Paris pushes to bring Berlin onboard with more ‘innovative’ EU industrial policy

by Nick Alipour and Theo Bourgery-Gonse 

There is no time to lose for Germany and France to finally sit down and build an ambitious EU industrial policy which will protect European industries vis-a-vis the US and China, French Economy Minister Bruno Le Maire said on Tuesday, a day before he visits Berlin.

“We’re better off working hand in hand [to develop] a much more proactive [and] innovative industrial strategy” and agree to an EU-wide policy that “better protects our industrial interests relative to China and the US”, Le Maire told LCI on Tuesday.

A source close to the matter told Euractiv that the focus is on improving competitiveness and productivity across the continent, which includes “several levers, including that of professional training and re-skilling”.

The source added that much has already been done to support nascent industries that help speed up the green and digital twin transitions.

But “is this enough? No”: “it is high time France and Germany agree on a joint industrial strategy […] there is not a single day to lose”, Le Maire said.

Relaxing state aid rules in response to Russia’s invasion of Ukraine and the US Inflation Reduction Act (IRA) has greatly benefited Germany, with risks higher than ever that the EU Single Market’s integrity is under threat.

Le Maire’s comments come a day before he is expected to be in Berlin, where he is due to meet Robert Habeck, Vice-Chancellor in charge of the Economy and Climate Policy, and Finance Minister Christian Lindner, ahead of a joint press conference.

The bilateral meeting between the EU’s two largest economies was formalised by the Aachen Treaty, signed in 2019 by French President Emmanuel Macron and then German Chancellor Angela Merkel to promote economic ties between the two nations, particularly in economic and foreign policy.

But relations between the two countries have been strained ever since Scholz took office – with Scholz’s distant approach to Paris raising fears of a Franco-German ‘interregnum‘ and an era of stagnation.

Both have also pulled off a series of symbolic gaffes that have not helped their image: In June, French protests against police brutality forced Macron to cancel the first official visit to Germany by a French president in 23 years.

A Franco-German Council of Ministers was also cancelled at the last minute by the Elysee last October, as significant disagreements laid bare on key issues such as the status of nuclear energy, EU fiscal rules and defence matters.

That said, both sides have been keen to dispel doubts with public demonstrations of the unique nature of the relationship, including Macron’s visit to Potsdam, the Chancellor’s private residence, in June, which was branded as a special honour and a rare private meeting between the two leaders.

Berlin says EU should get used to global south’s rise

On a foreign policy level, the two countries have aligned regarding Russia’s invasion of Ukraine but do not exactly share the same vision of a geopolitical Europe and France’s push for Europe’s strategic autonomy.

Last June, Scholz was criticised by conservative opposition leader Friedrich Merz for not coordinating with France and other EU partners over the content of Germany’s first-ever national security strategy.

On Tuesday, Scholz called on Europeans to get used to the rising power of countries in the so-called global south.

The G20 meeting New Delhi last weekend adopted a resolution condemning “the threat or use of force to seek territorial acquisition,” though without mentioning Russia’s invasion of Ukraine.

For Scholz, the joint resolution resulted from collaboration with countries from Africa, Asiaand North and Latin America.

Similarly, German Foreign Minister Annalena Baerbock told Frankfurter Allgemeine that countries such as South Africa and Brazil were increasingly aware of the conflict’s “fatal consequences” while China no longer isolates itself from Russia.

Nevertheless, Scholz remained wary of the future challenges of international collaboration.

He predicted that America and European countries would have to get used to accommodating a diverse range of viewpoints, warning that the world ahead “was not about the West or anyone else” but “will simply be more multipolar.”

*first published in: Euractiv.com