Tuesday, May 2, 2017

Sigmar Gabriel Backs Macron, Calls for an End to "Financial Orthodoxy"

I have been saying for a while now that the best reason to vote for Macron is that he will alleviate German fears about France's unreliability as a European partner. Sigmar Gabriel's op-ed in today's Le Monde makes it clear that he supports this view:

Emmanuel Macron a raison : l’Allemagne doit en finir avec l’orthodoxie financière qui, en ces temps de taux d’intérêt négatifs, contribue plutôt à favoriser le retard des investissements qu’à moderniser notre pays. Une telle politique est néfaste non seulement pour l’Europe, mais aussi pour les Allemands qui devront payer cher lorsque les taux d’intérêt augmenteront à nouveau et que le retard des investissements se sera davantage creusé.

Nous autres, Allemands, devons enfin cesser de raconter des histoires mensongères sur l’Europe. En Allemagne, le monde politique, les médias et, en partie, le monde de l’entreprise ne cessent de clamer que notre pays est la « bête de somme » de l’Union européenne. En vérité, l’Allemagne n’est pas un « contributeur net », mais bien un « bénéficiaire net ». Car 60 % de nos exportations vont en Union européenne. Ce n’est donc que si toute l’Europe se porte bien que les Allemands vont bien également. Si les autres Européens vont mal, l’Allemagne elle aussi souffrira, à terme, de chômage.


bert said...

I have three reservations. First, despite his long service at the top of his party, in January Sigmar Gabriel was deemed too useless and too unpopular to be the SPD's Chancellor candidate. That was the same decision they'd reached about him a few years previously prior to last general election. Second, in February Germany had a minor freakout about some bad inflation figures, leading to widespread calls for a rise in interest rates. Third, Keynes has always been a tough sell across the Rhine. An op-ed in French in Le Monde is not the ideal place to make your pitch if your main purpose is to change opinion in Germany. The purpose is to shift votes in France, clearly (and if Macron's on his game he'll use it on Wednesday night).

That said even if this is a straw in the wind, it's meaningful on some level.
Maybe place it alongside the FT interview from a week or so back which had Schulz sounding very orthodox.

As for German views of French reliability under Macron, I think we shouldn't expect to see anyone out on a limb until the parliamentary vote is done in June, at the earliest. Thereafter, I'm a tiny bit less inclined to rule out movement on their part. I'd originally assumed that a vote for the status quo would be an excuse to carry on as normal. But the threat of MLP '22 is being discussed. Whether it concentrates minds beyond the short term, we'll see.

bernard said...

Although it's off subject by now, I can't resist recommending the article below on Honest Fillon, which will demonstrate to all that it's still about the cash, silly:


Positively hilarious.

Mitch Guthman said...


I’ve only given this a quick glance so far. It’s quite possible that I’ve missed some important points. The thinking here is basically a variation on the underpants gnome theory of business: Tell the Germans that you’re basically happy with “l’orthodoxie financière” but would they mind doing something a bit different to help out France—and at the same time assuring them mightily there won’t be an adverse consequence if they don’t. Then, something happens. And, voilà, Germany will change its core economic policies to better suit the French.

This is essentially the logic of François Hollande’s abandonment of his 2012 campaign manifesto, which has gotten him exactly nowhere. Indeed, there was many a similar paean penned as Hollande transformed himself into a reliable supporter of Germany, yet he was somehow unable to persuade them to change what they regard as essential pillars of German prosperity. Quelle surprise ! The problem, it seems to me, is that if the French president is sufficiently reassuring and supportive, he or she removes any incentive on the part of Germany to change.

Whether you agree with them or not, the essential logic of Hollande’s 2012 position or even the more extreme positions of Mélenchon and MLP makes a lot more sense in terms of how a meaningful negotiation takes place. Yes, Macron has been critical of German policy and would like it to change. But the policies criticized by Macron have lead to considerable, sustained German prosperity and without the threat of a damaging response by France that will "concentrate the mind, the domestic political logic of keeping those policies unchanged is unassailable.

It seems to me that Gabriel has it exactly backwards. The more reassuring Macron is to Germany, the less likely it is that the Germans will abandon l’orthodoxie financière. As Al Capone said: “You can get much farther with a kind word and a gun than you can with a kind word alone.”

Sophie said...

Interesting that the other oped next to Gabriel's calling for a Macron vote for positive reasons was from... Varoufakis!

bert said...

Mitch, you caught me easing up a touch on my Macron-scepticism.
Art's excerpt was only about domestic reflation. Elsewhere in the op-ed there was hazy talk of a ten-year programme of fiscal coordination. I'm not sure it amounts to much. Wolfgang Munchau suggests Macron should concentrate on banking union, and soft-pedal the rest of the eurozone agenda: https://www.ft.com/content/c9fe390a-2c02-11e7-bc4b-5528796fe35c
Can Macron rely on the kindness of strangers?

Mitch Guthman said...


Setting the election to one side, the problem with Macron’s strategy (and Gabriel’s) is that it’s been tried twice before and it failed miserably both times. Sarkozy famously hitched his star to Merkel and Hollande abandoned his implied strategy of extracting concessions by building a center-left coalition to reduce German influence in EU institutions.

At times, Hollande has seemed more like a provincial governor rather than the president of France. And what has this gotten him? Exactly nothing. Everything that Macron’s saying now, Hollande said then and he embraced austerity and even supply side economics to a surprising extent. Again, Hollande followed Gabriel’s strategy for all but the first two months of his presidency and German has not budged an inch.

So, no, Macron can’t rely on the kindness of strangers.

Anonymous said...

What's the gnome underpants theory?

Anonymous said...

I would share Art's confidence if the article was by Schäuble. The SDP appear to be losing. Even if they were to win, and govern without another grand coalition, there is no political will in Germany to make concessions on the Eurozone debt, interest rates or fiscal policy. I fear Mitch is right: Germany will change its Eurozone policy only under pressure. Vague expressions of goodwill from the German left amount to little.

Mitch Guthman said...

Underpants Gnomes Theory

Originally from the animated series South Park, this term came about in an episode about corporate America. The gnomes' plan had three steps:

Step 1: Gather underpants
Step 2: (long pause or silence)
Step 3: Profit!


Mitch Guthman said...

And the actual clips that started it all:


Anonymous said...

In fact the more I think about it the less I am moved by this editorial: if this is the reed upon which Art Goldhammer's confidence in Macron hangs it is very thin! Le Pen disgusts me and I continue to support Macron faute de mieux (as I put it in an earlier comment), but I have little faith in Macron's ability to change Germany's fiscal orthodoxy. Of course he is ideally placed to really bang on the table, if he develops an appetite for doing so: if even docile Macron insists on this or that concessions from Germany, the Germans may feel obliged to grant it. This is Wolfgang Munchau's hope and I guess that it is mine as well, faute de mieux.

Michael Wells said...

This blog has got to be one of the best things about the French presidential election. Where else would one learn about the Gnome Underpants Theory? Perhaps this explains the success of https://www.leslipfrancais.fr/

Lapinot said...


'As Al Capone said: “You can get much farther with a kind word and a gun than you can with a kind word alone.”'

But perhaps in this metaphor Le Pen is the gun.

As for worries that Macron might be too acquiescent to German demands, remember that Varoufakis says that he was 'the only one who tried to help Greece'. He didn't get his way then but then he wasn't the president. Perhaps as president he won't get his way, either, but it doesn't point to someone who is going to be Germany's stooge.

Art Goldhammer said...

Anonymous 8:06 PM: Schäuble endorsed Macron some time ago. So did Gabriel, but he's reiterating it in Le Monde. Merkel is also positive. Schulz officially endorsed Hamon (he had to because he is part of a European network of socialist parties), but he has worked closely with Macron and says positive things about him. My hope may be hanging by a slender reed, but I think Europe's future depends on fostering such cooperation.

Anonymous said...

The EU is a confederation which operates largely through the consensus of its biggest, most powerful members: Germany and France, with the UK occasionally deigning to participate (now with Brexit, they have apparently decided not to).

In the US, we tried such a scheme twice: once with the Articles of Confederation government, which lasted eight years, then with the Confederate States, which lasted just four, In both cases, it proved unworkable. A true federal structure, with a clear delineation of federal and state powers, and a strong, democratically elected central government, became necessary.

The European Union has lasted twenty-four years. The amazing thing is how such a contraption managed to survive this long without developing a genuine federal structure. Yes, the EU has slowly evolved certain features of a federation, but the fact is that decisions are ultimately made by consensus among the three biggest countries, with an outsized role going to Germany. But as we know from ancient Rome, triumvirates are unstable things. Especially when one member of the triumvirate leaves. Then it becomes a power struggle between the two remaining members. And that appears to be exactly what's happening.

The era of Franco-German consensus is over: three of the top four candidates in the first round of the French election advocated a more assertive role for France in the EU, and less deference to Germany. 60.89% of the first-round electorate voted for one of those three candidates. That is something that Macron will have taken heed of, smart politician that he is. No wonder he recently said that the EU had to reform or risk a Frexit.

Confederations do not usually become federations without some major existential crisis that forces greater unity and the development of a federal structure. The combination of Brexit and Présidente Le Pen, which would represent a final rupture between UK, France, and Germany, might well do the trick.

Macron is by far the better choice (indeed, the only responsible choice), simply because he is not a fascist and Le Pen is. But I would agree with Mitch and others that there would probably be little meaningful reform in the EU if he were elected. Things would probably just drift for a few more years, and then when the crash came, it would be that much worse for being deferred.

If Le Pen wins now, there is little chance of her having the legislative majority she needs to turn France into a fascist dictatorship. Whereas if things were postponed until 2022, most likely all the other parties would be totally discredited, the FN would surge into power with a big legislative majority, with Marion Márechal-Le Pen, who is even crazier and more out of touch with reality than her aunt, at the helm.

The impression I have from this election campaign is that France is so deeply divided as to be on the brink of civil war; and this is just a microcosm reflecting the division within the EU at large. The level of tension and the yawning chasm between the parties (just read the accounts of the Brexit dinner between May and Juncker to see how far apart the two sides are) is too great to be resolved without some kind of catastrophic collapse.