As Macron Ascends, Merkel Follows and Trump Descends

That burst of air one felt a few months back was Western Europe breathing a sigh of relief that Marine Le Pen lost in France as centrist Emmanuel Macron came from nowhere to defeat her aspirations.  Now some three months into his presidency, Macron is filling a leadership void in the European Union by articulating a path forward for Europe and bringing Germany along with him.

Mutual distrust between France and Germany have existed for some time.  And for Macron to have any success, he must follow through on difficult economic reforms in France.  Merkel herself faces tough elections in September and should her party prevail, she will still have to convince skeptical conservatives that the future lies with the more centrist Macron.

Europe is emerging from crisis mode with a better-than-anticipated economic forecast as political disarray in Britain and the United States ensues.  It is into this “void” that Macron now steps.  At an EU summit in Brussels, he let it be known that France would not tolerate Hungary and Poland’s lurch to the far right. He promised to respond in kind if China or the US does not play fair on free trade.  And he has proposed closer European cooperation in defense matters.

Since then, Merkel and Macron have agreed to collaborate on a new jet fighter.  They are also coordinating activities with Europe’s Galileo satellite system which provides an alternative to GPS from US satellites.

It was probably the G7 summit in Sicily that broke the camel’s back when it came to US-German relations.  Returning to Munich, Merkel declared that Great Britain and the United States were no longer reliable allies in the defense of Europe.  She singled out the US as out to weaken and undermine the EU.

With Britain’s strategy to exit the EU in shambles and pro-European election results in Holland and France, Merkel has been more forceful in extolling the virtues of union despite the many problems they face, many brought on by Merkel herself.  She sees Trump as trying to keep Europe weak and Trump is hugely unpopular in Germany.  Pulling out of the Paris climate change accords may have been a bridge too far for Merkel.  In short, Berlin is not going to wait for Trump to go away to forge ahead.

While Trump rails against Germany for their trade surplus with the US, Europe realizes they have a huge market should the US engage in protectionist policies: Asia.  Already, trade with Asia exceeds that with the United States by about $300 billion.  Chinese president Xi Jinping visited Berlin to take advantage of the rift between Europe and the US.  His “China first” agenda is certainly more long-term than Trump’s “America first” agenda giving him more flexibility in dealing with Europe.  Additionally, the EU and Japan have reached a general framework for a free trade agreement which stands to drive a wedge between Japan and the United States which is only to the advantage of China.

To illustrate how Germany has changed since the election of Macron, Merkel has generally supported two key Macron suggestions: an EU budget and an EU finance minister.  This furthers centralization in Brussels under the guise of needed reform.

Macron is in a long line of French leaders when it comes to foreign policy- one of independence.  It is based on three tenets: autonomous decision-making, the nuclear deterrent, and skepticism towards American power and European deference to Washington.  Still, he hopes to, ironically, carry on that spirit of independence through the tools of interdependence via the EU.  For example, unlike many other European leaders, particularly in Eastern and Central Europe, he sees the influx of immigrants as a unique opportunity to transform the labor market in France.  While other countries are decrying the changing face of their nations, Macron sees untapped potential.

Macron’s preferred allies are those that France has forged enduring ties with and those that offer France the greatest opportunity to increase its waning power.  This means first and foremost Germany followed by other European nations and hopefully the United States.  But as concerns the US, it will be more on France’s terms.  And given the weakened state of Great Britain, France may take a harder line than Germany in the Brexit negotiations.

It is also a fact that among all the Western European countries, traditional and historical ties with Russia are probably strongest in France.  Although supportive of EU sanctions on Russia, it is no coincidence that Macron met in short order with both Putin and Trump.  Macron may be the one European leader who can possibly help broker an agreement in the Ukraine that would be satisfactory to the EU by changing Russian aggression thus loosening sanctions.  This is not a humanitarian effort by Macron, but an economic one.

As US policy towards Russia remains handcuffed for the foreseeable future, expect Europe, through Macron, to break ranks and re-engage Russia as the economies of both Russia and Europe improve.  Europe will also likely grow frustrated with US confrontation with Iran and break ranks there also as they see greater economic opportunities and markets opening before their eyes.

The remainder of the Eurozone will likely go along.  For Finland, the Baltic states and Slovakia, the outcome looks good as they have proven economic trustworthiness and are in the inner circle of EU decision makers.  The Czech Republic and Sweden (although not in the Eurozone) have good relations with Brussels, Berlin and Paris.  The possible losers may be Hungary and Poland.  The latter has a strong economy which may give it some leverage, but they are not playing with a full hand against the rest of the EU.

Trump went to the G7 in Sicily and NATO summit in Brussels with a strong message that only alienated the true power brokers in European politics- most importantly Germany.  His message had the opposite effect by reducing American influence and handing Macron and Merkel political gifts.  Had Trump gone to Sicily and Brussels and, in effect, called Merkel’s bluff by heaping the usual platitudes about US-German ties and her leadership, today she would be trying to distance herself from an unwelcome embrace by a hugely unpopular US president.

Merkel has seized the high moral ground: the face of the German anti-Trump .  The unease that Germans feel amid geopolitical change works to her advantage as German voters seek stability rather than change.   For Merkel, the only thing standing in her way as the de facto leader of Europe are the aspirations of Emmanuel Macron and his leadership role.  Thus far, she is keeping Macron close.

There are two losers here:  Great Britain and Donald Trump.

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