The Merkozian candidate

Stratfor.com

German Chancellor Angela Merkel this week publicly endorsed the re-election of French President Nicolas Sarkozy in Monday's upcoming French elections, following an endorsement by Germany's Christian Democratic Union on January 30. Normally, national leaders maintain at least a pretence of neutrality in the elections of other countries. First, there is the presumption that elections are an internal matter and that outside interference is inappropriate. Second, should the endorsed candidate lose, the winner would likely be a bit difficult to work with. Merkel, who has formed a close alliance with Sarkozy within the European Union, clearly felt that given her very open alliance with Sarkozy, pretence was pointless.

It is clear that Merkel would want a Sarkozy victory, but it is not clear that her endorsement would help him. The endorsement came on the day that France released its annual trade figures. The French trade gap rose by about 35 per cent over 2010. Where Germany had a €157 billion trade surplus, France had a €70 billion deficit.

These numbers are at the heart of France's internal political debate. Sarkozy, alongside Merkel, argues that the problem behind the figures is that France does not have the same economic discipline that Germany has and therefore is not competitive. His approach is to move to stimulate business activity. On the left, Sarkozy's Socialist opponent, Francoise Hollande, who supports the European Union, takes a very non-German approach to dealing with the deficit, urging among other things a shift in the tax code that increases taxes on the wealthy in order to reduce France's deficit. In that sense, the race is a classic contest between right and left.

However, the French race is more complicated than that. The left wing of the Socialist Party contains eurosceptics. Even more, the party to the right of Sarkozy, The National Front, led by Marine Le Pen, is fundamentally anti-European Union. From Le Pen's point of view, the reason behind the annual trade figures is not simply internal French tax or regulatory policies, but the fact that the structure of the European Union is inherently tilted against France, and that the same open borders that allow streams of immigrants into France allow German goods unfettered access, to the disadvantage of the French.

Le Pen has a problem. While she has significant strength in the polls – her father made it to the run-offs in one presidential election – under French law she must receive the signatures of 500 French elected officials in 30 departments in order to be on the ballot. So far she says she has only 350 and there is a serious possibility that she might not be on the ballot.

Sarkozy and Hollande are very close at the moment in the polls. Le Pen is a strong third but weakening of late. Sarkozy and Hollande agree on the fundamental issue, which is that the European Union is good for France; they disagree within the context of the union. Le Pen represents a segment of France that sees the European Union as the villain behind the annual trade figures. If Le Pen is on the ballot and comes in third, it will demonstrate France's commitment to the European Union. If she comes in second, beating Sarkozy (as is conceivable), then Hollande would win, the European perspective would dominate, but the internal policies would shift. If however Le Pen is not on the ballot, and her substantial constituency is quite legally deprived of an anti-European vote, that faction becomes a destabilising element.

Merkel's intrusion does not help this situation. With the comparison of trade figures and a host of other economic statistics, the charge against Sarkozy is that he is supporting German national interests. Hollande will argue that you can be Europeanist without imitating Germany. Le Pen may not get a hearing for an anti-European stance, and the story will grow that she was denied her chance by the French political class. Merkel's intrusion strengthens the National Front's claims of loss of sovereignty and Hollande's claims that Sarkozy is a German puppet.

Sarkozy seemed pleased with the endorsement. Ultimately, he has committed himself to the view that the European Union is essential for France and that the German model will allow France to solve its problems.

Caught between the far right and the left, he has little room to manoeuvre, but he does not want to manoeuvre; he appears sincere in his beliefs. Therefore an affirmation from Merkel that the infatuation is mutual will not weaken his position, and might strengthen it. It might work. But the real question is whether the anti-Europeanist faction will grow, and how Sarkozy will protect his right flank given his embrace of Germany as a model to emulate.

Stratfor.com . Reprinted with permission of STRATFOR.