Obama, Sarkozy and Hot Dog Diplomacy

We will definitely remember Nicolas Sarkozy’s visit to Washington and his lunch at Ben’s Chili Bowl, the popular hot dog restaurant of Black Broadway. It is a pleasant restaurant, but also a symptomatic restaurant. “Welcome to the club of states who don’t turn their back on the sick!” the French president said in his speech at Columbia University in New York City. Less than three months after the bitter electoral reversal in Massachusetts, Barack Obama miraculously rebounded on the insurance reform. Thanks to his persistence in the face of the “Tea Party” movement and his dedication to persuading Congress, he regained many points in the polls and can approach the November mid-term legislative elections in a better position than before. This perseverance is even more remarkable because it cuts through Paris’s hesitation to make a decision on carbon taxes and fiscal policy.

“President Obama, when he says something, keeps his word,” said Nicolas Sarkozy during their joint press conference at the White House. Again, this is a sign of consistency. The principal criticisms about Obama were never about versatility, but rather his tendency to think carefully. It was not too long ago that we criticized him for his “long hesitation” on Afghanistan or his political “illusion” of the helping hand in Iran. In politics, Barack Obama gives the image of a sprinter with sudden accelerations rather than a marathon runner. Of course, he will sometimes revise his objectives in certain aspects, whether it is concerning the public opinion on medical insurance or the supervision of bonuses on Wall Street. However, he gives the worldwide impression of being a strong leader.

By praising these consistent qualities of the American president, Nicolas Sarkozy wanted to reassure and calm us. There is not a menacing cloud between Paris and Washington. “There may be disagreements, but never for the wrong reasons,” assured the president of France by emphasizing common confidence and the pleasure of working hand in hand to prepare for the French presidency of the G-20 at the end of the year.

Sarkozy even promised to “go even further in regulating world capitalism” and to start thinking about a new international monetary order. On this crucial subject of financial system reform, which was placed as a top priority, Sarkozy and Obama’s meeting did not produce any major progress. After having criticized the “capitalism of speculation” in his speech in New York, the French president is aware of the references to transatlantic divergences on the regulation of “hedge funds” and the harmonization of accounting rules. Besides a letter of refocusing published by the piloting committee of the G-20, Paris wisely accepted the Pittsburgh calendar, which was not exactly because of its own ambitions.

And yet, if there is a place where Barack Obama still has not proved his exemplary consistency and where Paris could play the role of a catalyst, a good example to look at is the reform on Wall Street. Like the Nobel Prize winner of economics, Paul Krugman, recently emphasized, the latest version of the American financial reform project, which is currently on the table and was elaborated by the Democratic senator of Connecticut, Christopher Dodd, is “substantially weaker” than the House of Representatives’ initial project. It is not said anymore that the Volcker propositions, which were the most incisive on the supervision and separation of banking activities — though officially endorsed by Barack Obama a few months ago — are included in the final Congressional plan (their possible implementation having finally been returned to the good will of American regulators).

On this terrain, like on many others, Nicolas Sarkozy is discovering his “diplomatic hot dog” limits. It is not enough to go to lunch with Carla Bruni in Bill Cosby and Barack Obama’s favorite bistro on U Street to consolidate the transatlantic relationship or even to make the front page of the American press. Despite the declaration of friendship, Sarkozy’s first official visit to the White House since the election of Barack Obama did not end in concrete results, neither for establishing a precise calendar regarding the sanctions against Iran, nor the formal engagement of the Pentagon’s tanker aircraft. A strong signal on the acceleration of financial reform was missing. To consolidate the confident relationship between Paris and Washington and to plan the basis of a new international monetary order, it will be necessary to show more consistency and determination on both sides of the Atlantic.