by David Gow

The liaison turned out to be trop dangéreuse. On Wednesday, after a slow-burning affair of almost five years, Nicolas broke off with Angela. She won’t, after all, pledge her troth at public rallies during his re-election campaign.Merkozy, c’est fini. Cue the theme of ‘Un Homme et Une Femme’.

But this is not a standard chiclit romance gone wrong: beneath the surface lie deep tensions as both leaders fight for their political lives and for a social and political vision of Europe. His open embrace of an anti-Muslim, anti-immigrant platform in order to filch back stray votes from Marine Le Pen appears to have paid off: he’s rising in the polls on a threat to pull France out of the passport-free Schengen zone. Not a runner in today’s Germany.

Least of all in North-Rhine Westphalia, Germany’s most populous federal state and home to a large Turkish minority, where the social democrat premier has called a snap election over budget cuts after the parliament in Düsseldorf threw out her minority “red-green” government’s spending plans. Merkel and her advisers have instantly made plain that the election will be about “sound money”, fiscal rectitude as the FT explains. The snap election, likely to be held in early May, is seen as a harbinger of next year’s general election as the FAZ explains. If Merkel loses and Red-Green wins majority power, it will be another savage political blow after the debacle over the resignation of the federal president.

Merkel has previously said that, as she and Sarko belong to the same political grouping, the EPP, she supports him “no matter what he does or says.” No more: the differences between the two are huge and out in the open. For a sardonic but detailed analysis see the EU Observer. In France, certainly until now, the pro-growth, tax-the-rich policies of socialist Francois Hollande have been winning majority support in opinion polls on the outcome of the second round in the presidential elections, forcing Sarko on the back foot on the economy.

Interestingly enough, the “divorce” is not a big media story in either France or Germany. The German media are going with the snap election, with Frank-Walter Steinmeier, SPD parliamentary leader, setting out the EU, ratification of the fiscal pact, youth unemployment, pro-growth investment in recession-hit countries as key issues in a Spiegel interview. Le Figaro, utterly pro-Sarko, dismisses it in three pars on its website.

CREDIT STATUS THREAT

Instead, the “foreign” media prefer the idea that the UK’s AAA credit status has been put on negative watch for a second time – this time by (Paris-based) Fitch. Lots of Schadenfreude of course after the euro zone countries being lectured by Gordon and now Dave/George about the errors of their ways… See both Le Figaro of France, and Germany’s FAZ.

The treasury spins the Fitch note as a warning of the dangers of abandoning the deficit-cut strategy and the credibility it wins. Ed Balls, shadow chancellor, gave a Newsnight interview last night exposing Labour’s chaotic thinking on the issue: credit rating agencies are normally wrong, especially when Labour is in power, but act as a weathervane when the Tories are…

Heather Stewart spells out the real message – the Chancellor’s dilemma – in a piece for the Guardian. As Nucleus has highlighted before: there’s a real battle going on in Europe about the right road to growth and it’s coming to a head.

LONDON TOP DOG

Not all bad news though, with a report from consulting firm KPMG and Greater Paris Investment Agency finding that London remains the top city in the world for foreign investment, ahead of New York, and Chinese powerhouses Shanghai and Hong Kong. Dave/George will be pleased.

MUST READS

Dr. Thieß Peterse for the Bertelsmann Stiftung - Stability has a price

Daniel Furby and Phillip Souta for Business for New Europe - BNE report on Scotland fact not “fantasy”

Carsten Volkery in Spiegel - Eurozone split over Financial Transaction Tax

Phil Gordon in E!Sharp - The United States and Europe: Meeting global challenges

AGENDA

Tuesday 20th March - 20th anniversary of the European Community Humanitarian aid Office

Tuesday 20th – Wednesday 21st March - Conference on the common agricultural policy – 50 years

Thursday 22nd March - Conference on the EU budget beyond 2013

Thursday 22nd – Friday 23rd March - Meeting of the Foreign Affairs Council (Ministers for Defence)

Thursday 22nd – Friday 23rd March - 5th European summit of regions and cities