Events bring Kenny, Hollande closer

Mon, Oct 22, 2012, 01:00

ANALYSIS:THE LAST time a Fine Gael taoiseach came to Paris to visit a newly installed socialist president, it became the stuff of diplomatic legend. That was December 1981 and Garret FitzGerald and François Mitterrand were less than a year in their posts, and agricultural issues were looming large at European level.

Before the formal meeting began at the Élysée Palace, FitzGerald later recalled, he struck up a conversation in French about what he saw as a puzzling gap in the Catholic intellectual tradition in France in the 19th century. By all accounts, Mitterrand – himself an intellectual and, in his youth, a right-wing Catholic – relished the encounter. He would show affection for the Republic throughout his presidency. And FitzGerald believed the alliance that began that day was vital in helping save the State’s milk quota during a fraught round of European discussions.

Today, Taoiseach Enda Kenny will pay his first official visit to the Élysée against a similarly tense background. Dublin is again campaigning for a vital European agreement – to ease its multibillion-euro bank debt – and with resistance growing in Berlin and other creditor-state capitals, Kenny needs every influential friend he can find.

At first glance, the leaders of France and the Republic have little in common.

They don’t speak a common language and stand at different ends of radically different political cultures. It’s hard to imagine Kenny endorsing a top tax rate of 75 per cent, as French president François Hollande did, or Hollande adopting as his mantra the desire to make France a great country in which to do business, as Kenny has for this State.

But there are also ample similarities in the two men’s political trajectories. Both are more centrist and pragmatic, notably on economic policy, than the ideological centres of gravity in their respective parties. Both are career politicians who rose to their current positions relatively late, having seen much-fancied rivals fall by the wayside and having been underestimated by many – including within their own parties.

They are both portrayed at home as canny deal-makers, with a low-key personal style better suited to one-on-one situations than the television studio.

Circumstances have brought them closer. This will be the first official visit by any taoiseach to Paris since autumn 2008, a fact that reflects how tensions over corporate tax have dominated the relationship in recent years. Nicolas Sarkozy, Hollande’s predecessor, rarely missed an opportunity to attack the Republic’s low company tax rate.

French socialists have traditionally shared these misgivings, but since Hollande took office the subject has barely figured at ministerial level between the two governments.

Instead, they have found themselves increasingly on common ground.

Hollande won the election with a pledge to reorient the euro zone’s response to the debt crisis towards growth over austerity – a platform that chimed with concerns in Dublin and other European capitals feeling the strain after years of deep budget cuts.

Sarkozy took a strategic decision to align himself closely with Merkel, believing it was imperative to sustain the perception of distance between Paris and the struggling “Club Med” at a time when France’s weak financial position left it exposed to contagion from the south. Hollande, encouraged by his electoral mandate and evidence that market pressure on France has eased, has felt no such need to cling tight to Berlin. Most of his positions on the euro crisis are very close to those held by Sarkozy, but unlike his predecessor he has not been afraid to air his differences with Merkel in public.

The result is that Hollande has pivoted France closer to Spain, Italy – and the Republic. He insists on the principle that virtuous states should not have to pay punitive interest rates to borrow money, and has spoken of Paris acting as a “bridge” between north and south in the euro zone.

Most important for Dublin, France has become one of its most useful allies in its campaign for bank debt relief. Senior French officials say it was in the spirit of the June deal by EU leaders that “legacy” debt would be covered by the ESM rescue fund. Despite the noises coming from Berlin, Paris says a deal is still on, and that its “ideal” situation would be an agreement between finance ministers by the end of the year.

“The discussion we must have is to guarantee the retroactive effect of this, which is very important vis-a-vis the markets. It will take some time – weeks or months,” said a senior Élysée official. “The statement of June opened the door to this – and it hasn’t been closed.”

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