The days of the the Franco-German stitch-up are over

Angela Merkel, left, and François Hollande are politically opposed. Photo: Reuters

It’s hard to remember now, but in the not very distant past the leaders of France and Germany would get together on the eve of each European Summit and agree a common position on the issue of the day.

A few hours later everyone else was expected to simply fall into line.

It was a stitch-up of spectacular proportions, but they got away with it because almost everyone else thought the Franco-German ‘motor’ was a necessary evil to get things done in the EU, and the ones who didn't (the UK) lacked the allies to do anything about it. Those were the days.

There’s been no stitch-up this time. Not even a meeting.

The Franco-German motor is belching black smoke and leaving a trail of oil as it grinds noisily to a halt.

Angela Merkel and François Hollande are about as far apart as it’s possible to be on how to fix the Euro’s problems.

They agree the Euro must be saved, and that saving it means keeping Greece on board, but that’s as far as it goes.

In essence it’s all about how to use German cash to keep the whole structure afloat, what’s now being euphemistically described as ‘solidarity’. They both want it, but cannot agree on what Germany should get in return.

Chancellor Merkel wants to be able to control member states’ national budgets directly from Brussels (OK, directly from Berlin, but through Brussels). This is anathema to the French.

Berlin doesn’t want to start guaranteeing the debts of other Eurozone members, but is now talking about creating a ‘fund’ financed by a Financial Transaction Tax that could move money around the zone when needed.

Paris is still demanding full-scale ‘Eurobonds’ that would mean everyone’s borrowings effectively being added to Germany’s overdraft.

President Hollande insists that it’s not just Germany picking up the tab for the crisis in Southern Europe, because France is also contributing to the bail-outs and must therefore have a voice.

He has a point, but everyone knows that France is not in good shape, facing huge budget cuts and an imminent recession, and may soon be asking for help itself.

So when Hollande demands - as he’s likely to at this summit - European banking union before the end of the year, he is going to get short shrift.

The bad news for David Cameron in all this is that the French have also come down firmly against a new European treaty that would drive the process of political integration.

In an interview with the Guardian this week he said, “If I remember rightly we tried that formula in 2005 and it didn’t produce the results we were hoping for.”

In other words, we are not going to risk another referendum defeat like we suffered over the Lisbon Treaty seven years ago.

Why would that be bad news? Well, if the UK is going to try and repatriate powers from Brussels as Cameron has promised, it needs there to be an ongoing treaty negotiation. No treaty, no leverage.

David Cameron could be in for a lonely few days in Brussels. Credit: Reuters

Only if Cameron can threaten to veto something that the rest of Europe wants, can he exert any pressure at all. That is how friendless he has become in the councils of Europe.

The UK will sit on the sidelines for much of the discussion on how to save the Eurozone.

The big issue for London this time is going to be the EU budget, which the PM is determined will not rise more than the rate of inflation.

He has a veto over any long-term budget deal, but the others can still get around him by setting the budget one year at a time by majority vote.

On this, though, Cameron is not entirely alone in believing that while every national Government is cutting spending, Brussels should - at the very least - not be increasing theirs.

Recent British demands to repatriate up to 130 powers over police and justice have deeply irritated our continental ‘partners’.

They believe London is exploiting the Eurocrisis to try and carve out a special position for the UK within the EU, and think David Cameron is more concerned with appeasing his back-benchers than helping resolve the worst economic crisis since the 1930’s.

It is likely to be a lonely couple of days for him in Brussels.