By Fiona Zumtobel
With soaring unemployment rates, industries
collapsing, government budget deficits roaring and large social unrests the
European Union and its path towards progress is looking extremely grim.
Germany’s Chancellor Angela Merkel and French
President Francois Hollande do not seem to find consensus on how to steer
Europe through these turbulent times. Germany’s strict views on Austerity and
the centricity of the French State, makes a compromise difficult. Europe, nonetheless,
can no longer wait for a compromise and therefore this policy paper will
indicate three possible policies that France and Germany could take in order to
guarantee the safety, survival and success of the European Project.
The
Problems- ‘Vive La Difference’ between Merkel and Hollande
Problem
(I) Personal Relations & Ideology
The relationship
between two countries is often very dependent on the personal relationship that
their presidents have with one another.
The relationship
between Merkel and Hollande, was bound to have had rocky start when Angela
Merkel openly campaigned for former ex president Nicolas Sarzoky, Hollande’s
opponent during the 2012 election. With presidential elections, it is very difficult
to estimate who will win therefore, if you are stuck in a Union with that country
then, it seems only vital to stay neutral during presidential elections. Merkel
prioritized ideology before the strategic friendship between France and Germany
and therefore damaged EU relations.
Furthermore, when
France elects a Socialist government, then it is very difficult to enforce Merkel’s
proposed Austerity .The problem that remains however, how to “socially” fix a problems
when your very own State is highly indebted and in the middle of a severe economic downfall?
Problem (II)
German Economic Success vs French Economic Weakness
Germany’s Economic
success has automatically forced the Chancellor to become both politically and
economically in charge of the European Union. France’s inability to keep up
and, cut budget deficits to the agreed 3% of GDP automatically forces it to
accept its inferiority.
Furthermore,
France is at an unemployment rate of 11% whereas Germany is only at 5%.
Germany’s has a Balance of Trade Surplus in contrast to France’s balance of
trade deficit. All of these are factors that suggest that France is far behind
Germany economically. Economic powers tend to rule World Politics. Examples of
this are Great Britain during industrial revolution, United States after World
War II until present, with an eager China on its way. If Germany is given the
position of a leader, she will also want to dictate policy. Dictating policy
alone is impossible to do when you have 27 other member states that might not
like what you propose.
Problem (III)
Geopolitics Interventionism vs Pacifism
Militarily, France
is much more similar to Great Britain than it is to Germany. The
“interventionist” France as opposed to “pacifist” Germany. The French
intervention in Mali was greatly supported by Great Britain and rather frowned
upon by Germany. On the other hand, if Germany would be interventionist like
she was during WWI and WWI, I am sure that the World and especially, Europe
would be too frightened and cautious to allow Germany to dictate European
politics.
Policy I Labour/ Corporate Tax Reform in France
Policy (I) argues that the only way for German-Franco Relations to improve is if France becomes a stronger economic competitor for Germany. With a strong economic France, Germany will not be able to dictate policy by herself.
Policy (I)
indicates a Labour and Tax Reform Policy, which would enable France to increase
productivity and to cut unemployment rates through the removal of Overtime taxes, which has currently been put into place
since Francois Holland has come to power.
The normal working
week is 35 hours in France. When French citizens decide to work longer, either
because they would like to make more money, or because they need to make more
money to survive, then the French state must embrace these hard workers, rather
than to tax them. When people get taxed on their extra work, then they are
presumably, less likely to work, and with the unemployment benefits that France
offers, rational man might decide not to work at all.
Policy (I) might
increase budget deficits in the short term, but in the long term it will
increase employment rates to the point where Government revenues are higher
from the increased income tax it receives than before with the “overtime” taxes
in place.
In the long run, Policy (I) will
therefore indicate marginal benefits exceeding marginal costs.
Secondly, with a higher working population,
the productivity levels of France could very well correct the balance of trade
deficit.
Policy (I), also
includes a decrease in Corporate taxes so
that Firms in France are able to spend more money and 1) hire more workers and
therefore reduce French unemployment rates, and 2) Increase Firms investment in
technology and innovation to increase both productivity and the quality of
their services. 3) French oversea companies that left France for tax purposes
would re-allocate and produce domestically.
Policy (I)
recognizes that France is under Socialist Rule and that social benefits are
deeply embedded in the French system, therefore, Policy (I) does not discuss
the reduction of Income Taxes, reducing trade union power, increasing the
working week, and loosen the hire/fire process. Policy (I) only hopes to
increase French productivity and increase the working population through mild
tax reductions.
Policy (II) Collective Economics: A Banking Union
Firmly Put Into Place
Talks of a Banking Union are already underway. However, Policy (II) hopes to enforce this Banking Union through a legally binding treaty, where all EU members must sign to enter or remain in the EU.
The idea was that
a single supervisor and a bank-resolution mechanism works for Europe in a way, that
would be better at handling large failing banks. Furthermore, a Banking union
would also control the connection between failed banks, bailouts and budget
deficits. What this Banking Union ultimately means is that countries share the risks of other countries banks
collectively, as one.
In Policy (II) the single Supervisor would be selected in EU parliament,
where each EU member State’s Government would select and send one
representative. The representative with the most votes (A country cannot vote
for his own representative) will carry out the duty and serve for a 2 year
Term. International Lawyers would write up a binding treaty, where all
countries that wish to enter or stay in the EU must sign.
Policy (II) argues that Sovereignty will have to be given up in order for a
Banking Union to properly function. Facts and figures will be completely transparent,
and decisions will not be left to member States. Therefore Policy (II) argues
that member States must give up large chunk of their Sovereignty.
Those nations who wish to stay in the EU because of
this adavantages ie) free movement of goods and peoples , must at same time
bare the burden of the costs that
come with a properly organized and tightly run Union.
Following the cost/benefit analysis on the short term Germany would
probably not want to sign and ratify this treaty. Any strong economic power
would have ist reservations. Policy (II) is a cosmopolital model, which argues
that for the EU to properly function and member states to regard eachother as
equals, Sovereignty must ultimately be given up.
Policy
(III) Educational and Cultural Reforms
Perhaps Tax
Reforms are out of the question for France’s Hollande and A Banking Union
cannot be put in practice by Merkel’s Germany. Therefore this policy paper includes
Policy (III) that hopes to increase Franco-German through the implementation of
Educational and Cultural Reforms that create a bond and sense of unity between
all EU members, without losing cultural heritage.
Policy (III), argues for the Modernization of
Education and Culture through the implementation of yearly educational forums and
cultural events that will pinpoint the individual and collective advantages of
strong European relations.
The educational
forums will be similar to TED in the United States, where brilliant minds come
together, present their ideas and later on debate amongst each other. Observers
will be able to ask questions of their after the debates.
The themes of
these forums will always try to defend the need for European Unity and the
advantages of the European project. Guest speakers will identify the strengths
and weaknesses of the European Union and will suggest diverse methods of
eliminating or reducing European defaults.
The forums will be
organized in European Capitals. Guest speakers will be paid by the European
Commission for Education and Training. The European Commission will allow
students from the EU to post online recommendations of what topics that they
would like to have presented and discussed.
Policy (III) is a
long-term solution to European Unity and in particular better franco-german
relations. Problems will not magically disappear from the table but they will
be brought to light and discussed by professional, where students can eagerly
listen and learn. When you educate people to support European Unity, then
European unity will be become a deeply embedded and important value to these
people, which they will probably want for the rest of their lives.
Policy (III) also
introduces yearly Cultural Art Fairs to support young European artists. The
European Commission of Culture will organize events to promote European
integration in large well-known spaces eg) Grand Palais to attract successful
galleries and clients. Not only does these give business opportunities for our
future generations, but also it also visually educates visitors on the
importance of European integration and the need of a pro-european mindset.
Policy (III)
requires a lot of funding, which will be come directly from member states and
hopefully private donations.
Policy Recommendation
Franco-German
relations are on the brink of collapse. A policy is required to improve
relations not only for both countries individually but for the EU entirely.
This policy paper
introduces three different policies whose aim is to improve European relations,
with the particular focus on Franco-German relations.
Policy (I) will
help strengthen the French domestic economy. With a strong Economic France,
Germany will not be able to dictate policy alone. Also, a Strong French economy
will boost the EU average. Policy (I) is relatively easy to put in place and
does not risk major social unrest or strikes for the French population.
Policy (II) argues
for the implementation of a Banking Union, which is perhaps the most
cosmopolitan theory out of the three proposed. Policy (II) requires
transparency and cooperation. Nations will automatically have to give up more
of their sovereign power. A binding treaty for a Banking Union will be very
difficult to put in place for strong economic powers.
At the moment,
France is strongly pushing for a Banking Union, perhaps because it is not
economically as strong as Germany and thus would not loose as much with this
proposal. However, as soon as France re-builds its domestic economy, this paper
presumes it will be less likely to want to enter into a Banking Union, most
especially if these mean of giving up its proud sovereignty.
Policy (III)
proposes strong EU relations through educational conferences and cultural
events. Policy (III) hopes to enlighten European people, on a psychological/emotional
and rational level of the grave importance and beauty of the European Union.
Policy (III) is a very optimistic model that might one-day experience great
success. However, this policy requires large funds, which is very difficult to
get from in a time of crisis.
To conclude this
policy paper therefore, I would recommend the implementation of Policy (I).
Once the French economy is revived one could perhaps consider investing in
Policy (III) to guarantee strong Franco-German and EU relations for the future
well-being of the Europe as one.
Entradas
