Leading article: A problem and an opportunity

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The abrupt cancellation of a meetings between the finance ministers of France and Germany marks a new low in relations between the European Union's two most powerful members. The French cancellation of yesterday's meeting, with just a day's notice, follows swiftly on its decision to postpone a summit between President Sarkozy and Chancellor Merkel next month. It all reveals new tensions between Paris and Berlin which pose both an opportunity and a problem for Britain.

It is a significant moment. There have been decades of close co-operation between the leaders of the two nations: De Gaulle-Adenauer, Giscard-Schmidt, Mitterrand-Kohl, Chirac-Schroeder. But relations between Sarkozy and Merkel have grown decidedly frosty. In part the problem is personal. The cool consensus-seeker Merkel is increasingly frustrated and impatient with Sarkozy's hyper-active maverick interventionist style. The two disagreed over the business of sending EU troops to the chaotic central African nation of Chad when its dictator was under threat last year. Then Sarkozy, without asking Merkel, offered Colonel Gaddafi EU help with Libya's nuclear programme to secure the release of hostage nurses in a piece of what, to the Germans, smacked of political grandstanding.

But in part the problem is power politics. Both leaders are vying for the EU leadership. Sarkozy has come up with the idea of a new Mediterranean Union of states from southern Europe, North Africa and the Middle East – which would exclude Berlin. He hopes this will curb African immigration into France, gain political influence in the Maghreb and the Middle East, and move Turkey away from EU candidacy and into a looser regional alliance. Merkel thinks he wants to lessen the power of Berlin in the EU. Decades of a Franco-German perception of common interests are under threat.

For Britain, division between the two pillars of the EU offers greater potential sway. Sarkozy, with his tone of Euroscepticism, seems more open to that. The irony is that, on the key disagreements, Britain is closer to Germany than to France. Sarkozy wants to restrict the power of the major new investment instruments known as sovereign funds, which he sees as speculative and unscrupulous, where Britain wants a hands-off approach. He wants to pressurise the European Central Bank to lower interest rates, which he says are stifling France's economic growth; the UK, like Germany, wants it to maintain its independence. Things are in the melt in a way we have not seen for years. Those who think the politics of Europe is boring do not understand it properly.

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