Franco-German show of unity masks policy divide

Mon May 12, 2014 5:34am EDT
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By Noah Barkin

BERLIN (Reuters) - When leaders need to go out of their way to show the world they are united, it is usually a sign that all is not well.

Ruegen, a windswept island off the Pomeranian coast of Germany where Angela Merkel and Francois Hollande met for a boat tour and stroll on a pier late last week, is about as out of the way as it gets.

On Saturday, at the end of their 20-hour sojourn, the conservative German chancellor and socialist French president unveiled a joint statement on Ukraine and promised to coordinate closely on Europe's future once looming elections to the European Parliament are out of the way.

But their show of total unity, under a drizzling Baltic sky, should fool no one. Beneath the surface, Europe's most important relationship remains awkward and strained, dogged by an economic imbalance between Berlin and Paris that has seemed to widen even as the bloc's financial crisis has eased.

Two contentious Franco-German debates in the past weeks - the wrangling over the future of French trains-to-turbines group Alstom and a row over the strength of the euro currency - have only underscored the divide between the partners on either side of the Rhine.

A decade ago, the French government rallied to prevent German rival Siemens from snaring Alstom's choicest assets when the French firm was on the verge of bankruptcy.

Now it is reduced to pleading with Siemens to buy those same assets, and cajoling Berlin to go along with its dirigiste plan, in order to avert what Paris sees as an even worse fate for the once-proud maker of TGV high-speed trains - an Anglo-Saxon takeover, care of U.S. giant General Electric.

Separate complaints from Paris about the strength of the euro, currently hovering near a 2-1/2 year high of nearly $1.40, are not new.   Continued...

German Chancellor Angela Merkel (L) and French President Francois Hollande pose for pictures in front of the tall ship Gorch Fock I, in the northern city of Stralsund, May 10, 2014. REUTERS/Thomas Peter