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The partnership between Germany and France has dominated the EU over the past decade. Britain’s scheduled exit only strengthens the axis at the core of the continent. Naturally, the leaders of those respective countries in turn dominate European politics. No one more so than German chancellor Angela Merkel. Despite her fragile domestic position, she remains the EU’s most important politician.

Her position, however, is being eclipsed. Philip Stephens argues in his column that Emmanuel Macron is now more important. It is a shock for Germany, which has grown accustomed to setting the EU’s agenda. The French president almost has the stage to himself, having mastered the part of statesman-summiteer. Even if Ms Merkel can piece together another grand coalition and secure her position at home, Philip senses there has been an unmistakable shift.

Mr Macron’s success in Europe, however, will also depend on domestic success. The president will be tested by his capacity to push through domestic reforms. He has begun to modernise France’s labour code but there are still big challenges ahead. Yet the zeitgeist suggests whatever happens, it is France, not Germany, that is embracing the future and pushing forward European reform.

Thumbs down for nationalisation
Martin Wolf argues that bringing public utilities back into public ownership is the wrong answer to a pertinent question. What is needed instead is reform of the structures of regulation.

Deneuve and MeToo
Anne-Sylvaine Chassany looks at the worldwide backlash against the 100 French stars who signed a letter against the #MeToo “puritans” and says criticism is growing at home too. France might be waking up to the notion of sexual harassment. 

Watch bonds, not equities
Gillian Tett thinks the bond market is a better indicator of the health of the global economy than equities. The question, she says, is whether the return to normal interest rates can be achieved without tipping markets into a tailspin.

Best of the rest

Psychiatrists With Press Passes — Karl Rove in the Wall Street Journal

Nigel Farage’s referendum call should be greeted with caution — James Forsyth in The Spectator

Inside Steve Bannon’s ‘Fight Club’ — Kurt Bardella in The New York Times

Staying in the EU customs union after Brexit would be disastrous for Britain — Henry Newman in The Guardian

What the Iran Protests Were Not — Vali Nasr in The Atlantic

What you’ve been saying

Formidable Oprah could match Trump— letter from Paul Bloustein, Cincinnati, OH, US

“Dear Sir, The world of entertainment is the best breeding ground for politics, and I am happy that Oprah Winfrey is being talked about as a possible 2020 Democratic presidential contender ( “The temptation of Oprah Winfrey”, January 8). As a poised woman of colour, she fills more than a few attractive categories for the average postmodern progressive. As for early potential opponents, she out-glitzes pale Queen Elizabeth of Baystate (Senator Elizabeth Warren of Massachusetts), out-friendlies ol’ RBS (Rantin’ Bernie Sanders), has yet to show the fabulist tendencies of former vice-president Joe Biden and is better known than a host of other dreamers. She would be a formidable candidate and could match Donald the Disrupter dollar for dollar. But out-Trump the Trumpster? Out-Trump the man who developed political Trumping? Even I might tune in to that debate.”

Comment by Legal Tender on Brooke Masters new column, Citi’s travails come at a critical time for the banking industry

“There was no $45bn bailout of Citi. More correct to say the Fed backstopped a pool of assets in their lending portfolio (and also BoA’s) in a special arrangement (larger than $45bn in potential taxpayer exposure, I believe) and Citi also took Tarp funds. Unlike in the UK or Ireland, all funds were repaid at a large profit to the Fed (backstop) and to the taxpayer (Tarp). Your European readers may be confused in thinking a $45bn bailout meant expense to taxpayers or the CB — it did not. They profited.”

Keep Iraq in mind when urging strikes on N Korea— letter from Guy Wroble, Denver, CO, US

“Dear Sir, How quickly the memory fades. Those urging “pre-emptive” military action by the US against North Korea should be required to explain how well this worked in Iraq in 2003 (The Big Read, January 10) . And in case they need additional information to focus their thoughts, when Iraq was invaded it possessed neither nuclear weapons nor the means to deliver them.”

Today’s opinion

Re-nationalising utilities is the wrong answer to a real question Shifting ownership would not solve the problems facing the rail and utility industries

Watch the bond market, not equities Governments and leveraged borrowers would suffer if interest rates rise quickly

Catherine Deneuve’s star turn rattles #MeToo ’puritans’ Letter signed by 100 French women has prompted outrage on both sides of the Atlantic

FT Alphaville: Today in #WOKE markets

Gallery crowds are killing the joys of visual culture It would be better for everyone if there were fewer visitors and silence was expected

Free Lunch: From optimism to pessimism on the global economy Do not underestimate the economy’s unused potential

Instant Insight: Dialogue spurs possible easing of Korean tensions Tentative talks between North and South could give the US a chance to climb down

The Big Read: Yemen: Trapped in crossfire of regional power struggle Fears are rising that the humanitarian crisis will worsen amid fighting between Saudi Arabia and Iran-backed forces

Instant Insight: May’s reshuffle shows diversity and equality are not priorities Personnel changes are hampering the government’s gender pay gap initiative

Now Angela Merkel steps into Emmanuel Macron’s shadow Berlin was used to writing the EU’s agenda, but currently Paris has the stage to itself

FT View

FT View: May’s plan for a green and pleasant Brexit A 25-year strategy for the environment is short on concrete action

FT View: A simple story about a complex bond market It is a little too easy to believe that the long bull market is finally over

The Big Read

The Big Read: Yemen: Trapped in crossfire of regional power struggle Fears are rising that the humanitarian crisis will worsen amid fighting between Saudi Arabia and Iran-backed forces

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