Daily Briefing The politics of Merkron’s cuddling

Amour in Aix; Germany must defend Canada against China; and the joy of Länderfinanzausgleich. Here's our Daily Briefing for Tuesday, January 22, 2019.

Angela Merkel and Emmanuel Macron, “Merkron", make a photogenic couple, as we’ve long known. Francois Mitterrand and Helmut Kohl held hands at Verdun, and that was touching. But Macron and Merkel go much further. Commemorating the end of World War I at Compiègne in November, they cuddled and snuggled (pictured). Who knows what they’ll get up to today in Aachen (Aix-la-Chapelle)? They’re meeting for a sort of love-in, and will be signing a new Franco-German treaty, 56 years to the day after the historic Élysée Treaty between Charles de Gaulle and Konrad Adenauer.

But the question that dominates the German and French media today is this: Is all this amity only empty pageantry, designed to cover up a dearth of real cooperation? Or is there substance in this treaty – some sign that they are genuinely revving up the old Franco-German “engine”?

Andreas has been editor-in-chief of Handelsblatt Today (formerly Handelsblatt Global) since March 2017. His articles can be found here. Quelle: Marko Priske for Handelsblatt
Andreas Kluth

Andreas has been editor-in-chief of Handelsblatt Today (formerly Handelsblatt Global) since March 2017. His articles can be found here.

I would say pageantry, mainly. When Macron last took a risk in the relationship, just after being elected, and proposed big reforms of the euro zone, Merkel left him hanging. She didn’t diss him outright; she just stalled and hemmed and hawed (that’s called “to merkel” in German) until Macron’s ideas were given up for dead.

The list of joint policies agreed in Aachen today is thus meant to sound long and impressive. But it isn’t, really. Both countries want to help their border regions to integrate better, the one along the Rhine facing Alsace, for example. Public-transit systems will issue uniform tickets valid on both sides, kindergartens will be bilingual, and so forth. They also want to cooperate more in foreign and defense policy. That’s hardly news. But the only tangible step is a new joint “council” – ie, another layer of bureaucracy. They will work together in the UN Security Council, which is great, but they won’t push to transform their membership (France’s is permanent, Germany’s rotating) into a joint seat for the EU.

So: Ho-hum. And yet, pageantry is not always empty. Form follows function, they say, and the Aachen Treaty is certainly long on form, short on function. But in European politics today, form sometimes is function. Amity can be its own message. When in doubt, cuddle.

Canada's eastern torment

Later this week, Merkel will be speaking at the World Economic Forum in Davos, where the assembled honchos, tycoons and influencers are apparently quite gloomy about the world economy. There is much that Merkel could, and should, talk about in that setting, especially since the leaders of America, Britain, France, China and India won’t be there this year, and she has the stage to herself. But one thing Merkel ought to make clear is this:

Germany unequivocally stands with Canada, its ally in ways formal and informal, and against China, as China wages an unacceptable campaign of verbal and political aggression against Canada. So says Thorsten Benner, the director of the Global Public Policy Institute in Berlin. Because China is so important for the German economy, that might cost a bit. So be it. READ MORE

Länderfinanzausgleich

“Some German words are so long that they have a perspective,” Mark Twain observed in his 1880 essay, “The Awful German Language,” which is required reading. “These things are not words, they are alphabetical processions.” That is why, as regular readers know, I will sporadically regale you with appropriate case studies. Today: Länderfinanzausgleich.

This word is not only a thrill for sado-masochistic linguists but also an educational tool for understanding why so many Germans fear and loathe a “transfer union” in the euro zone. The Länderfinanzausgleich, you see, is just that: a transfer union. Only this one works domestically, among Germany’s 16 federal states. They have to redistribute their revenues to avoid big discrepancies in financial strength. The richer states pay, the poorer states receive.

Well, the numbers are in for 2018, and nobody is surprised. Four states paid in (€11.5 billion, or $13.1 billion, in total), and once again Bavaria had to pony up by far the most (€6.7 billion). The other 12 states received, and once again Berlin gobbled up the biggest share (€4.4 billion), almost four times as much as runners-up Saxony and North Rhine-Westphalia each.

Is Bavaria directly analogous to Germany, Berlin to Greece, Saxony to Italy, and so forth? Of course not. But you’d be surprised how often I hear that in conversations in southern Germany. Here’s an idea for a PhD thesis: Investigate the correlation between German attitudes to eurozone reform and German financial geography. Any takers?

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