Euro crisis from german and french perspectives in 2013

53 EURO CRISIS FROM GERMAN AND FRENCH PERSPECTIVES IN 2013 Robe K. MacG ego F ee-lance w i e Ká anská 274/13, 108 00 P aha 10 obe kmacg ego @yahoo.com Abs ac A e a e y sho ime o he “Golden Age o he Eu ozone” ha d imes ha e a isen o Eu opean in eg a ion. They e ealed c acks in he e y ounda ions, and (un il hen) hidden hough s and opinions o key playe s in he EU a ena. Recen emo ions and di e en le els o a sense o obliga ion o deal wi h cu en p oblems seem o di ide ins ead o b ing oge he he big DUO, he Eu ozone’s ac ion o ce, and e en he EU i sel . I should be no ed ha Eu opean in eg a ion a e he Second Wo ld Wa was a p oduc o he combina ion o F ench and Ge man ways o hinking. In 2013, i seems ha his pu pose-buil duali y is alling apa . The aim o his pape is o esea ch and analyze se e al aspec s and elemen s o he F anco- Ge man pola i y ela ionship o he Eu ozone scene y. Obse a ion and compa ison leads o a numbe o su p ising esul s, which a e suppo ed by he da a. Keywo ds: Eu ozone, C isis, In eg a ion, Expo , GDP. In oduc ion F ance and Ge many we e wo o he main a chi ec s o he a ious ea ies and acco ds which g adually led o he o ma ion o he EU. Though ancien i als, as he wo ‘cen al powe s’ in he alignmen s ha would become he EU, he F ench leade s, such as Mi e and and Gisca d d’Es aing, we e able o ea hei is-à- is Schmid and Kohl as good iends. In he p ospe ous imes ha p eceded he c isis o 2007, hey helped o m a mu ual admi a ion socie y, F ench and Ge man leade s and o he unc iona ies wo king hand in hand wi h each o he , he wo powe s conni ing o ‘se he agenda’ p io o any EU summi . Ye inlaid di e ences, such as a i udes owa ds wo k and p omo ing p i a e en e p ise, be ween he wo coun ies would end o ake on added emphasis when he EU ell in o ha d imes. How ha e hese wo a ed since? The p oblem o he assessmen o he complex ela ionship o F ance and Ge many (1) can be amed and de eloped wi h he employmen o he app op ia e me hodology ocusing on he iden i ica ion, desc ip ion and analysis (2). The p esen ed da a and p oblem sol ing sugges ions (3) dese ed an in e disciplina y discussion (4) which should esul in a conclusion w apping he p esen ed hough s and pu ing hem in o a gene al se ing. 1 S a emen o a p oblem – assessing he ela ionship o F ance and Ge many Wi h he 20 h cen u y ha ing been de as a ed by wo Wo ld Wa s, he Cold Wa , he Dep ession, Fascism, Communism, and pe secu ion o he In elligen sia and Jews and Ch is ians, leade s o exhaus ed ‘Middle Eu ope’ unde s andably el ha a spi i o coope a ion, wo king oge he , could p e en u u e con lic s, “The Golden ule in ac ion”. Thusly, o o e 50 yea s now, leade s in Ge many, F ance, I aly and o he coun ies ha e been p oud o hei peace ul g ow h and co-exis ence, ollowing Ame ica’s jump-s a ing he e-building p ocess h ough he Ma shall Plan. As economies con inued o lou ish, he Eu opean Mone a y Union was in oduced by he Maas ich T ea y 1991/1992, one o he p e-condi ions se by F ance o Wes Ge many's uni ica ion wi h Eas Ge many. The ‘Eu o’ cu ency was in oduced in 1999, aking physical o m in 2002. Besides being a symbol o poli ical uni y, i was p edic ed ha he common 54 cu ency would inc ease c oss-bo de compe i ion, lowe impo -expo cos s, and lead o p ice s abili y, among o he bene i s. In addi ion, i was el ha he common cu ency would help s imula e p og essi e con e gence be ween membe s a es. While many o he mic o and mac oeconomic goals we e a ained, i soon became ob ious ha eal con e gence had no occu ed in all membe s a es, and ha e en he majo i y o membe s a es we e bla an ly iola ing he EU s abili y and g ow h pac , which was insis ed upon by Ge man inance minis e Theo Waigel. Though popula pe cep ion would place I aly, Spain and G eece as he guil ies culp i s, F ance and Ge many we e also among hose caugh iola ing hei own ules. How ha e he wo allies esponded? 2 Me hods The bundle o Eu opean in eg a ion issues a ound he single-common cu ency and i s a ea and e a, he Eu ozone and Eu o c isis, needs o be app oached and add essed wi h app op ia e scien i ic me hods. These p edominan ly in es iga ing echniques mus be deployed in an open-minded o m, as his s ongly in e disciplina y opic and s a ed p oblem canno ely jus on con en ional ways o acqui ing and p ocessing in o ma ion. The e is an abundance o da a and e idence, bu i is no always empi ically measu able and su icien ly objec i e. As a ma e o ac , he key poin in he s udy o he Eu ozone (objec ) is he s andpoin o he examine (subjec ), hus ine i ably he wo s onges playe s - F ance and Ge many - p esen a di e en , o en ha d o econcile, analysis. In o he wo ds, he e seem o be wo leading se s o hypo hesis, analysis and conclusions – he Hollandism s. Me kela ianism. The ul ima e me hodological selec ion o he s a ed p oblem led o he employmen o scien i ic p ocedu es o iden i ica ion and desc ip ion while using an abundance o esou ces, including s ic ly academic pape s as well as p ess eleases and newspape a icles, along wi h he obse a ion o he gene al economic se ing and a ailable economic da a. The analysis is p edominan ly unc ional and compa a i e wi h analogy elemen s. Bo h induc ions and deduc ions a e used as app op ia e. 3 Da a and p oblem sol ing The poli ical and economic Eu opean in eg a ion was se in mo ion ollowing he Schuman Decla a ion based on h ee ea ies in he 1950s, he T ea y o Pa is es ablishing he Eu opean Coal and S eel Communi y (ECSC) and by he T ea ies o Rome es ablishing he Eu opean Economic Communi y wi h a common ma ke (EEC) and he Eu opean A omic Ene gy Communi y (Eu a om). The Eu opean Cou o Jus ice (ECJ) was among he ins i u ions o med and ecognized by all o hem o all h ee communi ies. The ECJ was able o change he T ea y o Rome es ablishing he EEC in o a cons i u ion and laid down he legal ounda ions o Eu opean in eg a ion, especially in he economics ield. A d i ing ac o o Eu opean in eg a ion was o s eng hen he economic coope a ion be ween Ge many and F ance so as o p e en u u e con lic s in Eu ope [16]. The e ollowed a numbe o o he ea ies, including he T ea y o Maas ich es ablishing he EU wi h a single ma ke o in e nal ma ke as well he expansion o he membe ship o 15. Things seemed o be going well, wi h posi i e p ospec s o Eu opean in eg a ion. Ye he u u e was no sanguine, bu o a ious easons many inside, as well as ou side, playe s decided o o e look dange signs, o a leas did hei bes o minimize hem. The e o e, ins ead o an in-dep h and ca e ul implemen a ion o ongoing legi ima iza ion o he sup ana ional app oach and legi ima e moni o ing o he ue willingness and p e e ences o he Eu opean ci izen y, an o e ly posi i e pic u e was pain ed, d owning ou any dissen . The i e decades o Eu opean in eg a ion we e hus desc ibed as glo ious and success ul, he EU 55 p aised as i ally con ibu ing o p ospe i y, democ acy and secu i y in Eu ope and i s enla gemen policy as a wonde ul ins umen o o eign policy. Ine i ably, i was decided ha such a splendid achie emen should be delinea ed in a solemn cons i u ional o ma , making i mo e de ined, o icial, and illus ious (and also e lec ing on he glo ious leade s). Thus, he p epa a ion o he Cons i u ional T ea y s a ed en husias ically bu hen became an abo ed a emp o be subs i u ed by he e o m ea y o Lisbon signi ican ly changing he Maas ich T ea y on EU (TEU) and he Rome T ea y on EEC, becoming he T ea y on he Func ioning o EU (TFEU) [16]. The Economic and Mone a y Union ( he EMU) was d eamed up du ing 1988-1989 by a g oup o cen al banke s, p esaging he Maas ich T ea y o 1991. Banke s would come o ha e an inc easingly in luen ial ole in he u u e, as he Eu opean Cen al Bank (ECB) would be made up o 11 cen al banks cha ged wi h mone a y policy. Fo hose coun ies wishing o join he EMU, ‘Con e gence c i e ia’, budge a y and mone a y s ic u es, we e es ablished. The c i e ia ules applied o exchange a es, na ional deb , in la ion, in e es a es, size o budge de ici s, wi h he UK and Denma k (o icially) and Sweden (de ac o) op ing ou . A uni ied cu ency o Eu ope, less han 60 yea s a e he Second Wo ld Wa , was highly signi ican , and also a sign o u he in eg a ion among he membe na ions. The aim o g owing c oss-bo de ade, inc easing e iciency in inancial as well as goods and se ices ma ke s and educing anspo a ion cos s and cos s o doing business seemed well wi hin each. Ano he goal o he Eu o was achie ing p ice s abili y. Howe e , i should ha e been clea o all ha he ‘g ea equalize ’ o a common cu ency would lead o he mo e e icien and compe i i e manu ac u ing coun ies making in oads in o hose coun ies less well- o ganised. The business eali y pu hese ideas, goals and expec a ions unde he ‘acid es ’, and he un o una e ou come pushed he big EU duo in o con inued s ess. These wo close allies ha e p esen ed di e gen o unes, wi h di e ing solu ions ... and his has his o ic oo s. Two o he main p oponen s o he Eu o, Jacques Delo s, he F ench Head o he (in) amous EMU and EU c ea ing Commission, and Helmu Kohl, Ge man Chancello du ing his Commission ime, admi ed, a e he ac , ha hey each had a e y weak backg ound in economics, and i (e en ually) showed. In e es ingly enough, i was he same Jacques Delo s, who wo decades la e bi e ly s a ed ha he Eu o was lawed om he e y beginning and, in e e ing o i s c ea o s, said “and now e e yone mus examine hei conscience” [17]. Thus, acco ding o he o me a chi ec o he single cu ency, he Eu o was doomed om he s a [12]. His sugges ion abou examining one's conscience has pe haps al eady been unde aken by himsel [19]. The idea o a mone a y union wi h no eal iscal union has p o en o be ha owing. I was no pu o a democ a ic o e o hose who would be mos impac ed, namely EU ci izens. As Economis Roge Boo le w o e, he Eu o “...wasn’ willed by he people bu was a he h us upon hem by hei leade s, wi hou su icien hough o p epa a ion. They ha e c ea ed a mons e which h ea ens o des oy he Eu opean economy – and wi h i , o h ea en he wo ld” [4]. Howe e , in he sho e m, he Eu o Zone’s goal o p ice s abili y, while a ge ing in la ion, quickly gained accep ance in inancial and o eign exchange ma ke s, bond ma ke s apidly became in eg a ed, leading o a igh ening oge he o go e nmen bond yields, he a ious coun ies' a es ending downwa ds owa ds well- ega ded Ge many's le els. The dec ease o he de ia ion o he con e gence o in e es a es in he las decade is shown in he g aph in Fig. 1. 56 Sou ce: [2; 3] Fig. 1: Con e gence o in e es a es Appa en s abili y diminished cu ency isk, and inancial ins i u ions ound i inc easingly easy o bo ow ab oad. This led, in u n, o inc eased lending o he cons uc ion indus y and housing sec o , p ope y alues ( empo a ily) ose and deb inc eased. As he global inancial c isis se in du ing 2007, howe e , bad bank deb s and la ge go e nmen al deb s we e exposed. “Rules a e made o be b oken”, said Gene al Douglas MacA hu . Al hough he Eu o con e gence c i e ia se by he Maas ich T ea y, i.e. he equi emen s o en e he hi d s a e o he EMU, include clea ly he deb c i e ion o 60% and he de ici c i e ion o 3%, bo h F ance and Ge many ailed o mee hem and hus do no sa is y A .140 o he TFEU and he S abili y and G ow h Pac (SGP). As a ma e o ac , bo h coun ies iola ed hem soon a e he signa u e o he SGP in 1997 and he same goes o almos all he o he membe s o he Eu ozone. These iola ions we e cons an ly epea ed and ne e esul ed in any punishmen , which only encou aged u he ansg essions [11]. “F ance has egula ly b oken he EU and Eu ozone's 'golden ule' ha budge de ici s should no exceed 3pc o GDP annually, (wi h) a nonchalance ha many belie e helped sow he seeds o he cu en deb c isis” [20]. The eal con e gence does no occu in all membe s a es. The eg ession modes, explana o y a iable and dummy a iables a e s a is ically signi ican and o he pe iod o 1995-2010 sugges ha one o he slowes con e ging coun ies is Ge many [13]. In his espec , he awa eness abou basic mac oeconomic da a abou F ance and Ge many is c i ical and hus is ecapi ula ed in he ollowing ables, i.e. in Tab. 1 o F ance and in Tab. 2 o Ge many. Tab. 1: O e iew o F ance GDP, go e nmen de ici /su plus and deb in he EU 2009 2010 2011 2012 GDP in million Eu o 1 885 763 1 936 720 2 001 398 2 033 648 Go e nmen de ici - 142 223 - 136 779 - 105 392 - 98 196 Ra io o annual de ici o e GDP - 7.5% - 7.1% - 5.3% - 4.8% Accumula ed go e nmen deb in million Eu o 1 493 385 1 594 977 1 716 887 1 833 810 Ra io o accumula ed deb o e GDP 79.2% 82.4% 89.8% 90.2% Sou ce: [2] 57 Tab. 2: O e iew o Ge many GDP, go e nmen de ici /su plus and deb in he EU 2009 2010 2011 2012 GDP in million Eu o 2 374 500 2 496 200 2 592 600 2 643 900 Go e nmen de ici - 73 180 - 103 440 - 20 230 + 4 090 Ra io o annual de ici o e GDP - 3.1% - 4.1% - 0.8% + 0.2% Accumula ed go e nmen deb in million Eu o 1 768 919 2 056 089 2 085 181 2 166 278 Ra io o accumula ed deb o e GDP 74.5% 82.4% 80.4% 81.9% Sou ce: [2] 4 Discussion In o his maels om, bols e ed wi h Socialis e ou , wi h p omises o inc eased social spending, a oiding aus e i y p og ams imposed by o he EU na ions and c ea ing mo e jobs – a leas in he public sec o – came he sel -p oclaimed ‘no mal p esiden ’, F ancois Hollande. F om he s a o his aking powe , he augu ies we e no p opi ious, as Hollande was d enched by a sudden ain squall a his inaugu a ion, and la e ha day his je was s uck by ligh ning as he was making his way o Ge many o mee wi h Angela Me kel. When he inally a i ed a he Be lin ai po , again in a downpou , he go los on he ai ield's ed ca pe e iewing he Ge man oops, and had o be guided i mly by M s. Me kel's g ipping his elbow, a sign o hings o come. Inasmuch as he leade s o Ge many and F ance had, o many decades, oge he mapped ou wha he agenda would be p io o any EU summi , Me kel and Hollande we e a ed o wo k oge he ...bu ha didn' mean ha hey had o like i , o espec each o he . Be o e he F ench elec ion, i was ob ious ha mos EU leade s, Me kel included, hoped o he e-elec ion o Hollande’s p edecesso , Nicholas Sa kozy, which did no bode well o Hollande’s u u e ela ions wi h Me kel. Ea ly on, M . Hollande began dis ancing himsel om aus e i y measu es. P io o he EU summi in Oc obe o 2012, Hollande a emp ed o ambush M s. Me kel by o ming a ‘Medi e anean F on ’ o F ance, Spain, I aly and Po ugal o b eak Ge many’s hold on policy. His e o s ailed ignominiously, Ge many was annoyed, and Me kel began s eng hening ies o he UK's Da id Came on. Hollande and Me kel ough o e supe ision o na ional budge s, and acco ding o a epo e p esen . “Such an open clash be ween he F ench and Ge man leade s is a e a EU summi s, a sign ha Eu ope's landscape has changed adically since M . Hollande ook powe .” [8]. B eaking us wi h he Ge mans was one o he leas o Hollande’s p oblems, howe e , as his unpopula aising o he op le el o pe sonal income axes began o d i e weal h and he weal hy (no jus Ge a d Depa dieu) om F ance, lessening he numbe o en ep eneu s and hus losing job c ea ion oppo uni ies. When A icle 6 o his new ax law aised he op a e o capi al gains ax om 34.5% o 62.2% (in B i ain i is 28%) i se o a i es o m o p o es om businessmen, al eady s agge ing unde es ic i e labou laws. A icle 6 was labeled ‘economic illi e acy’ and a disas ous economic mis ake. In Sep embe , his budge called o highe axes, bu no slimming o he ga gan uan s a e spending, wi h no plans o inc ease expo s o encou age business, o o se F ance’s long e m loss o global compe i i eness. A his poin , Ge many's inance minis e , Wol gang Schauble, asked a (Ge man) panel o op ad ise s o examine possible e o m p oposals o F ance. In No embe , F ance was s ipped o i s co e ed AAA s a us by inancial a ings agencies, unemploymen hi a 13-yea high, while i s insis ence o main aining high F ench ag icul u al subsidies helped lead o he ailu e o he EU o each an acco d on EU spending o 2014-2020. Hollande has only nibbled a he 58 edges o he de ici , cu ing 10 Billion Eu os in spending and aising axes (mos ly on he ich) by 20 billion, he esul insigni ican o a 2 T illion Eu o budge . When o me P esiden Geo ge W. Bush amously joked ha one o F ance’s p oblems is ha he e is no F ench wo d meaning ‘en ep eneu ’, he hi he nail on he head. Al hough Hollande has spoken abou s imulus spending, he has no unde aken much needed e o ms o he es ic i e business en i onmen , mainly labou law. “The F ench labou code has 3,650 pages and 200 pages a e added e e y yea . The Swiss labou code has 70 pages and I do no hink Swi ze land is a less e icien economy o labou ma ke ” says Hen i de Cas ies, CEO o Axa, a F ench Insu ance company which is one o he la ges in he wo ld [6]. In F ance, when a company g ows in size such ha i needs mo e han 50 employees, 34 addi ional labou laws and es ic ions ake e ec , discou aging businesses om expanding. This helps explain why he e a e in F ance ba ely 4,000 SMEs – Small and medium en e p ises – p opo iona ely only hal o he o al ha exis s in ei he Ge many o G ea B i ain [1]. Also, a mul i ude o many illogical ules and di ec i es c ea e ha oc o any po en ial o g ow h, his du ing a e ible slump. Fo ced on business and p i a e indi iduals wi h bu eauc a ic e ou , “They cos he 27 Eu opean Union coun ies an a e age o 3.7 pe cen o hei g oss domes ic p oduc a yea , mo e han $10 billion in he case o F ance, and hold back an incalculable amoun o new in es men ” [7]. De Cas ies o Axa poin ed ou ha wi h F ench public spending a 56 pe cen o GDP i is 10 pe cen age poin s mo e han he a e age o he o he Eu ozone coun ies, he di e ence being 200 billion Eu os, one en h o F ance’s 2 illion Eu o economy. “This 200 billion Eu os is aken ou each yea om he people who know how o make money, c ea e jobs and os e g ow h o subsidize bene i s and public p ojec s ha do no necessa ily ha e any signi ican a e o e u n, so i is no su p ise ha he compe i i eness is no op imal” [6]. New ules o wheelchai access and i e p o ec ion h ea ens o shu down 80% o small independen ly un ho els, mos o hem in cen u ies-old buildings which a e unable o enla ge hallways o s ai s. A bu eauc acy, when i becomes sick o dys unc ional, is e med a bu eaupa hy, and he F ench e sion has a la ou all i s own. In addi ion, he cu en global pos -mode n socie y is ounded on communica ions and cu en success ul EU p ojec s, such as TLD.eu o o he p ojec s in he sphe e o in ellec ual p ope y, a e concep ually based on he echnical ha moniza ion and s ong delega ion o P i a e law subjec s [14]. These well p o en co ec concep s should become an inspi a ion o he EU [15] and should p eoccupy he minds o EU leade s and ac o s much mo e han he d i e o inc ease he numbe o pages o a ious codes and egula ions o he eage ness o ha e supe mode n wide ele a o s in medie al buildings. In 2013, Hollande’s bad luck con inued, wi h he Cahuzac scandal, whe ein he budge minis e , in cha ge o igh ing ax aud was ound o ha e been a ax auds e himsel , holding a sec e Swiss bank accoun , and is aced wi h jail. In addi ion, he minis e o indus ial eco e y, A naud Mon ebou g, once again p o ed his un i ness o he job by chasing away a 300 million dolla in es men om Yahoo, his coming jus a e p e en ing Ti an In e na ional om ying o buy a ailing Goodyea F ench i e plan , o go along wi h simila ailu es. A highly unpopula o cing h ough o Gay Ma iage has led o he la ges s ee p o es s in 30 yea s, e lec i e as well o Hollande’s unpopula i y. In a mock elec ion, i is es ima ed now ha he would ga ne bu 19% o he o e, wi h igh is Ma ine Le Pen ahead wi h 23% and o me P esiden Sa kozy ne ing 34% [18]. Pe haps o ake he hea o Hollande om he F ench ci izen y, in Ap il o his yea se e al o Hollande’s minis e s began o make insul ing ema ks abou Ge many, aus e i y, and M s. Me kel, wi hou being 59 held accoun able o hei ema ks by Hollande. The Ge man esponse was o leak a memo by some o M s. Me kel's coali ion pa ne s which labeled F ance as “Eu ope’s bigges p oblem child” wi h a sick economy and a e o m package ha was, a bes , aimless. M s. Me kel hen denied ha she knew o he epo o ag eed wi h i . As M s. Me kel migh say, “Touche!” Why does Ge many igh so ha d o keep he Eu o, which has cos so many people in G eece, Spain, Po ugal and o he coun ies hei jobs and u u es? Because i is in hei own bes in e es . The Ge man “business and poli ical eli es know ha he Eu ozone p o ides Ge man expo e s wi h a la ge ma ke o a he uncompe i i e coun ies ha buy hei goods...Me kel mus explain ( o Ge man o e s) ha Ge many is paying in o he bail-ou unds no o idealism bu ou o sel -in e es ” [10]. Ge many has been es aining i ’s domes ic consump ion, in he ace o calls om he o he EU zone membe s o inc ease i , while i has become an expo -d i en na ion. In No embe , 2012, he US T easu y depa men eleased a damning c i icism o he e-occu ing ade su plus o Ge many, b anding i as a g ea e enemy in his ega d han China. Ge many's cu en accoun su plus a ha poin was a 6.3% o GDP, while China ( o a ious easons) was down o 2.6%, making Ge many he bigges single sou ce o ade imbalance in he wo ld. The epo said ha he EMU egime o Sou he n aus e i y was no being me by o se ing s imulus in he No h coun ies, hus holding back global eco e y [9]. Bu as o me GM Chai man ‘Engine Cha lie’ Wilson amously decla ed “Wha ’s good o Gene al Mo o s is good o he USA”, and wha ’s good o Ge many is......good o Ge many. In e o GM, GM Eu ope’s Opel-Vauxhall has epo ed losses o $1.8 billion in 2012, Fo d Eu ope los $1.75 billion, and Peugeo -Ci oen o F ance los $2 billion. And Volkswagen? Volkswagen had p o i s o $15 billion [21]. Meanwhile, in F ance, as o May, 2013, public spending is now a 57% o GDP, while he coun y’s public deb is nea ly 94%, and unemploymen has inc eased 11.5% in he one yea since F ancois Hollande ook o ice. The Eu opean Commission, which has been g an ed new EU powe s o en o ce needed e o ms in membe coun ies, has demanded F ance make adical e o ms o i s bloa ed pensions and employmen laws so as o y o inc ease F ance’s waning compe i i eness. This demand wen hand-in-hand wi h he Commission’s g an ing F ance wo ex a yea s o each i s budge ’s de ici a ge s. “Ou message o F ance is pu ing a g ea accen on s uc u al e o ms ha a e needed” said Jose Manuel Ba oso, head o he Eu opean Commission, he EU’s execu i e body. “Cu ing public spending, es o ing compe i i eness, opening up es ic ed ma ke s, e o ming he ax egime and loosening igh labou ma ke egula ions” con inued Ba oso. This announcemen came on he same day ha he OECD, club o la ge economies based in Pa is called o almos exac ly he same changes o F ance [5]. The IMF issued he same calls o e o ms om F ance wi hin he same week. Hollande's esponse was no one o g a i ude, howe e , o he wo yea s ex ension, a he one o denying ha he EU could ‘dic a e’ o F ance, and implying ha F ance migh ‘hun and peck’ e o m, and a i s own (slow) pace. Howe e , inasmuch as Eu ope’s Commissione o economic and mone a y a ai s, Ollie Rehn has implied ha he will use new EU powe s, such as ines and o he penal ies, o o ce F ance o make needed e o ms, i may jus be mo e emp y e biage om Hollande. Meanwhile, a F ench documen a y ilm abou Hollande, en i led Le Pou oi (The Powe ) has po ayed him as a imid, ine ec ual, hen-pecked weakling, a aid o make decisions, and losing he espec o hose wo king unde him. Hollande’s ecen announcemen ha he Eu oc isis was o e will doub less be gi en all he espec due i s sou ce. Hollande’s app o al a ings a e he lowes in F ance’s his o y, hough pe haps a e Wa e loo Napoleon’s migh ha e been wo se, had hey measu ed such hings in hose days. 60 Conclusion The dynamics o he F ench-Ge man pa ne ship, so impo an o leading he EU, has b oken down, e lec ing he o unes o he Eu o i sel . Was he alliance buil on a ounda ion o sand, jus as he Eu o seems o ha e been? The ama eu ish a emp s o Hollande o show up Angela Me kel simply damaged his c edibili y on he wo ld s age. F ance’s e usal o e o m i s economy is conside ed as po en ially he bigges h ea o he con inuance o he Eu o, so i may p o e ou ha Eu o skep ics will be oas ing Hollande in he u u e. Ye wi h co ec leade ship, acing eali y and ge ing F ance’s own house in o de , he esul s could be d as ically di e en , hough s ill wi h pe haps a ecogni ion om EU leade ship ha he eu o expe imen has caused a mo e damage han i is wo h. Li e a u e [1] ALEXANDER, H.: Why e en Hollande’s backya d says F ance isn’ wo king. 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