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July 2018

Post-European Council: What Franco-German Perspectives for Europe?



The European Council of 28 and 29 June 2018 postponed the discussions on the reform of the Eurozone to next December. In this context, Institut Montaigne and the Genshagen Stiftung organized on Thursday 12 July a debate on Franco-German perspectives for Europe between Peter Altmaier, German Federal Minister of Economic Affairs and Energy, and Henri de Castries, President of Institut Montaigne. This discussion was moderated by Nicolas Barré, Editorial Director of Les Echos.

The Franco-German couple: an essential relationship for European integration

Since the end of the World War II, the Franco-German relationship has been the very foundation of European integration. It is all the more crucial today: we need a new European dynamic, gathering all Member States of the European Union (EU) around a common purpose. According to Peter Altmaier, the Eurozone, i.e. the compromise on the reform reached on 19 June between Emmanuel Macron and Angela Merkel, has been a first step in the right direction.. However, it will have to prove its ability to lead the remaining 17 countries that share this common currency.

Trade issues call for a common European response

The establishment of a customs union in 1968 was one of the first milestones in the construction of Europe, and trade policy is currently an exclusive prerogative of the EU. Recent US protectionist measures require a common and strong European response. The situation also calls for an effort of pedagogy on the part of the Franco-German couple. On the one hand, they need to explain that any trade war is a zero-sum game, a negative one even. On the other, it needs to avoid the confusion between a Europe able to protect and a protectionist Europe.

The competitiveness of European countries will be determined by their position in the new technology markets

Major technological revolutions, such as that of artificial intelligence or autonomous cars, are about to disrupt our economies. Europe is now lagging behind in several cutting-edge sectors. However, their ability to embrace innovation will be decisive for the competitiveness of tomorrow's economies. A Franco-German initiative, similar to the Airbus group model, is needed to address these issues. It should aim to create and consolidate a new industrial player, able to promote artificial intelligence across Europe and compete with GAFAMs (Google, Apple, Facebook, Amazon, Microsoft).

The first steps towards an autonomous European defence integrated within the Atlantic Alliance

After the Franco-British intervention in Suez in 1956, the American war in Vietnam between 1955 and 1975, and the American intervention in Iraq in 2003 - disapproved by France -, Donald Trump’s accession to power in 2017 marked the fourth crisis in the history of the Transatlantic Alliance. Refuting the American President's idea - first expressed during the NATO Summit in July 2018 - that European countries should spend 4% of their GDP on military spending, Altmaier nevertheless confirmed the need for Germany to increase its defence spending. He also recalled the Allies’ commitment during the 2014 NATO Summit to increase this expenditure to 2% of GDP. The survival of NATO is in the interest of all 29 Member States, 22 of which are also EU members. Europe nevertheless has a duty to develop autonomous capabilities and means of defence, which involves pursuing the European Intervention Initiative project.

Convergence regarding environmental and energy issues

Protecting the environment is certainly the greatest challenge of our times. The Paris Agreement is key in this respect. Following the Fukushima disaster in 2011, Germany chose to abandon nuclear power at the request of its citizens. France, although it is currently undergoing a full energy transition, still promotes this solution. Despite their differences, France and Germany must be the driving forces fostering the deepening of the internal energy market at a European level.

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