Macron and the V4: Will the Red Lines Move?

Paris has seen that it can advantageously use tensions within the Visegrad Group to firmly anchor its political aims in the region.

More than a year after the election of Emmanuel Macron as French President, and after his Sorbonne speech, other EU member states still seem to have been caught at-footed about the activism of the President on the topic of the future of the EU. Germany, the only other European power remaining in light of the result of the British referendum, has only recently timidly responded to the numerous proposals Macron put forward in 2017 on the future of the Eurozone, EU security and defense, or the issue of European competitiveness.

In the equation to create a pan-European consensus on the future of European integration, Macron has also paid a remarkable amount of interest to Central and Eastern Europe, with a keen focus on V4 countries. This represents a change from the relative disinterest expressed by previous presidents, from François Mitterrand to François Hollande. The question in the air, however, is whether this represents a fundamental change in the French approach to European policy, and a structural change destined to placate the feelings of V4 countries that they are not “first-class members” of the EU, or whether this a short-term move aimed at shoring up support for Macron’s reforms.

Europe is “not a supermarket”

Finding an answer requires understanding what is on the agenda with relations between France and the V4, but also understanding the nuances of the European platform on which Macron was elected. While the victory of Macron against Marine Le Pen was met with a loud sigh of relief across Europe, the newly elected President’s pledge of a “Europe that protects” (Une Europe qui protège) has the potential to put the two sides on opposite paths, especially on economic and social issues. This was symbolized by the interview given by Macron to the European press in the sidelines of his first European Council, where he proclaimed that Europe was “not a supermarket” and repeated campaign statements linking lower wages, social dumping and rule of law. He also promised to levy sanctions against the Polish government within three months of his election. Symbolic of this desire was the first phase of the reform of the Posted Workers directive, which was agreed upon in October 2017, with notably the Czech Republic and Slovakia voting in favor, after Macron had met the Prime Ministers of these two countries earlier during the year.

The question of where the V4 as a group, but especially its member states, fit in the vision of a Europe that protects is what will determine the nature of the future relationship, especially now that Chancellor Angela Merkel has finally realized where her coalition stands on Macron’s proposed reforms. While Berlin’s silence provided useful political cover for a region that still sees Germany as the main engine of Europe, and the most important player for V4 countries, Paris will now ramp up pressure on Bratislava and Prague to position themselves and put forward tweaks or counter-proposals that could form part of a greater European negotiation on the future of the EU.

The bridges to Hungary and Poland

The tensions between Paris, on the one hand, and Budapest and Warsaw, on the other, on rule of law issues and social dumping mostly, reinforce the perspective that the Czech Republic and Slovakia can and should act as bridges to Hungary and Poland, but also give the impression that Paris has seen that it can advantageously use tensions within the Visegrad Group to firmly anchor its political project in the region. Without going so far as trying to hamper the unity of the group (which will always remain an ad hoc construct), finding partners for its policies is key for France’s ability to implement its proposed plans.

In the equation to create a pan-European consensus on the future of European integration, Macron has also paid a remarkable amount of interest to Central and Eastern Europe, with a keen focus on V4 countries.

In this regard, the Czech Republic provides an excellent example in terms of defense and security. Prague enthusiastically took part in discussions around setting up Permanent Structured Cooperation, which allows small groups of countries to cooperate in organizing joint trainings and capacity-building exercises or procuring joint capabilities. In addition, the Czech Republic can also be seen as a clear “role model” for European integration from the French perspective, as progress can still be measured in terms of joining the Eurozone—a very frequent topic of conversation in Paris—and being able to adapt its competitiveness model to move away from dependency on the manufacturing sector. Similarly, Slovakia, as the only Eurozone member in the region, represents a key partner for Paris in discussing future monetary and fiscal orientations and the governance structure of the Eurozone, and can serve as a messenger for regional concerns on these issues. Given the importance of economic and security issues, Paris will continue to engage Prague and Bratislava on these matters, providing the more frictionless part of the V4-France agenda of cooperation.

Visible differences on labor market reforms

Similarly, the migratory issue seems to have lowered in intensity, as recent French legislation, destined to streamline the asylum process and allowing for a longer detention period for illegal migrants coupled with an increased role for border police and a more repressive French approach to migration, has subtly but assuredly erased certain fundamental differences. In this light, it can be said that France is building the conditions for a large-scale asylum deal to be agreed upon in 2018 at the EU level. Paris can therefore build goodwill on this topic of shared importance, on top of maintaining strong bilateral relations on other issues, demonstrating that Central Europe is not viewed negatively in the concept of a “Europe that protects”.

There are other issues that will prove more challenging for Macron to find allies in the region. On social and economic issues, the agreement on the next Multi-annual Financial Framework and reforms of the EU, France and V4 countries start from a very different perspective which may preclude genuine progress.

Reform of the EU labor market may represent the issue on which differences are the most visible. Macron’s avowed desire to push for more social and fiscal convergence—in other words, leveling the playing eld—presents clear risks for the competitiveness model of Central Europe and is at the heart of Macron’s idea of a Europe that protects. Proposals to harmonize tax rates for companies and to agree, by 2020, on a set of rates that would apply to all member states and be a condition for access to cohesion and structural funds, which are destined to prevent the use of said funds for indirectly financing social dumping, have caused concerns in Central Europe, and will only be marginally supported. The dependency of V4 countries on foreign direct investment, and the major role that German companies play in the region, indicate that France will in all probability be in a minority on this agenda. Any discussion will have to be accompanied by how further incentives can be provided in order to compensate, especially in the more forward-looking digital and technological sectors, for any potential loss of competitiveness.

Macron does not refuse cuts in the Common Agriculture Policy

The same reasoning applies to any discussion on a European minimum wage, which was already watered down at the Social Summit in Gothenburg in November 2017. Given that all these discussions do not fall within the legislative competences of the EU, any such discussions will fall within an intergovernmental process that does not favor V4 countries, which will only add to their reluctance.

Paris will now ramp up pressure on Bratislava and Prague to position themselves and put forward tweaks or counter-proposals that could form part of a greater European negotiation on the future of the EU.

Macron’s plan, in contrast, to reduce disparities in terms of social contributions (across sectors, for unemployment and retirement, for example) in order to curb any systematic abuses could well, in the long term, be of interest to the region, and could provide a good issue on which to launch a larger discussion about the Social Europe agenda. The posted workers directive is only, however, the tip of the iceberg regarding Macron’s desire to bring more predictability—for workers and for investors—into the European labor market, while attempting to curb any inequalities that may harm the stability of the system in the long term.

Such thinking in France represents the beginning of a departure from earlier thinking about the EU (thinking back to the peaceful functionalism of the Mitterrand presidency), according to which the EU was built as a political project, which allows for the projection of French power, rather than an economic project. France has always sought to obtain compensatory mechanisms for its participation in the single market, whether they be in the form of pushing for pan-European industrial policies or a more robust carbon tax, or the existence of the Common Agricultural Policy (CAP). This last domain is symbolic of the change of thinking brought forward by Macron: he is the first President not to refuse the proposal that the budget line for CAP in the next MFF would be diminished, this having constituted a red line for this policy dating from Charles de Gaulle. Indeed, a French reflection paper called for “deep reform of the oldest policies (CAP and cohesion policy) … to better meet the challenges to which these policies must respond, for the sake of efficiency and added value at the European level”. It is not difficult to see, from the V4 perspective as important beneficiaries of these two policies, how such a desire can lead to a certain amount of nervousness.

The trick employed in the CAP discussion is particularly relevant to this discussion. France has proposed changing the method of calculation of direct payments to farmers, which was taken over in the Commission proposal. This would mean that farmers from larger operations would receive less money per acre; in general, direct support to farmers would be much less reduced than funds for rural development, which also are important for the smaller V4 countries.

Finally, just as importantly, it looks increasingly clear that France will support the Commission proposals on the reform of cohesion policy funds, and will also push for a reform of the calculations determining how monies are allocated to countries. The introduction of new elements in this equation, such as unemployment rates or the impact of immigration, rather than focusing solely on the GDP per capita, can also mean that fewer funds would be dedicated to CEE countries (and more to southern Europe); this comes on top of the harsh reality of numbers which reveals that in real figures, the Commission proposal plans for a 7% decrease in cohesion policy funding. The discussions over the final numbers could therefore become fractious between France and the V4 countries, and represent quite accurately how the desire for reforms of the EU, expressed by Macron, could clash with the positions of CEE countries.

The V4: A destructive rather than a constructive group

There are therefore a certain number of hot points in the future relationship between France and the V4 countries, which should however not obscure the overall agreement regarding the future budgetary priorities of the EU: defense, border management and protection, investments in technology and innovation and youth. Discussions about the relationship should not be limited to the more difficult, more intergovernmental in nature, dissensions concerning the reform of the labor market which will be harder to find an agreement on at the European level in the short term. The V4 should not underestimate, however, the clear need for Macron to obtain results before the European Parliament elections in the spring of 2019. These will be the first elections for Macron since his election, and his success, not only at the national level but also in his ability to build an influential group at the EP, will be premised on his ability to portray himself as a reformer (in France and in the EU) and to find partners to carry out these policies.

Paris is looking to the V4 to provide reactions to the proposals floated in the last year. If there are none, the V4 countries will remain, from France’s perspective, a destructive rather than a constructive group, whose ability to influence European debates and future orientations will remain rather limited. It is a question of choices to make for countries such as the Czech Republic and Slovakia in terms of maintaining a more productive relationship with Brussels, and whom Paris sees as natural partners.