Mary Dejevsky: The coming Franco-German split

Europe awoke yesterday to the news that a pre-dawn deal had been reached to save the euro and, crucially, that it commanded the confidence of international markets. However great your reservations about the relative power of the markets, the ratings agencies and national governments, the credibility accorded to this accord suggests that it has at least a chance to stick.

If indeed the euro has been saved, however, this does not mean that Europe's difficulties are at an end. Nor will they stop at the side-effects from the so-called "two-speed" European Union that could result from the tighter binding of the eurozone. They will be of a more fundamental nature – connected less with the exigencies of either the EU or the eurozone than with the real, live continent of Europe itself, and the Franco-German alliance at its heart.

That alliance – the flagship and embodiment of post-war reconciliation has been the key to Europe's stability and cohesion for 60 years. It survived the Cold War, the dramatic end of that division, and 20 more years besides. Lauded as the continent's economic dynamo, it could claim a good part of the responsibility for Europe's peace and rising prosperity. As the crisis in the eurozone has progressed, however, the relationship, long regarded as immutable, has begun to look distinctly frayed.

This has little or nothing to do with the obvious personal differences between the two countries' present leaders. It is true that the backgrounds of Angela Merkel and Nicolas Sarkozy could hardly be more different; true, too, that their appearance (Gallic against Nordic), and manner (showy against stolid) hardly suggests compatibility. But in the time that they have led their respective governments, it has been evident that as much unites them as divides them.

Philosophically, they share a centre-right view of politics; their social compass – where they place the benefits and liabilities of the free market – is set at a similar point. And, as the crisis took hold, they both invested enormous amounts of time and personal capital in bilateral talks and meetings.

It would be fair to say that no two individuals could have tried harder to create an impression of concord, even if that was driven by a shared fear that the European project could founder on their watch. Their efforts, though, have not concealed very real cracks.

One of the most telling, and one that caused something akin to panic in both capitals, was the rumour that France might lose its AAA financial rating, while Germany retained it. In the event, this was avoided, and the risk may vanish permanently if the eurozone deal is made to stick. That the downgrading of France was in the air, however, was not fantasy, nor was it malevolent. It was a measure of the two countries' relative economic performance and their banks' relative exposure to risk.

From a common state of low growth a decade or so ago (condemned by credit-swollen Britain at the time as stagnation), Germany has fostered quality manufacturing, improved productivity, slowed pay rises, curbed the welfare state and benefited from something of an export boom. Sarkozy, while harbouring similar ambitions, has been less successful in realising them.

It is not impossible that France could move to the left, or see a strengthened far right – or both – in presidential elections next year. It is hard to imagine Germany doing the same. In Germany the euro crisis has accentuated a natural frugality and brought a latent sense of national righteousness to the surface. It would be simplistic to say that, in response to the crisis, Germany has become more northern and France more southern, but at a popular level the two countries have diverged noticeably in the extent to which they have blamed Greece.

Not so many years ago, Germans would have been hesitant to criticise a fellow European. But the animus towards Greece, in private as in public, has been venomous, underlain by a fierce sense of national identity and statehood.

Policy priorities, too, have started to diverge. Germany and France both separated themselves from Britain over Iraq, leaving Britain and the "new" Europeans to follow the United States. Recent months have seen Britain and France joining forces to intervene in Libya, with Germany standing aside. In the throes of a military reform, which will end conscription and bring in a professional army, Germany appears to see its national interest less and less in behaving as the best team player around. Merkel's decision to abandon nuclear power – a move that reflected electoral gamesmanship as much as principle and infuriated France – can be seen in a similar light.

Some of these shifts may reflect the declining weight of the immediate post-war generation in German politics. Defeat and atonement loom less large than they did. But many, if not all, can be attributed in one way or another to reunification, which made Germany the most populous country in the EU, placed Berlin once again at the centre of German national consciousness, and prompted another re-evaluation of the past, which increasingly focuses on the heritage of Prussia.

With the Arab Spring, meanwhile, France finds its attention yanked to the south and to chapters, glorious and inglorious, in its not so distant past. The Libyan operation, which followed a renewal of defence cooperation with Britain, hints at a new French policy direction that treats Germany less as a privileged ally than a neighbour – and vice versa, as German confidence grows.

Seen against this backdrop, the chequered course France and Germany have traversed in agreeing how to save the euro should be seen less as a problem specific to the eurozone than as a symptom of something much larger. That something is the start of a change in the political configuration of Europe – a stronger, more Prussian, Germany and a more Latin France – that will increasingly define the continent, whatever the single currency's fate.