For Macron, Security Holds the Key to Eurozone Reform

Emmanuel Macron reviews troops during a visit to a submarine base near Brest. Photo: Getty Images.

Emmanuel Macron’s ambitious plan for EU reform seems to rest on economics. Macron is betting that a successful domestic reform programme will buy him enough goodwill in Germany to make French-favoured changes in European economic governance, like the establishment of the post of a European finance minister managing a eurozone budget, politically viable.

But this is risky. Economic reforms can be slow in producing results, and Macron’s popularity may prove fickle in the face of mobilization against his reforms. His party won a majority in the legislature but with a record low turnout that indicates unusual reticence to a new president.

And Germany may be less able to reciprocate than Macron hopes. If, after September’s election, Angela Merkel were forced into a coalition with the resurgent Free Democrats, her space to satisfy French demands will be very narrow. Germany may anyway not be too eager to anoint France an equal partner in leadership of Europe. German political clout after all has been enabled by French economic malaise. As the eurozone crisis has shown, Germany sees competitiveness and reform as a process rather than as definable goals. Whatever his efforts, Macron may see Germany constantly moving the goalposts.

Instead, Macron should consider pursuing a political bargain with Berlin on the basis of security and defence, an area where Germany is much more vulnerable than what its economic strength suggests.

America’s security guarantees have long served Germany well, sparing it both from hefty defence expenditures and the tortuous debates that a more active national security policy would have generated among the German people. But now, Donald Trump is threatening to upset the arrangement upon which German post-war prosperity and contemporary economic dominance have relied. Substituting at least part of the role played by the US with EU capacities dovetails with long-held interests of Germany: to share the costs of European security with others while it accrues most of the benefits of economic integration.

Thus, Germany urgently requires a revamping of European security in a way that safeguards its economic and political clout and is palatable to its pacifist public opinion. In both cases, France is crucial for safeguarding Germany’s prosperity and legitimacy as a European power. Without France, no real common EU security and defence can be built, and without it Germany would be vulnerable to Trump’s blackmail or be forced to pursue a more active security policy unilaterally – something costly and potentially unpalatable to its electorate.

Despite Germany’s vulnerability, Macron has preferred to keep economics and security separate from one another until now. He likes to present eurozone reform and deeper security cooperation, like the development of a European fighter jet recently announced by him and Merkel, as parallel processes pointing to the same goal: the strengthening of European integration. In this way, however, Macron has unconditionally pushed for closer cooperation in perhaps the only policy area where France holds leverage against Germany.

This does not mean that Macron should backtrack on reform or make it conditional on German concessions. Making the French economy competitive is a necessary task and economic change in France will certainly go a long way towards placating German elites and public opinion. But Macron must pursue a sensible bargain, whereby France satisfies Germany’s desire to Europeanize its security needs while Berlin concedes to changes towards a more political eurozone as demanded by France for years.

Germany and France have struck bargains spanning economics and grand strategy before, most notably in Maastricht, where Germany accepted a French-inspired project for a common European currency to legitimize its unification. Ultimately the economy and security are connected in very practical ways as well. The tight fiscal framework within which eurozone members must operate also takes a toll on their defence capabilities – a fact highlighted by the recent resignation of the head of the French army in protest over Macron’s planned expenditure cuts.

Given German security needs and France’s ability to satisfy them, Macron has more space to pursue changes in economic governance than what he has allowed himself. It is a goal he can and must pursue immediately.

Dr Angelos Chryssogelos, Academy Associate.

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