Meet the (divided) committee to save Europe

By  MATTHEW KARNITSCHNIG , NICHOLAS VINOCUR  and JACOPO BARIGAZZI

Germany, France and Italy hold starkly different visions. Finding common ground won’t be easy.

BERLIN — To appreciate how unprepared Europe’s leaders were for the outcome of the U.K. referendum, look no further than the past 48 hours.

Europe’s de facto leader didn’t hop a plane to Brussels or Paris for high-level deliberations over the bloc’s long-prepared contingency plan (i.e. the one that doesn’t exist).

Instead, Angela Merkel stayed closer to home, in Potsdam, just a short drive from Berlin. On Saturday, the German chancellor met with the Bavarian wingof her conservative alliance to bury the hatchet after months of discord over the refugee crisis.

A few miles down the road in Berlin, her Social Democrat foreign minister, Frank-Walter Steinmeier, hosted a meeting of his counterparts from the other founding EU member countries. After touring the bucolic grounds of the foreign ministry’s guesthouse, the six ministers discussed an initiative hashed out between Paris and Steinmeier’s office over how to pursue closer political union post-Brexit.

It turned out that what sounded like a bonafide plan, with detailed proposals for deeper cooperation across a range of areas, wasn’t one. Merkel’s people let it be known she hadn’t endorsed the Franco-German paper. Resembling a Socialist wish list, it calls, among other things, for steps toward a common budget with France and Germany leading a push “in the direction of political union in Europe.”

Several of the 21 other EU members not invited to the Steinmeier meeting, meanwhile, were angry they weren’t included in Steinmeier’s party.

“Meeting of the foreign ministers of six founding states sends out the wrong message,” Alexander Stubb, the former Finnish prime minister, tweeted.

Within hours of the Brexit vote, Europe’s leaders appeared at pains to confirm the Leave camp’s portrait of the EU as hopelessly divided and dysfunctional. After divisive debates over austerity and refugees in recent years, Brexit is quickly shaping up as the latest intractable issue to confront the EU.

On Monday, Merkel will host French President François Hollande and Italian Premier Matteo Renzi in Berlin to prepare for this week’s Brussels summit and discuss the way forward.

So far, the triumverate of what will be the largest remaining EU countries looks nothing like a Committee to Save Europe.

Not only do they have starkly different visions for what Europe should look like, Germany’s economic and political weight makes the trio so lopsided that finding common ground will be difficult.

Little agreement, not even on timing

Instead of a plan, the three are likely to offer reassurance that Europe is not on the verge of collapse as well as encouragement for the remaining 27 to work together and strengthen the union.

But so far, Europe’s leaders can’t even agree on when the UK should file the divorce papers. While Steinmeier and his guests, along with Jean-Claude Juncker and other Brussels officials, demanded the UK trigger the EU’s exit clause immediately, Merkel urged patience. There was no need to get “nasty” with the Brits, she insisted on Saturday.

That may be because Merkel’s camp, encouraged by the backlash to the vote in the UK, is holding out hope that London won’t go through with Brexit.

“London should have the possibility to reconsider the consequences of an exit,” Peter Altmaier, Merkel’s chief of staff, said on Sunday.

Unlike Hollande, Merkel is not a believer in a highly-centralized federal Europe and is in no rush to pursue a major overhaul of the bloc’s structures. She does not want to use the Brexit crisis to pursue a great leap forward in European integration and sees little scope to do so.

Instead, she advocates working within the present framework to find pragmatic solutions to issues such as the security threat, migration and youth unemployment. Europe’s remaining members are simply too divided to agree on a substantial reform in the short term, Merkel’s adviser say.

“The unanimous consensus we would need to reform Europe’s basic principles is unlikely to be achieved in the short term,” Altmaier told German radio over the weekend. “So instead of waiting years for that opportunity we should act now to address the concrete issues that interest people.”

Merkel is also in no rush to punish the U.K. for leaving. She’s more concerned about finding a way to limit the economic damage. The U.K. is the largest single market for German autos. German companies employ nearly 400,000 people in the country. Just hours after the referendum result came in, Germany’s business lobby began pushing for a compromise to grant the U.K. continued access to the common market. At his meeting with Merkel on Saturday, Bavarian premier Horst Seehofer repeated those calls, reminding the chancellor that the U.K. is his state’s second-largest trading partner after the U.S.

Hollande’s weakness

French Europhiles, meanwhile, see Britain’s departure from the EU as a golden opportunity to advance their federalist dream, led by a Franco-German couple unshackled from Euroskeptic Britain.

Hollande insisted Europe needed to change profoundly. France is determined to use Brexit to push its vision of EU reform including political leadership in the form of a eurozone finance minister and a common budget. It’s a solution that would revive France’s political clout on the European stage while diluting Germany’s economic dominance.

Instead, they’re likely to get another lukewarm compromise between French idealism and German rule-based incrementalism.

Aware of Hollande’s extreme political weakness at home, Merkel called in Renzi to give more robustness to any consensus.

While France and Italy are temperamentally more in tune, there is little reason to believe they will try to build a common front against Germany. Hollande, unlike his Prime Minister Manuel Valls, has little direct rapport with his younger Italian counterpart. Further separating Paris and Rome is a history of failed joint attempts to pull Europe’s center of gravity further south and ease austerity.

As a French finance ministry official involved in EU discussions said: “With the Italians, things always start well. There is lots of enthusiasm. And that’s as a far as it goes. In the end, we always turn to Germany. Because while moving ahead in tiny steps is annoying, it’s better than no movement at all. We have to live with the Franco-German relationship that we have, even if it isn’t ideal.”

If history has nominated Merkel and Hollande to work together on Europe’s future, it could not have picked more reluctant partners. Politically, they hail from opposing traditions. They lack any personal chemistry — Hollande’s quick wit and Parisian légèreté (lightness) in all circumstances had little effect on Merkel.

From day one, when Hollande flew to Berlin hours after his election with the difficult mandate of getting Merkel to change course on EU policy, they failed to establish a rapport. Hollande tried to charm the German leader. Merkel lectured her guest. In what might have been an honest mistake or sly psychological tactic, dining staff served the French leader asparagus — his most-hated dish.

After that, Hollande gave up trying to cajole Merkel into reforming the EU. During the Greek crisis, he did his best not to contradict her in public, then slid into a more comfortable role: that of Greece’s sympathetic mediator and protector. That played well to the leftist crowd at home but did nothing to advance integration.

Renzi sits at adult table

As for Renzi, the Italian leader is said to just be happy to have received an invitation Berlin meeting. Rome has long complained that it doesn’t have a seat at the EU’s adult table.

“For the first time Italy was called in the direttorio, a sign that in a moment like this Merkel has realized that the Franco-German axis is not sufficient,” wrote Corriere della Sera.

At a meeting with Hollande in Paris on Saturday, the two leaders discussed the economy, security and migration. Both men would like to see less austerity in their budgets. Hollande faces a difficult election next year and Renzi a referendum in October on a constitutional reform. Both votes are crucial for their political survival.

Yet Merkel, who is likely to lead her party’s reelection effort in 2017 is unwilling to weaken Berlin’s stance on budget discipline and will resist attempts to even discuss loosening the EU’s fiscal rules.

With no grand plan in the offing, leaders are expected to stress at the Brussels summit on Tuesday that there is no legal vacuum regarding the U.K.’s status and they are determined to work together toward a long-term solution. Their immediate priority will be to calm investors, who have been unnerved by the Brexit vote and the lack of clarity over the U.K.’s future status.

“What is important is to send a clear message that the EU is in control of the situation,” a senior EU official said.

While the leaders may endorse some elements of the Franco-German document discussed in Berlin, the idea of a multi-speed Europe is not expected to be in any document, a senior diplomat said.

On the question of trying to craft another solution to keep Britain in he replied: “It will depend on Cameron, but we are fed up with the Brits, that’s clear.”

Original