The Soft Underbelly of Europe's "Hard Core"

France and Germany used to see themselves as the European Union's "hard core," surrounded by concentric circles of less committed partners. Only the other four founding members of what was the European Community--Italy, Belgium, the Netherlands and Luxembourg--were admitted into the innermost circle of Europe's true believers.

No doubt, the post-WWII reconciliation between France and Germany--who once perceived and fought each other as "hereditary enemies"--has been the motor of European integration for half a century. Today, however, that Franco-German couple looks more like Europe's soft underbelly. The motor has turned into a brake.

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The traumatic experience of western disunity over Iraq in the UN Security Council--with the governments of Jacques Chirac and Gerhard Schröder leading the resistance to the US/UK led invasion of Iraq--demonstrated that Franco-German bilateralism has destructive side effects. Their perceived claim to speak for Europe antagonized much of the Union.

A European "hard core" is not an end in itself. Its raison d'être is to overcome national selfishness and to set a good example. If guided by the spirit of multilateralism, the Franco-German pair pulls Europe together. But this is precisely what France and Germany now refrain from doing in many fields of European integration.

In October last year, Chirac and Schröder struck a deal on the EU's Common Agricultural Policy (CAP), ensuring that France will remain the biggest beneficiary of the farm budget after the EU takes in 10 new members in 2004. The CAP consumes about half of the Union's budget--an unimpressive symbol for a community that aims to become a player in world politics.

Now, the agreement underpinning Europe's single currency, the euro, has come under Franco-German attack. Once again, the two countries have forged a "coalition of the unwilling"--this time against the sanctions mechanism of the European Stability and Growth Pact, which limits the size of euro members' budget deficits to 3% of GDP.

The European Central Bank has indicated that the Pact's collapse could force up Euroland interest rates. In other words, countries complying with the Pact would now pay the bill for the lack of fiscal discipline in France and Germany.

Germany's behavior is particularly galling, as it had been the strongest advocate of the Stability Pact. Under Chancellor Helmut Kohl, it gave up its beloved Deutsche Mark for the sake of deepening European integration, but also to sooth French fears that Germany was poised to establish monetary hegemony over the continent. France, in turn, had to swallow the Stability and Growth Pact to convince a reluctant German public that the euro would be as stable as the Deutsche Mark.

Abiding by European rules should go without saying, even if that means adopting unpopular austerity measures at home. It is understandable that good Europeans like the Dutch and the Finns find it unacceptable that heavyweights like France and Germany now claim to be more equal than smaller countries. If the EU becomes used to that idea--beyond fair institutional arrangements that take into account demographic differences--the process of European unification will lose its legitimacy.

What is at stake for Germany is not simply its reputation as a source of economic dynamism and an anchor of monetary stability within the EU. It may also be destroying the main pillar of its influence in international politics more broadly--that is, its ability to act as an "honest broker," to use Bismarck's famous phrase.

The postwar architecture of German foreign policy has been made up of several bridges--to the United States, to France, to Britain, to smaller EU member states, to Central and Eastern Europe, and to Russia. The German way of diplomacy consisted of avoiding hard choices between Paris and Washington, Moscow and Warsaw, the EU and NATO, big neighbors and small ones. If a choice had to be made, Germany gave America priority over France.

Gaullism, or the vision of a French-led European counterweight to the US, has never been an option for Germany. Neither, to be sure, has the Euro-skeptic British version of Atlanticism. For all German Chancellors from Konrad Adenauer to Helmut Kohl, France was the favorite European partner, but they refused to accept French offers to create a "Franco-German union" that would destroy the mediating character of German foreign policy.

Tragically, the bridges to the US as well as to Central and Eastern Europe have been damaged by German diplomacy during the Iraq crisis, and the bridge to the smaller EU member states is now in the process of being damaged by the Teutonic colossus's noncompliance with the Stability and Growth Pact.

As for the euro, the Germans have to accept that if they want to remain good Europeans, they have to get their own fiscal house in order. For whatever they do or refrain from doing in terms of domestic reforms affects their partners.

As for the future of Europe's "hard core," such an idea only makes sense from a German perspective if it does not limit Germany's role as a moderator. The best solution for Europe would be an inner circle consisting of France, Germany, and Britain, at least. Together, these three countries represent the complete diversity of foreign policy traditions that one can find in the future 25-member EU.

Trying to pool these traditions may look like trying to square a circle. But the alternative is a European Disunion that no one will take seriously as a player in world politics. That is an outcome that no true European believer in France and Germany should be prepared to countenance.