What do the daughter of a Grantham grocer, the daughter of a Prussian pastor, and the son of a Hungarian heir have in common? According to the received wisdom proffered by the Fourth Estate, potentially quite a bit. In the wake of the installation of Angela Merkel as the Chancellor of Germany, and the recent election of Nicolas Sarkozy to the Presidency in France, gallons of ink have been spilt on the subject of whether either of these conservatives possess the political skills and determination required to achieve Thatcheresque reform of their moribund economies. There is considerable optimism that the national economies critical to the continental European economy, boasting unemployment rates of 12.6% and 10.2% respectively, will shortly benefit from some revolutionary restructuring. Much is being made of the fact that these newly-elected executives hail from the constituencies typically blamed for strife and sluggish performance in Germany and France, with Merkel being the first East German to hold the post of Chancellor since reunification, and with Sarkozy claiming immigrant heritage. It is being presumed that, as members of these constituencies, they will be better able to cultivate broad consensus for reform, and better able, with minimal hand-wringing, to stick to their agenda when the going gets tough. However, while the election of any conservative in Europe is cause for optimism, here are just two of the reasons why you shouldn’t expect either Merkel or Sarkozy to be the next Thatcher.

Reason # 1: Grand Coalitions & Gaullist Corporatism

First and foremost, both Merkel and Sarkozy have been reluctant to cultivate an antagonistic relationship with their opponents. When Margaret Thatcher inherited government from Callaghan following the ‘winter of discontent’ in 1979, she understood that the Labour Party’s policy prescriptions, already thoroughly discredited, needed to be pointedly rejected in order for the healing to begin. Lamentably, both Merkel and Sarkozy have failed to grasp the same. Admittedly, Merkel has little choice as to the nature of her relationship with the Social Democratic Party of Germany. In 2005, she waged a campaign that would have made Al Gore and Donna Brazile blush, squandering a pre-writ polling lead of 21%. In less than a month, as her lead shrank, she went from being the gritty physicist who quoted Reagan, and who endorsed a flat tax proposal, to the senior partner in a grand coalition government. As Chancellor, she faces a Bundestag where the parties of the left hold 327 seats, and the parties of the right a mere 287. In truth, only the stubbornness of the German Left Party, the leadership of which refused to enter into a coalition with the incumbent SDP, prevented Schroeder from retaining his job. Ultimately, the price of the Chancellorship, in the negotiations that followed the deadlocked election, was the population of every cabinet seat of consequence with an SDP member. In short, with the Ministries of Finance, Health, and Labour still controlled by the party responsible for German stagnation and stagflation, this is hardly a propitious time for the overhaul of the German economy. Worryingly, Merkel has already compromised on her preferred timeline for the balancing of the nation budget, deferring the use of black ink until 2011 in order to appease her fractious coalition. In so doing, she risks wasting the recovery in consumer confidence that accompanied her appointment.

For his part, immediately after his election, the only obstacles to the implementation of Nicolas Sarkozy’s agenda seemed to be those that he created himself. Even following a slightly disappointing result in the parliamentary elections, he still wields a massive majority. Despite this, however, Sarkozy has formalized cooperation with the left, even as the Parti Socialiste is tearing itself apart. Immediately after his victory, Sarkozy committed himself to open government, giving the crucial portfolios of Foreign Affairs and Defence to former members of the PS. After making these appointments, Sarkozy sat down with the heads of France’s power trade unions and syndicates, mollifying them with soothing words about his intentions and offering them a complete reversal of his totem policy of longer hours for teachers. While it remains to be seen if these acts are largely ornamental, or demonstrate that Sarkozy, like other UMP leaders before him (most notably Chirac) intends to campaign as a reformer and govern as a centrist. However, they do seem to indicate that, at the very least, Sarkozy is loathe to challenge ingrained French corporatist structures. Ultimately, without reforming the manner in which France decides how it will do business, it seems highly unlikely that Sarkozy will be able to substantially change how France actually does business.

Reason #2: The Extreme Distraction of European Diplomacy

The first official act of a chief executive is always symbolic, and there was no mistaking the symbolism of Sarkozy’s trip to Germany to meet with Merkel on the afternoon of his inauguration. He and Merkel both wanted to signal to their largely Europhile constituents that new leadership for Germany and France meant a new round of negotiations concerning the direction of the European Union, which has been reeling since the rejection of the proposed European Constitution by French and Dutch voters in 2005. However, many commentators, particularly in North America, have failed to grasp just how adversely a renewed attempt to revive the European Constitution might impact Merkel and Sarkozy’s domestic agendas. As successive executives have found, European shuttle diplomacy consumes substantial amounts of both time and political capital. Sarkozy, for instance, is already wandering ‘off-message’ after only a month on the job, as the press has focused on his failure to expound on his preferred content for the European Constitution, at the expense of discussion of his education and labour reforms. More importantly, however, the debate about the future of Europe might help the splintered left galvanize support in both Germany and France, insofar as debate about Europe is invariably framed as a contest between those who believe that the EU should be a neoliberal institution that reduces trades barriers, or an institution that harmonizes social entitlements across the continent and which serves as a political counterpoint to American dominance. Whereas the left in Germany and France has lost the trust of citizens where management of the domestic economy is concerned, it is still more trusted on Europe than the right. Precious few commentators in North America have recognized that the 2005 failure of the European Constitution was as much a function of public discontent with the focus of the document upon tariffs (the concern of the left) as it was a function of anxiety about ethnic migration (the concern of the right). Ultimately, Merkel and Sarkozy could easily find themselves ensnared in a trap: Pressured to do something about the floundering EU, they might discover little support for the streamlined European Constitution they both prefer, eventually undermining their domestic agendas.

Conclusion

In summary, conservative observers should prepare for piecemeal, rather than wholesale, economic reforms from Angela Merkel and Nicolas Sarkozy. Theirs is a message of reform, but they are constrained both by the strategic environments they face, and their own tendency to moderate. Hopefully, as their opponents prove to be obdurate, Merkel and Sarkozy will reciprocate, offering voters in Germany and France a Manichean conception of economic policy, just as Thatcher did in 1979. Hopefully, when compromise tax packages still result in riots and strikes, Merkel and Sarkozy will show the kind of grit that Thatcher showed when dealing with coal workers in the 1980s. Hopefully, when Europe threatens to derail domestic initiatives, Merkel and Sarkozy will simply ignore it, just as Thatcher did throughout her tenure. These are just hopes, however, and as yet, nothing more.