Analysis: Franco-German chill reshuffles cards in Europe

Mon Dec 10, 2012 1:59am EST
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By Paul Taylor

PARIS (Reuters) - A chill has settled over the Rhine seven months after the election of Socialist French President Francois Hollande, reshuffling the cards in Europe's perpetual power game.

The cooling of traditionally close Franco-German relations was partly an intentional step by Hollande to demonstrate that he is not in conservative Chancellor Angela Merkel's pocket but wants to change the policy direction of the European Union.

It also reflects a fraught process of rebalancing power to accommodate Germany's greater political heft and economic clout.

Despite vows of ever closer cooperation that are sure to mark the 50th anniversary next month of the treaty that sealed post-war Franco-German reconciliation, tension is likely to simmer at least until next September's German general election.

Hollande was keen to distance himself from his conservative predecessor Nicolas Sarkozy's exclusive alliance with the German leader, which became known as "Merkozy" because of the dominant role they played in steering the euro zone debt crisis.

Hollande and Merkel have differed publicly over the right mix between austerity and growth policies, the future of the euro area, a European banking union, and industrial policy.

A series of disputes over common euro zone bonds, the EU budget and the aerospace industry have exposed mutual distrust between German and French officials and business leaders, despite entrenched habits of cooperation.

"It's not an easy dialogue," said Bruno Le Roux, parliamentary floor leader of Hollande's Socialist Party. "It was on the wrong track for the last couple of years and the fact that France was in an electoral cycle for a year and now Germany is in an electoral cycle for a year doesn't help."   Continued...

France's President Francois Hollande (L) walks past Germany's Chancellor Angela Merkel during a summit of European Union leaders discussing the European Union's long-term budget in Brussels November 22, 2012. REUTERS/Yves Herman