A Meeting Of Minds

French president Jacques Chirac had reason to feel at ease last week as he met other European Union leaders in Seville for their twice-yearly formal summit. His party’s convincing electoral success on June 16 meant that for the first time in five years, the President would not have to share the stage and trade courteous barbs with Socialist Prime Minister Lionel Jospin. The conservatives’ victory in France also gave substantial new weight to the general rightward drift in the E.U., where 10 of 15 governments include centerright parties. At the Quai d’Orsay, a quiet hope springs from the very real prospect that the ponderous weight of Germany could be added to the scale if the conservative coalition behind candidate Edmund Stoiber wins in September.

Such a result would mark a new turn in the tattered relationship between Germany and France, without necessarily ensuring it would improve. Helmut Schmidt and Valéry Giscard d’Estaing reached across party lines to keep the motor of the European Union oiled in the late 1970s, as did Helmut Kohl and François Mitterrand in the ’80s and ’90s. But it has sputtered and German Chancellor Gerhard Schröder, especially since Chirac held fast against German plans for a deeper reform of European agricultural policy at a previous meeting in Berlin in March 1999. The Franco-German axis, which was the germ of the European idea and for decades the main plow of integration, seems to work better these days at blocking it.

When it works at all. In the runup to Seville, the relationship looked more parlous than ever. Chirac knew that calculations undertaken by his new government under Prime Minister Jean-Pierre Raffarin would reveal France’s budget deficit to be worse than the previous government’s claim of 1.9% of GDP. As recently as March, Chirac joined his E.U. colleagues in reaffirming his vow to balance the state budget by 2004, both to shore up the euro and to prepare for new fiscal challenges that could arise after the Union’s enlargement. Then in the presidential campaign he promised a 30% cut in income taxes over the next five years, a move, he conceded, that would make it hard to balance the budget before 2007. Little wonder Chirac didn’t want the new number out before the Seville summit.

But out it came, via a leak from — of all places — a German government source, who said that a reassessment of France’s 2001 budget would show a deficit of 2.6%. That is precisely the level at which the European Commission in January warned the German government that it was nearing the 3% maximum deficit stipulated for countries in the euro zone. French officials were furious at the deliberate indiscretion. But the Germans weren’t willing to let Chirac get off scot-free for announcing new tax cuts when Germany barely escaped censure after the world economic slowdown punched a hole in its finances.

E.Ufi finance ministers reached a compromise late last week by redefining the goal: now it is not “balanced” national budgets by 2004, but ones that are “close to balanced.” Beyond that, French Finance Minister Francis Mer made his government’s commitment to fiscal rectitude dependent on 3% economic growth over the next two years, a far cry from the growth rates achieved now by France and the E.U. as a whole.

Beyond this spat looms another over the old issue of agricultural reform. Germany has so far strongly opposed giving direct subsidies to farmers in the 10 countries seeking to join the E.U. by 2004. Schröder says such a commitment would cost Germany ?2 billion a year. France, currently the largest single beneficiary of the E.U.’ ?40 billion Common Agricultural Program, has backed a Commission plan to phase in direct payments for new members. That would allow current E.U. members to save money on farm aid to the new members without killing the category altogether. That is particularly important for France, where agricultural payments are seen as an entitlement by powerful and often militant farming interests.

The leaders hardly probed that sensitive area at Seville, since the Commission will be presenting details on an ambitious reform of the agriculture regime next month. They did manage to underline their concern over immigration, vowing to work out a common asylum policy in the next year. But France, concerned to preserve its relations with ex-colonies and the Middle East, scuttled a joint British-Spanish proposal to sanction developing countries that do not try to stop illegal immigrants from proceeding to Europe.

As for the Germans and the French, their often divergent interests largely converge when it comes to the E.U.’ future. Neither Paris nor Berlin is keen to see the Brussels institutions take too independent a role in implementing new common initiatives, from foreign policy to justice. Yet it was only with the blessing of both those countries that the euro was launched and the commitment to take in former communist countries in Central and Eastern Europe was made. “In both countries there’s the feeling that we’ve taken a giant step and now it’s time for a pause,” says Henrik Uterwedde, deputy director of the German-French Institute in Ludwigsburg. “No more naive federalism.” More decorum is sure to return to the Franco-German relationship. But the Union’s smaller countries may well find it will fall to them to haul the two Continental giants into ever deeper integration. Currently, both countries are more interested in tending their own gardens as they see fit.