Tag: Industrial Strategy

Macron doubles down on French ‘independence’ amid pension reform crisis

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PARIS — French President Emmanuel Macron drew a connection between his country’s pension reform and Europe’s independence from other countries, during a televised address Monday evening.
“We are a people who intend to control and choose our destiny, who do not want to depend on anyone, neither on the forces of speculation, nor on foreign powers, nor on wills other than our own, and we are right,” Macron said during the 15-minute speech.
The French head of state’s TV appearance was the first time he has addressed the nation since he signed his contentious pension reform — which raises the retirement age from 62 to 64 — into law amid a prolonged political and social crisis.
The president’s reference to independence from “foreign powers” echoed controversial comments he made earlier this month in an interview with POLITICO and French daily Les Echos. On his way back from China, the French president created a stir by saying Europe should avoid being the United States’ follower — including on the matter of Taiwan’s security.
“One cannot declare its independence: It is built through ambitions, efforts at the national and European level, in terms of knowledge, research, attractiveness, technology, industry, defense. And it is also financed collectively through work,” Macron said Monday.
European and French independence, he added, is what will “allow us to obtain more justice” and decrease inequalities.
The bill was greenlit by the country’s top constitutional court on Friday, crushing hopes of opposition parties and unions that the reform could still be stopped.
The French president, who faces the prospect of a gridlocked parliament, said his government would focus on labor, law and justice, and “progress” in the coming months, with Prime Minister Elisabeth Borne expected to present a more detailed roadmap next week.

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( With inputs from : www.politico.eu )

April 17, 2023
German Christian Democrats rewrite Merkel’s China playbook

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BERLIN — Germany’s Christian Democrats, the country’s largest opposition group, are planning to shift away from the pragmatic stance toward China that characterized Angela Merkel’s 16 years as chancellor, claiming that maintaining peace through trade has failed.
It’s a remarkable course change for the conservative party that pursued a strategy of rapprochement and economic interdependence toward China and Russia during Merkel’s decade and a half in power. The volte-face has been spurred by Moscow’s invasion of Ukraine and Beijing’s increasingly aggressive stance — both economically and politically — in the Asian region and beyond.
According to a draft position paper seen by POLITICO, the conservatives say the idea of keeping peace through economic cooperation “has failed with regard to Russia, but increasingly also China.” The 22-page paper, which is to be adopted by the center-right Christian Democratic Union/Christian Social Union (CDU/CSU) parliamentary group in the Bundestag around Easter, outlines key points for a new China policy.

In a world order that is changing after Russia’s full-scale invasion of Ukraine, Chancellor Olaf Scholz last year announced a Zeitenwende, or major turning point, in German security policy. Economy Minister Robert Habeck and Foreign Minister Annalena Baerbock, in particular, have stressed the necessity of a comprehensive China strategy, an idea already mentioned in the coalition agreement to form Scholz’s government. Their ministries have elaborated two different drafts, but a comprehensive strategy is not yet in sight.
“We realize at this point in time, with some surprise, which is why we prepared and presented this paper, that the German government is significantly behind schedule on key foreign and security policy documents,” said CDU foreign policy lawmaker Johann Wadephul.
The foreword to the position paper states that “the rise of communist China is the central, epochal challenge of the 21st century for all states seeking to preserve, strengthen, and sustain the rules-based international order.” The CDU/CSU parliamentary group is open to working out a “national consensus” with Scholz’s government. That consensus, the group says, must be embedded in the national security strategy and in a European China strategy.
The relationship with China is described in the same triad fashion that was formulated by the European Commission in 2019 and is in the coalition agreement of the current German government. Under this strategy, the Asian country is seen as a partner, economic competitor and systemic rival.
But the CDU/CSU group’s paper says policy should move away from a Beijing-friendly, pragmatic stance toward China, especially on trade. “We should not close our eyes to the fact that China has shifted the balance on its own initiative and clearly pushed the core of the relationship toward systemic rivalry,” the text states.
Such an emphasis from the conservative group is remarkable given its long-held preference for economic cooperation and political rapprochement toward both China and Russia under Merkel. Before leaving office, for example, Merkel pushed a major EU-China investment deal over the line, though it was later essentially frozen by the European Parliament due to Beijing’s sanctions against MEPs.
“I say to this also self-critically [that] this means for the CDU/CSU a certain new approach in China policy after a 16-year government period,” Wadephul said.
The paper calls for a “Zeitenwende in China policy,” too, concluding that Germany should respond “with the ability and its own strength to compete” wherever China seeks and forces competition; should build up its resilience and defensive capability and form as well as expand alliances and partnerships with interest and value partners; and demonstrate a willingness to partner where it is openly, transparently and reliably embraced by China.
The CDU/CSU paper calls for a European China strategy and a “European China Council” with EU neighbors for better cooperation. A central point is also strengthening reciprocity and European as well as German sovereignty.
“Decoupling from China is neither realistic nor desirable from a German and European perspective,” according to the text.
To better monitor dependencies, the paper proposes an expert commission in the Bundestag that would present an annual “China check” on dependencies in trade, technology, raw materials and foreign trade, with the overall aim of developing a “de-risking” strategy.

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( With inputs from : www.politico.eu )

March 23, 2023
Dutch PM Rutte wants EU to play it frugal in face of mega US subsidies

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Don’t inject fresh money into the European Union — just reform national policies, says Dutch Prime Minister Mark Rutte.
That’s the best way to prevent EU industry from getting wiped out by U.S. companies under Washington’s major new green subsidies scheme, Rutte told a group of journalists at the office of the Dutch embassy to the EU in Brussels on Tuesday.
“There’s so much money at this moment in the system,” Rutte said shortly after meeting with European Commission President Ursula von der Leyen and Belgian Prime Minister Alexander De Croo. He also argued for deeper reforms, stressing how some European countries spend so much on their pension systems — “all money you cannot spend on innovation and green tech.”
Rutte is often viewed as the key leader of the so-called “frugal” group of European countries, comprised of like-minded fiscally conservative nations. The group, which also includes Denmark and Sweden, has been reluctant to increase national contributions to EU coffers — at least until the coronavirus pandemic forced them to partly adjust that line.
The discussion among EU decision-makers on how to preserve the bloc’s industrial base is taking place ahead of a meeting of EU leaders next month as the U.S. moves to roll out a $369 billion industrial subsidy scheme to support green industries under the so-called Inflation Reduction Act.
The U.S. legislation has stoked fears about consequences for European industry and sparked calls to revisit rules on state aid. Another concern is that such subsidies put the EU’s single market at risk by conferring an outsized advantage to countries with larger fiscal capacity, such as Germany, which have more space to financially maneuver.
Rutte, who was recently in Washington to visit U.S. President Joe Biden, said: “There are a number of consequences to this Inflation Reduction Act (IRA) — but unintended.” The IRA “forces us to think about how we organize ourselves” to remain competitive, he added.
On the one hand, he sees U.S. attempts to meet climate targets as a positive development. On the other hand, he pointed to risks to having a level playing field, like with electric mobility. “Companies might shift investments from the EU to the U.S.,” he said, parroting a much-repeated fear.

But EU subsidies should remain unaltered, Rutte argued. Regarding calls to adapt to the IRA by changing EU aid rules, he conceded: “I can accept some changes as long as they are limited.”
Rutte was clear on his belief that no fresh EU money should be put on the table. “I mean, not grants, but even not loans,” he said. “There’s so much still around” — for example loans in the Recovery and Resilience Facility, the centerpiece of the EU’s pandemic recovery plan.
A draft of the text that leaders would seek to agree on at their upcoming European Council meeting hints at opening up new sources of EU funding. The draft, seen by POLITICO, makes calls “to take work forward building notably on the success of the SURE programme,” referring to the EU’s loans-based program to support employment floated by Rome and others.
Rutte stressed that he would not like to see this proposal in the text, which will be discussed by EU ambassadors on Wednesday.
On the question of whether he’d be in favor of a new SURE program, “My answer would be that we have serious doubts,” he said.
Barbara Moens contributed reporting.

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( With inputs from : www.politico.eu )

January 24, 2023