France and Germany Test the Cement Of a Peaceful Europe

THE shell-cratered hills outside this northeastern French town are evidence that a prosperous European future hinges on harmonious relations for France and Germany.

Rivalry between the two continental powers has torn not just the two nations, but all of Europe, twice this century. Here about 80 years ago, France and Germany faced off in the most bitter and destructive battle of the three wars they fought between 1870 and 1945.

It was with the wisdom of hindsight, then, that former French President Francois Mitterrand and German Chancellor Helmut Kohl met at Verdun in a 1984 ceremony cementing the Franco-German rapprochement after World War II. The reconciliation helped the European Union's experiment in building a federation.

Important to be friends

Yet Franco-German cooperation is now being tested. And the dream of forging a fully integrated Europe may hang in the balance. New French President Jacques Chirac, who succeeded Mr. Mitterrand yesterday, appears well aware of the importance of friendship with a powerful Germany. His first act of diplomacy to meet with Mr. Kohl today in Strasbourg, France.

Many observers say relations are naturally readjusting after German reunification.

''Both sides are now a little more cautious. Maastricht euphoria has certainly diminished,'' said Otto Graf Lambsdorff, an elder statesman of Germany's Free Democratic Party. He was referring to the 1992 treaty laid out in Maastricht, the Netherlands, which provided the framework for a European federation.

''Franco-German relations remain essential for the EU,'' Mr. Lambsdorff added. ''If we agree on something, it still may not happen. But if we disagree, it won't happen at all.''

Chirac and Kohl are likely to discuss differences between Paris and Bonn over the EU's future. Germany favors ever-closer European integration, reasoning that Europe -- if closely bound up economically and politically -- would hardly break into war.

But France worries that a reunified Germany could end up dominating a European federation, relegating Paris to a second-class status.

''Paris is not yet ready to sacrifice its sovereignty, something that will be necessary to create a strong Europe,'' says Valerie Guerin-Sendelbach, a political scientist at the German Society for Foreign Policy in Bonn.

A call for super-Europe

Perhaps the most difficult issue for both countries will be agreeing on how the EU makes decisions in the future. Germany wants to develop a supranational EU decisionmaking structure, significantly increasing the powers of the EU Parliament.

France, is tilting toward Britain's camp -- unwilling to give up national sovereignty. London is the EU member most guarded about surrendering sovereignty to a bureaucracy largely unaccountable to the EU electorate in Brussels, the EU headquarters.

Also, Paris's priorities for EU foreign policy diverge from Bonn's. Germany is concentrating on the EU's eastern flank, looking to export Western European stability to Poland and Hungary. But France would prefer to deal with instability on the EU's southern border, especially North Africa's Islamic extremist threat.

Chirac's administration will likely take weeks if not months to refine its EU policy. So far, the signals have been ambiguous.

A reassuring sign for Germany is the fact that EU advocates seem to dominate the French government. Yet Germans are concerned about an early Chirac campaign promise to hold a French referendum on further EU integration moves. The French electorate approved the Maastricht Treaty only by the slimmest of margins.

Another cause for Bonn's discomfort is the domestic focus of Mr. Chirac's agenda, which could prompt Paris to put important EU goals on the back burner. The new president, for example, has identified reducing unemployment as his top priority. But possible government spending on jobs could hurt France's ability to meet stringent fiscal criteria as the EU member states plan to switch over to a common currency by the end of the decade.

German apprehension about France's EU commitment was evident in a recent commentary, published under Kohl's byline, in the French daily Le Monde. ''The imperative of the moment was not to renationalize the European community -- as some still think today -- but to develop it into a European Union,'' he wrote.