Europe's odd couple sets off on right foot

(BRUSSELS) - Europe's odd couple, German Chancellor Angela Merkel and Socialist French President Francois Hollande, may be poles apart but their first double act appeared to set off on the right foot.

At a closely-watched European Union summit into the wee hours Thursday, his first since a May 6 election, Hollande stole the thunder from the continent's most powerful leader.

In Berlin, news weekly Der Spiegel dubbed it "the first EU summit in years not dominated by Merkel" and said "Hollande steals the show."

After five years of "Merkozy" -- coined after the tie-up between Merkel and conservative Nicolas Sarkozy -- the EU's 27 members are anxiously watching whether the bloc's Franco-German motor morphs into a like-minded "Frangela," if not "Merkollande", or simply flies apart.

In crisis-hit Europe, Merkel is the high-priestess of austerity, Hollande the just-elected prophet of growth. The former leads the continent's powerhouse nation and paymaster, the latter the EU's second biggest economy, though one storing up a sea of trouble.

At the summit, Hollande urged peers to sign off on a new, if vague, growth pact next month, saying too much austerity is driving Europe into profound recession.

He also dared a long-taboo suggestion that countries sharing the euro borrow jointly in future to spread risk more evenly. By issuing so-called "eurobonds," countries would all borrow at median rates, lowering costs for the most indebted of the 17 euro nations, but raising the bills in Berlin.

The notion, strongly opposed by Merkel, would also mark a milestone in efforts to forge real economic growth and with it fledgling political union.

"Never were EU member states -- especially the euro-drivers Germany and France -- so far apart in their demands," said mass circulation Bild.

Yet analysts as well as officials present at the closed-door talks said the odd bedfellows seemed set for a calm cohabitation.

"There is no Merkozy anymore," said a senior European official who asked not to be identified. "And frankly people are relieved."

"Everyone was able to express themselves at the summit, which hasn't always been the case."

"There was no psychodrama, the two remained very earnest, very analytical," said Stefan Seidendorf of the Franco-German Institute in Ludwigsburg. "The summit was a good start."

Tales abound of Sarkozy losing his cool and lashing out at British Prime Minister David Cameron, European Commission president Jose Manuel Barroso or Danish Prime Minister Helle Thorning-Schmidt.

Even between Merkel and Sarkozy, ties were fraught at the outset, with EU leaders famously kept on tenterhooks as officials shuttled up and down hotel lift shafts trying to resolve differences.

The relationship was, though, much worse between Jacques Chirac and Gerhard Schroeder.

"Hollande and Merkel are good together," said Seidendorf.

The Frenchman has worked hard to build a very different image to that of Sarkozy.

For his first summit, the president who pledged to be a "Mr Normal" took the train for the 82-minute journey from Paris to Brussels, unlike his predecessor who regularly used two aircraft.

Instead of striking pre-summit deals with Merkel, as per the 'Merkozy' past, Hollande met with Spanish Prime Minister Mariano Rajoy. The two even took the train together.

Recession-hit countries of southern Europe -- Greece, Portugal, Spain and Italy -- have welcomed Hollande's insistence on growth rather than austerity to fix the eurozone crisis.

But can he make a meaningful difference? "Only if he handles Merkel with great diplomatic dexterity," said Charles Grant of the Centre for European Reform?

"Until recently, many German leaders seemed disconcertingly certain that their policies for dealing with the eurozone crisis were absolutely right.

"Now some of them understand that at least some of their policies are not working. Hollande and other EU leaders need to explain to them that an inflexible Germany risks becoming isolated."