Tuesday, April 25, 2017

'Germany’s EU dominance promotes frustration’ French anger at Merkel’s power, say expets

FRANCE is becoming increasingly frustrated with Germany’s dominance of the European Union (EU) with voters across the Channel wanting a revival of the Franco-German axis, according to experts.With Britain now on its way out of the the bloc due to Brexit, the imbalance in the relationships between the two key EU countries has been highlighted with France being exposed as the junior partner as it struggles to revive a flagging economy. French frustration with Germany’s dominance of the group is reflected in the sizeable vote on Sunday for the right-wing, anti-EU Front National party in the first round of voting in the presidential election, according to one expert. Sven Giegold, a spokesman for the the German Greens in the European Parliament said that the high level of support for Marine Le Pen, who at the time was leading the Front National, indicated “just how much German dominance in the EU promotes frustration about the EU in many countries.He added: “German EU policy has to gear for more solidarity.” Some French voters are also disillusioned with Emmanuel Macron, the En Marche! presidential candidate who will face Ms Le Pen in the second round of voting. Critics of the 39-year-old have dismissed the pro-European as simply being “deputy Chancellor” to Germany’s leader Angela Merkel.While Mr Macron came out top in the first round of voting in France with 24 per cent of the vote, France clearly indicated a sizeable anti-EU opinion with 41 per cent of all voters opting for one of two anti-EU candidates. Although the financial markets initially reacted favourably to the outcome in France, with the Dax in Frankfurt rising three per cent on the news, it appears that there are fundamental doubts over the future relationship between the two power-houses of the EU. The biggest problem appears to be the future direction of the eurozone, according to financial experts, with Mr Macron either unable or unwilling to push through needed reform.The two countries are at loggerheads over economic policy. Germany is pushing for France to adopt tax cuts and deregulation of its labour market as a way of revitalising its economy while France wants Germany to loosen its grip on its fiscal policy in an attempt to soften the impact of needed reforms. Jorge Kramer, chief economist at Commerzbank said: “Macron isn’t a genuine reformer. Discord over economic policy will persist in the eurozone.”EU Commissioner for Economic and Financial Affairs, Taxation and Customs Pierre Moscovici said recently at a meeting of the Peterson Institute for International Economics: "The challenges that lie ahead for Europe now are mostly of a political nature, but brought on by fundamental flaws in the eurozone single currency area, which have created a north-south divide that has led to a rise in populism in countries struggling to stay within fiscal limits. “The incomplete governance of the eurozone has produced or contributed to economic divergence rather than convergence between and within its members. “And this divergence has in turn fuelled populism, which still has its roots in economic discontent.“There is cultural discontent, but the cultural discontent comes from the economic discontent.” Mrs Merkel, so far, has been wary of softening her hard-line fiscal stance as she has one eye on re-election in September and any concession she made now would almost certainly impact negatively on the German people which could cost her votes. Indications appear to show that Mrs Merkel would be willing to change her stance as long as the future French president introduced credible reforms.Daniela Schwarzer, head of the German Council on Foreign Relations, a Berlin-based think-tank, said Mrs Merkel was likely to react positively to reforms but warned that “the eurozone must be strengthened before the next crisis”. Divisions though are not just at the national level, splits have also been appearing in the financial world. On one side is the European Central Bank (ECB) President Mario Draghi who wants to avoid any dramatic policy shifts due to the political uncertainty while Jens Weidmann, President of Germany’s Bundesbank is seen as an ardent critic of the ECB.
 http://www.express.co.uk/news/world/796149/Eurozone-EU-dominance-Brussels-France-Germany-Merkel-Macron

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