Europe’s motor is humming and not by German diktat

At last a good Franco-British row as we in France and Britain like them. To be clear, this not trivial: why is there so much severe judgment in Britain on France’s economic situation and so much leniency over Britain’s many economic problems? Yet heated as the rhetoric is, we should not allow this row to obscure an important question: is the recent Brussels meeting just another “last chance” (and useless) summit? Or does it portend a new Europe? Against the consensus, I think the latter.

For the first time since the euro’s creation and thanks to the gravity of the financial crisis, monetary union has a chance to be accompanied by a fiscal union, with convergence rules, collective discipline on balanced budgets and mutual surveillance. The task is incomplete, and the agreement will not put an immediate end to the crisis, but it is a step forward. The fact that, with the exception of the UK, all the non-euro countries have been willing to negotiate a new agreement out of fear of being marginalised is an expression of confidence in the single currency and Europe’s future.

So is the European Union, as conventional wisdom has it, under German rule? Some in France have answered the question referring to Bismarck, Munich and other reminiscences. The reality is simpler. Having been deprived for 45 years of the right to have national interests, Germany now defends them with the determination that her economic strength, resulting from courageous reforms, allows her. This is not a putsch but rather a normalisation. The Franco-German proposals on the debt crisis and Europe’s economic governance which led to the Brussels decisions were the result of hard negotiation between Nicolas Sarkozy and Angela Merkel on fiscal discipline and European solidarity, not the imposition of a German diktat. Moreover, if Germany wanted to dominate Europe it would need to offer more than austerity, fiscal discipline and automatic sanctions. It would require the political will and means to take risks in foreign policy, military and security issues, something the German political class might not be willing to go for.

There are also changes in France’s attitude. Anti-European feelings are still vocal and not only on the extreme left and right. But the reality is elsewhere. Little by little, within the political class as well as in the business community, a new consensus is emerging about Europe, the euro’s future, economic governance and the necessity to pool national sovereignties to address the challenges that we are all facing. There is a growing, albeit unspoken, realisation among the French elites that Europe can no longer be a mere extension of French ideas and interests. There is the reluctant acceptance that instead of having more France thanks to Europe, there could be more Europe thanks to France. But there has to be a trade-off: sharing more sovereignty will not be accepted by any French leader if it means converting Europe into a big Switzerland. A wider view of one’s national interests implies the ability to define European interests and the collective willingness to use its considerable leverage – in trade, finance and diplomacy – to defend them.

This means we are far from the apocalyptic predictions about the euro’s collapse. It also means that while the status quo is not viable, nor is an abrupt turn to federalism. For a long time, Europe will be a hybrid animal. On one hand, we will have more economic and fiscal integration; on the other, intergovernmental co-operation, especially in foreign affairs and defence, will prevail. For this system to work we need more relevant and more democratic European institutions, and more collective leadership by governments. It would be difficult to build a strong Europe on weak institutions. Equally, it would be a mistake to build Europe with weak nations.

For this reason, Franco-German co-operation – as necessary and difficult as it may – be will not be sufficient to lead the new Europe and should not preclude the inclusion of others such as Italy, Spain or Poland. This was proposed by President Sarkozy five years ago. Then, however, he included the UK in the group of leading countries, as he was convinced she had a major role to play in Europe.

This is why Britain’s self-exclusion from the deal, while consistent with David Cameron’s choice to satisfy a party caucus, was so ill-advised. The only veto he has cast is against the UK’s influence in European affairs.

What is at stake is not only the well-being of Europe internally. It is its ability to engage with the world as the US wants to be less involved and when challenges are more numerous. This is worth a little effort, not to say a cultural revolution, from all of us. Is it not?

The writer is former French ambassador to the UK and is special adviser to the Blackstone Group