Macron back in Berlin to pitch 'New Deal' for Europe

BERLIN (Reuters) - When Emmanuel Macron last visited Berlin in January, he was seen as a long shot to win the French presidency, and couldn’t even get a meeting with Chancellor Angela Merkel.

FILE PHOTO - Emmanuel Macron (C), head of the political movement En Marche !, or Forward !, and candidate for the 2017 French presidential election, smiles during a visit to a qualification class for refugees of German railway operator Deutsche Bahn in Berlin, Germany January 10, 2017. REUTERS/Fabrizio Bensch/File Photo

On Thursday, the 39-year-old former investment banker returns to the German capital as the election frontrunner, with a promise to reinvigorate the Franco-German relationship and rehabilitate a European Union hobbled by Brexit, Donald Trump and a tide of anti-EU populism.

This time, Macron will get his hour with Merkel. But can he convince Berlin to sign up to an elusive “grand bargain” on Europe if he does manage to enter the Elysee Palace in May?

The urgency has never been greater. But the answer will depend on whether a president Macron can rebuild trust across the Rhine by delivering on his economic reform plans.

It may also hinge on the outcome of the German election four months later, when Merkel seems likely to face stiff competition from Martin Schulz, the Social Democrat who made a career in Brussels as a supporter of closer integration.

Even if all the pieces fall into place, German and French officials say it would be wrong to expect a sudden, great leap forward that would quell growing doubts about the future of the EU and its single currency.

It will take time to forge consensus between Paris, Berlin and other member states in an environment where the appetite for “more Europe” is waning and where developments on the ground can doom the best laid plans of the bloc’s biggest states.

“The most important thing will be to reestablish a dialogue between Paris and Berlin on Europe. A Macron victory would make that possible,” said Jean-Pierre Landau, a former French central banker and co-author of the 2016 book “The Euro and the Battle of Ideas”, which focuses on the Franco-German divide.

“But this will be a lengthy process of rebalancing and rebuilding the relationship. And it has to start with robust reforms of the French economy.”


For decades, France and Germany were seen as the “motor” of the European Union: if they agreed on a way forward, then others followed. But the expansion of the EU to 28 members and the divergent paths of the French and German economies over the past decade created an imbalance that impaired their ability to lead.

The divide was exacerbated by squabbling over policy during the euro zone financial crisis, with Germany - personified by hardline Finance Minister Wolfgang Schaeuble - imposing its vision of strict fiscal discipline on the bloc while France grumbled about a lack of vision and solidarity.

Macron, a centrist independent who has overtaken scandal-hit conservative Francois Fillon in the polls and is projected to beat Marine Le Pen of the far-right National Front in a second round run-off on May 7, wants to put an end to this standoff.

When he spoke in Berlin two months ago, he dismissed the constant sniping with Germany as a dead-end for Europe.

“We want a new deal with Germany,” said a senior member of Macron’s team. “If you just talk about euro zone reform or migration it won’t work. But if you talk about the big three to five challenges, you can find compromises.”

Claire Demesmay, of the German Council on Foreign Relations, believes the focus on bolstering European defense cooperation in response to Trump could restore balance to the relationship by broadening the discussion beyond economic issues. Ultimately however, Macron will need to show Germany that he means business on the reform front.

“He needs to be very quick,” Demesmay said. “He needs to have delivered by the time the new government is in place in Germany.”

The shape of that government will also be key. Macron’s people say they believe they could work well with Merkel or Schulz as chancellor, though they clearly see the pro-European Social Democrat (SPD) candidate as opening up more possibilities for change.

After meeting Merkel on Thursday, Macron will appear at an event with Sigmar Gabriel, the SPD foreign minister, and philosopher Juergen Habermas, a tough critic of the chancellor’s European policies.

But Macron’s team seems more concerned about the 74-year-old Schaeuble returning for a third stint as finance minister - a move that is likely only if Merkel wins and her next coalition partner does not claim the finance ministry for itself.

Schaeuble is a francophile and longtime supporter of European integration. But he has come to be seen in many capitals as an impediment to progress in Europe because of his focus on rules and fiscal discipline.

Asked about Macron, an official in Schaeuble’s ministry praised him for wanting to reform the French economy, but added: “I’m not sure it’s the right time for this big vision, this grand bargain that the French talk about.”

Reporting by Noah Barkin; editing by Giles Elgood