Photo Gallery: Bridgebuilders in Berlin and Paris
Merkozy's Men Advisers Seek to Bridge Euro Differences
The most important telephone relationship between Germany and France connects two level-headed men in two offices that couldn't be any more different from each other. One is small and sparsely furnished and sits on the third floor of the Chancellery in Berlin. The other is huge, looks like the setting for a period film and is located on the second floor of Paris's Elysée Palace.
In recent months, the men have spoken on the phone almost every day, regardless whether the euro zone appeared like it was just about to be saved or on the verge of breaking apart, whether the markets were going haywire or had briefly quieted down. Over time, the two have gotten to know each other better. More than anything, though, they have learned to trust each other. For Europe, that has been the crucial factor.
In public, it has been German Chancellor Angela Merkel and French President Nicolas Sarkozy who have been charting the course for the Continent. Indeed, they have morphed into what the media here have dubbed "Merkozy," Europe's oddball ruler. But since the two have their own countries to lead, they can't afford to speak about where things stand in the battle to save their shared currency on a daily basis. It is Nikolaus Meyer-Landrut and Xavier Musca, Merkel and Sarkozy's respective go-to guys for the euro, who speak on the phone in their stead.
Only a few people are familiar with their names -- and both would actually prefer to see things stay that way. They did not want to be cited in this article because they do what they do best away from the public eye. Indeed, the basis of their collaboration is the understanding that what they say to each other will never be leaked.
The Eye of the Storm
Nikolaus Meyer-Landrut, the German, heads the European Division of the Chancellery, where he serves as Merkel's most important adviser on European policies. Previously, he spent several years at the Foreign Ministry, where he was also in charge of a similar European affairs portfolio. His uncle Andreas Meyer-Landrut was also a diplomat, and Lena, the German singer who won the 2010 Eurovision Song Contest, is his cousin's daughter.
Xavier Musca, the Frenchman, is secretary general of Elysée Palace, the office of the French president. He is Sarkozy's chief of staff; and as his most important adviser on economic issues, he is even more powerful than France's finance minister. Sarkozy and Musca have known each other since 1979, when they became friends in college. Musca hails from Vico, a village on the island of Corsica, as does Sarkozy's first wife, Marie-Dominique Culioli. He served as the best man in their wedding, and is one of the few at Elysée Palace who are allowed to address Sarkozy informally.
Musca's office is very quiet, and the only thing one hears is a clock ticking on the wall. Outside, the financial markets are running wild, and politicians are roaring. But Musca is in the eye of the storm. An assistant only occasionally enters the office carrying a folded note in her hand. The adviser's Elysée Palace working space is enormous, with ceilings five meters (16 feet) high, and it sits adjacent to Sarkozy's very own chambers. Everything here -- whether it be the furniture, the mirrors or the paintings in the styles of centuries past -- tells a story of power, of former kings and imperial grandeur.
Ironically enough, European politicians have a problem with power at the moment. This is because no one can say for sure just how much of it they have left. Musca is a financial expert. As such, he understands perfectly well how the markets work and why an investor from Singapore, for example, has sold his Italian bonds. However, the job of a politician is not only to understand the markets, but also to see to it that the investor from Singapore starts buying those bonds again. That, of course, is a much greater challenge.
Reconciling Two Worldviews
This is the problem that Musca and Meyer-Landrut have been working on for months now. During the crisis, the Germans and the French have once again discovered just how different they are and just how differently they view the world.
The French saw an approaching catastrophe, the danger of contagion and the threat of the euro crisis spilling over across the entire euro zone. They saw a fire and wanted to call the fire department -- in other words, the European Central Bank (ECB) -- to put it out and to pump fresh money into the system. They viewed euro bonds, for which all of the 17 euro-zone states would be jointly liable, as an alternative.
The Germans hold little to no regard for either idea. Euro bonds would make all states collectively liable for the debts of individual states, and that's not a move Berlin has supported. Likewise, the Germans perceived the danger of the crisis spilling over into other countries as being smaller than the French did. They wanted to combat the crisis at the root level, and they believed that the euro zone would only win back trust if the countries that are part of it were to stop living beyond their means.
The German stance often left the French in a state of perplexity. As they saw it, the house was burning, but the Germans only wanted to talk about why the euro zone's method of construction makes it so flammable. The Germans also fended off one French proposal after the other. As they saw it, they would have only given the false semblance of solving the crisis and they would have further weakened the euro zone.
These are the issues that Musca and Meyer-Landrut have been discussing. Of course, one shouldn't imagine them as being involved in endless negotiations. Instead, the two are often merely trying to better understand the other side's position and to explain their own stances.
Meyer-Landrut and Musca are both 51. The former was trained in Germany's foreign service, while the latter graduated from the Paris Institute of Political Studies (Sciences Po) and the Ecole Nationale d'Administation (ENA), two elite French universities. Both exude the sense of correctness characteristic of all good civil servants. In this sense, they are much more similar to each other than their bosses are, and it is likewise often easier for them to reach a common position.
Indeed, the exact relationship between Merkel and Sarkozy has remained enigmatic. At first, they seemed distant and had a difficult relationship. She was the dry, cautious German. He was the emotional, hyperactive Frenchman. She didn't like his posturing or how he touched her when they talked. He didn't understand her hesitant stance, and he didn't know -- or even care to know -- much about Germany. Instead, he looked to America as his model.
Still, for the last three years, this unlikely duo has been condemned to work together. Over time, something has changed in their relationship as well. They have found a way to deal with each other, even if it is just being able to speak their mind on things, like expressing what they want, what they can accept and what they cannot. Over the course of their conversations, they have discovered that neither leader likes to beat around the bush when it comes to discussing the issues.
Indeed, this is probably the most salient feature of German-French relations in the age of the euro crisis. In the place of a classic and formulaically affirmed friendship between the countries -- like the one shared by former French and German leaders François Mitterrand and Helmut Kohl, who famously held hands in 1984 while visiting a World War I military cemetery in Verdun -- a complicated working relationship has emerged in which there is no room for flowery language because too much is happening too quickly in the outside world. Musca and Meyer-Landrut stand right at the center of this relationship.
A Francophone German and Sarkozy's 'Germanest' Colleague
Instead of speaking with each other like diplomats, the two talk like people working on the same issues from two capital cities, and they try to understand what's going on in the world and on the markets. They ask each other: What just happened there? How can we resolve it? Do you have any ideas?
When they speak, they do so in French. Meyer-Landrut is fluent in the language, his wife is French and his doctoral thesis was entitled "France and German Unification." This has helped him to understand his counterpart better and to capture subtleties that would be lost were they to speak English. In other words, you could say that Meyer-Landrut is somebody who "gets" the French. Likewise, in France, Musca has a reputation for being Sarkozy's "Germanest" colleague.
In this respect, the two serve as something akin to translators between their two very different cultures. On the one side, you have France with its president, who is actually more like an elected king who is free to decide almost whatever he wants without the government, the parliament or the judiciary being able to prevent him from doing so. On the other side, you have Germany with its chancellor, who rules as part of a complicated government coalition, as well as with a powerful parliament and a strong-willed Federal Constitutional Court.
A Differing Relationship to National Debt
Still, it's not just their political systems that set the countries apart; it's also their relationship to national debt. In the past, the French were accustomed to using debt to stimulate economic growth. Of course, the Germans have also taken on debt, but they would prefer to have the state steer clear of economic intervention. In fact, they have even come up with a word for this: Ordnungspolitik, or the idea that the government should create the regulatory framework needed to promote free competition and allow market forces to flourish in a socially responsible way, but not more. It is the basic principle behind the country's model for a social market economy.
Musca can even pronounce this word in perfect German. As an orthodox financial policy man, he believes it is best for a country to have its budget under control. Three years ago, when Sarkozy conferred upon him the medal of the Légion d'honneur, France's highest civilian honor, he said to Musca: "Whenever Merkel sees me, she is agitated. Whenever she sees you, she is calm." Although the line was intended as a joke, it still holds true.
After becoming president in May 2007, Sarkozy initially continued the French tradition of borrowing. Musca reportedly criticized the president for that policy at the time. He also became the driving force behind France's decision to approve two austerity packages after the euro crisis erupted. These were the first steps that suggested to the Germans that change was afoot in France.
Musca's position in the Elysée Palace is somewhat more senior than the one Meyer-Landrut holds in the Chancellery, where Musca's natural counterpart would be Merkel's chief of staff, Ronald Pofalla. But ever since Gerhard Schröder -- Germany Social Democratic chancellor from 1998 to 2005 -- created the office of the European policy adviser, the person holding that position has been in charge of shaping Germany's EU policies.
Meyer-Landrut's office in the north wing of the Chancellery, which runs along the Spree River in Berlin, shares nothing of the glamour characterizing Musca's chambers. He has a shelving unit, a desk and a conference table. Nor is the office very large. It is a room designed for working. The Germans are deliberately understated, and they prefer to speak that way on the world stage, as well. That's how it had always been in the Federal Republic of Germany.
Germans Realize They Must Lead
In the past, the Germans usually ceded the leadership role in Europe to the French. Or at least they tried to create that perception -- for historical reasons. Even Meyer-Landrut used to hold the conviction that Germans needed to act with restraint in Europe. But he has since changed his mind. This allocation of roles has lost its validity since matters have started encroaching on the very foundation of German prosperity. The Germans have come to the realization that they have no choice but to lead.
Indeed, the Germans have been increasingly firm about the positions they take. Of course, this wasn't easy for the French to accept, but Sarkozy chose the smartest possible tactic: He tied himself to the Merkel mast, became her comrade-in-arms in the battle for budgetary discipline in Europe and proclaimed the "German model" worthy of imitation.
For their part, the Germans have budged a bit as well. For example, they have allowed themselves to be convinced that there can no longer be a common currency without greater fiscal policy coordination between euro-zone member states. Likewise, in the battle over the European Central Bank, Merkel and Sarkozy have found a magic formula in the phrase: "The ECB is independent." Both no longer make any public statements about what the ECB is or isn't allowed to do. This enables Merkel to acquiesce to things she doesn't officially endorse.
Meanwhile, the ECB is increasingly behaving like the fire department that Musca and the French have desired. For example, shortly before Christmas, it made almost a half-trillion euros in freshly created money available to banks in Europe that had largely ceased lending to each other, threatening to create another credit crunch. The banks also meant to use the money to buy government bonds. Although that doesn't entail the ECB doing the buying itself, it is more or less tantamount to the same thing. The decision raised more hope on the markets than all of Merkel and Sarkozy's emergency summit meetings.
From the outside, it is admittedly exhausting to follow how slowly the two have been tackling the crisis. Viewed from behind the scenes, however, things couldn't be going faster. Germany and France have had to negotiate how the EU treaties could be newly interpreted, which involved having to find a new solution to a new problem every day.
Until the agreement reached in Brussels in early December, it was necessary to take many small steps, including telephone calls between Musca and Meyer-Landrut as well as meetings between Merkel and Sarkozy. No one can say whether the additions to the treaties that they have agreed upon will suffice, and there are many more meetings to come for everyone involved.
Still, Musca and Meyer-Landrut share the same goal. They want investors -- whether they are in Frankfurt, Paris or Singapore -- to start buying the sovereign bonds of European states again. It's one of the most complicated tasks in the entire history of economic policymaking, and the EU's future depends on whether the governments in Europe can find a way to accomplish it.
Until that happens, the two men will continue working in their dissimilar offices, though still chained to each other -- just like Germany and France and Merkel and Sarkozy.
