Even as many European nations recoil from the obligations of economic union (because neither borrowers nor lenders are very happy these days), a radical cross-border European politics is being born.

Ironically, the founding document of a genuinely pan-European politics isn’t one that unites the continent. To the contrary, the fiscal compact that German Chancellor Angela Merkel persuaded her European Union colleagues to embrace — with an assist from French President Nicolas Sarkozy — has given rise to bitter dissents both within and among European nations. The pact, which codifies fiscal constraints that will inflict years of economic stagnation, if not accelerated decline, on such debtor nations as Spain and Greece, has divided Europe into rival camps — the Keynesian leftists against the austerity rightists.

Nothing new there. What’s new is that these camps extend across national borders. An embattled Sarkozy, facing a strong reelection challenge from Socialist Francois Hollande, has sought and received Merkel’s endorsement. The German chancellor has not only expressed her support for Sarkozy but also her willingness to take to the stump on his behalf. Although heads of government often meet with opposition candidates, Merkel rebuffed Hollande’s request for a meeting; fellow conservatives David Cameron and Mariano Rajoy, respectively the British and Spanish prime ministers, have also said they did not wish to meet with Hollande.

Hollande’s heresy is that he believes — with good reason — the austerity budgets the Merkel-Sarkozy compact would inflict on Southern Europe’s already deeply depressed economies will make it impossible for those nations to return to financial health. He wants to supplement the compact with measures to stimulate those economies now and push back the budget-tightening by several years. Hollande’s critique and proposals are widely shared among Europe’s social democratic parties.

Once Merkel chose sides in France, the door was open for Germany’s left-of-center parties to do the same. This month the German Social Democrats declared their support for Hollande’s candidacy. They are talking with the French Socialists about developing common positions on taxes, minimum wages and a host of economic questions.

The rise of pan-European — or at least Franco-German — politics is arriving about 100 years behind schedule. In the early 20th century, the socialist parties that were strengthening across Western and Central Europe pledged their solidarity to one another and to the workers of the world. The workers of one nation, they declared, would never take up arms against the workers of another. This grandest of illusions crumbled with the outbreak of World War I. French socialist leader Jean Jaures and German socialist leader Hugo Haase met in Belgium on the war’s eve to declare “guerre a la guerre,” but four days later, and for four years following, guerre devoured the continent — and any notion of socialist solidarity.

In the years since, cross-border camaraderie among ideologically compatible parties has been more the exception than the rule. In the ’60s and ’70s, such social democratic leaders as West Germany’s Willy Brandt, Austria’s Bruno Kreisky and Sweden’s Olof Palme reinforced each other’s perspectives and initiatives when they could. Conservative parties, however, have customarily been too nationalistic (and their voters, more so) to seek commonalities with other countries’ conservatives. The European Parliament, a creation of the European Union in which parties of kindred ideologies from different nations form distinct parliamentary blocs, was supposed to become the fulcrum of cross-border politics. But the Parliament’s powers are so limited that it never remotely eclipsed the prominence of national legislatures and prime ministers.

What the parliament couldn’t achieve, however, Merkel’s fiscal compact did in one fell swoop: By, in effect, mandating the budgetary policies (and some financial regulations) of every EU member state, it has spurred the creation of a European politics. The more that economic decisions are made at the European level, the more that parties of the Euro-Left will band together and parties of the Euro-Right will find common cause. (British Conservatives, however, are so much more laissez faire in their approach to economics than are their continental counterparts that they’re likely to keep their distance — as they did when they rejected Merkel’s compact out of deference to Britain’s high-flying financial operators.)

The Tories notwithstanding, all politics in Europe isn’t local any more. Roll over, Bismarck, and give Clemenceau the news: The German chancellor wants to campaign for the French president. Mein Gott! Mon Dieu! OMG!

Harold Meyerson is editor at large of The American Prospect.

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