What Schäuble is really saying about Macron and Europe

German Finance Minister Wolfgang Schäuble talked to German weekly Der Spiegel about the election of Emmanuel Macron as French President, and this interview is being widely quoted in the English-language press without benefit of a translation. Having read the article, I would say there is nothing extraordinary in his commentary. None of his positions have changed. Let me explain what he said below.

The mood: Schäuble presents himself as welcoming of Emmanuel Macron in the interview. And this tone can be considered ‘conciliatory’ or ‘constructive’ in the sense that he welcomes a left-of-center politician as French President.

He said:

“Macron will ein stärkeres Europa, genauso wie die Kanzlerin und ich. Es hat mich beeindruckt, dass der neue Präsident nach seinem Wahlsieg zu den Klängen der Europahymne auf die Buhne vor dem Louvre gestiegen ist. Das war ein starkes Symbol.Ganz klar. Macron ist unser Mitstreiter. ”

That translates as “Macron wants a stronger Europe, just like the Chancellor and I. It impressed me that the new president, after his election victory,  took the stage in front of the Louvre to the sound of the ‘Anthem of Europe’. That was a strong symbol. Very clear! Macron is our ally.”

The context: Macron just beat Marine Le Pen, who wants to upend the existing European order. So I don’t see Schäuble’s attitude as surprising.

Schaeuble about Macron

What Schäuble really wants: The very next comment shows us.

“Erst mal will Macron Veränderungen in Frankreich, und dabei unterstützen wir ihn. Macron hat Mut bewiesen, indem er gegen die Mehrheitsmeiunung der sozialistischen Partei einen reform- und europafreundlichen Wahlkampf geführt hat. Nun muss Macron sehen, dass er in der Nationalversammlung für seine Pläne zur Reform des Arbeitsmarktes eine Mehrheit bekommt. Wir alle wünschen, dass er dabei Erfolg hat.”

First off, Macron wants changes in France, and we support him on this. Macron showed courage by opposing the majority of the Socialist Party and running a reformist and European-friendly election campaign. Now Macron must see to it that he gets a majority in the National Assembly for his plans for labour market reforms. We all wish him success on this.

Translation: We in Germany support Macron because he is pro-European. I believe he is not a typical left-winger because he bucked the socialist party with a reform agenda that we support. But [as I say more explicitly later in this interview, and implicitly here], the reforms in France must happen first for there to be a move at the European level.

Conclusion: The people praising Schäuble’s Spiegel interview as constructive aren’t reading him right. His positions haven’t changed. Schäuble says explicitly that Macron has to fix France first before he can tackle his European agenda.”Das ist die richtige Reihenfolge – that is the right sequence.”  Moreover, he says there is no appetite for a European finance minister right now, though he doesn’t reject the idea. This implicitly says German support for treaty- and German-constitution-changing European fixes are dependent on the reform willingness within individual member states.

Bottom line: Germany will not accede to ‘more Europe’ -even within a core – unless and until other European Union member states take on reforms that make their economy more like Germany’s economy. 

Post-script: Schäuble also told Spiegel that, though the German current account surplus is too large right now, German government policies aren’t the reason things are that way and, therefore, German government policy can’t fix things.

About 

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.