Macron and Scholz want to speed up industrial policy in the EU

Macron and Scholz want to speed up industrial policy in the EU

Paris When Olaf Scholz got out of his state limousine in Paris, Emmanuel Macron smuggled him straight to a white tent that had been set up for the Franco-German government meeting in the main courtyard of the Élysée Palace. The Chancellor and the President examined examples of industrial cooperation between the two countries: a hydrogen project by Siemens and Air Liquide, the model of a drone developed by Airbus for the future FCAS air combat system, a rocket engine from the Ariane Group.

Industrial policy was one of the key issues at the Franco-German Council of Ministers on Sunday. It also discussed how the EU should respond to US subsidies for green technologies, which had raised concerns in Europe about offshoring and job losses. However, the common position did not reach as far as the French had wished.

In the final declaration, Berlin and Paris called for “rapid and ambitious European action” that would ensure “competitiveness and resilience” of European industry and at the same time guarantee “fair competitive conditions among the EU member states”. However, the text remains vague.

There is talk of “simplified and accelerated procedures for state aid”. In addition, “sufficient funding” must be ensured, for which “the available financial means and financial instruments” in the EU must be used. In addition, the European Investment Bank should “provide higher risk financing for entrepreneurship and innovation,” the statement said.

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The French government had come up with some very far-reaching ideas ahead of the meeting, including new European funding to support European industry. However, this point met with resistance, particularly in the FDP-led Federal Ministry of Finance. New joint debts in the EU are feared here. Paris had also promoted European production targets in strategic industries and preference for European companies in public procurement.

Scholz expects an agreement in the next few months

At a joint press conference with Scholz, Macron said he nevertheless sees “real convergence” between France and Germany in response to US Inflation Reduction Act (IRA) subsidies. Now it is a matter of finding “good European financing mechanisms” that are “as easy as possible” for the economy to call up and must be of a comparable scope to the state aid in the USA.

We must ensure that we as the EU are not treated worse than our immediate neighbors Canada and Mexico. Chancellor Olaf Scholz

Scholz said it was necessary to formulate a European response to the IRA. “We must ensure that we as the EU are not treated worse than our immediate neighbors Canada and Mexico.” The Chancellor was confident that an agreement with the USA on this subject would be possible in the coming months. At the same time, the “much too bureaucratic” rules for the promotion of companies in the EU would have to be changed.

After the last-minute cancellation by the Council of Ministers in autumn, which highlighted the strained German-French relationship, Berlin and Paris tried to reach unity on Sunday. The need for harmony was also great because Scholz and Macron met with their respective ministers on the 60th anniversary of the Élysée Treaty. The agreement once created the basis for close Franco-German relations.

>> Read also: Less pathos, more projects – a Franco-German plan in five points

In the final declaration, Germany and France pledged to strengthen “our ties in all areas”, especially against the background of the Russian war of aggression against Ukraine. This includes the “strengthening of European defense capacities” with the Franco-German armaments projects.

After agreement on the next project phase for the FCAS air force system, progress must now also be made on the MGCS ground combat system with the tank of the future. “In addition to major armament projects, we agree to intensify joint work in the areas of cyber and space,” it said.

In the energy sector, both countries committed to “invest more in the technologies of the future, especially in renewable and low-carbon energies”. The governments want to work more closely together on wind power in particular “to make the offshore wind potential of the North Sea a cornerstone of competitive electricity prices and hydrogen production”.

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At the same time, the final declaration emphasizes “respect for the principle of technological neutrality” and “recognition of the differences between our respective national energy production” – a reference to the differences in the handling of nuclear power, which France wants to expand. A working group is to clarify how, despite these differences, a common strategy can be found for the production of hydrogen. Germany is also to be connected to the planned hydrogen pipeline from Spain through the Mediterranean to France.

Chancellor and President are calling for Europe to act with more self-confidence

At the ceremony to mark the anniversary of the Élysée at the Sorbonne University, which was also attended by members of the Bundestag and the French National Assembly, Scholz emphasized the Franco-German importance for the EU. Together, both countries are a “compromise machine,” he said. In his speech, Macron said that Germany and France must be “pioneers for a new founding of Europe”, which must involve more sovereignty in energy and defense as well as “innovation and future technologies”.

The chancellor and the president demanded that Europeans appear more self-confident in the world. Both also reiterated their support for Ukraine against the Russian attackers. “Putin’s imperialism will not win,” said Scholz. “We will continue to support Ukraine – for as long and as comprehensively as necessary.”

However, the Chancellor did not mention the Ukrainians’ request to supply them with Leopard 2 main battle tanks, which Berlin has so far not answered. At the press conference, Scholz only said that the federal government wanted to act “closely coordinated” with its allies.

Ukraine’s western allies decided on Friday to deliver large arms. However, it could not be clarified whether and which countries are supplying battle tanks. Scholz also wants the USA to take part in such a step. So far, they have refused to hand over their Abrams main battle tanks to Ukraine. This increases the pressure on Germany to clear the way for Leopard deliveries.

France is currently considering a delivery of Leclerc main battle tanks, the French equivalent of the Leopard 2. “Nothing is impossible,” Macron said when asked if he would comply with Ukraine’s request. His government will also coordinate them closely with the allies, “and then we’ll see in the next few days and weeks.”

More: Less pathos, more projects – a Franco-German plan in five points

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