implement the defense fund in a smart way,” von der Leyen told the Funke Mediengruppe newspaper chain.

She said the new plan could fund projects like drones, military transports, and combined efforts to stabilize the Sahel region.

EU governments and the European Parliament must still approve the plan.

As deeper security cooperation moves forward, spearheaded by Germany and France, Wright noted that the Europeans “could definitely have a multitiered union on security and defense … where some countries would opt out,” but he said that’s harder to do with economic policy.

“The problem on the economic side is that monetary union without fiscal and financial union creates systemic risk and divergence within the eurozone. … I don’t know how you would change that in a multispeed way,” said Wright.

At the end of the day, “the whole thing is tied together,” commented Kramer, adding, “Macron’s domestic policy restores France’s ability to be more or less an equal partner with Germany, that makes it possible to reform the EU, maybe improve the economic situation. It also makes it possible to think seriously about greater European security and defense.”

“Hope is [in] the Franco-German engine,” said Brookings fellow Robert Kagan at a recent Brookings event on the future of the liberal international world order. With Britain “behaving weirdly” and Italy “at risk of becoming a different kind of state,” noted Kagan, the only option left is a strong French-German partnership that leads the EU forward. 

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View our expert commentary on this topic:

France Must Reform Before Building a Franco-German Engine, by Steven Kramer, a professor at National Defense University

The Germans Won’t Budge on their Vision of Europe, by Thomas Wright, Director of the Center on the United States and Europe at the Brookings Institution

Kaitlin Lavinder is a reporter at The Cipher Brief. Follow her on Twitter @KaitLavinder.