The Great Rebalancing: France and Germany

Abstract

You cannot talk about modern Europe without the post-war reconciliation between France and Germany. Hence, the euro has always been also a political project. That’s also the reason why the Eurozone reform cannot be reduced only to a technical matter, but should be seen in the wider historical context of Franco-German reconciliation and European unification. We need to build bridges between the “German” and “French” way of economic thinking by combining stability and rules, and governance and growth. By encouraging Germany to take steps to lift domestic demand and investment, while France embracing reforms in its labour market and business environment would trickle down to the rest of the Eurozone and provide stronger growth as well jobs.