Are Germany and France allies

Dispute between EU countries : Why is the Franco-German relationship so shattered?

Germany and France have agreed on a joint proposal for a budget for the euro zone. The result is a four-page paper that is available to the Tagesspiegel and that is now to be discussed with the other euro countries. But in many other places there is a stuttering in relations between the two neighboring countries. What does the compromise look like? And where are the issues in the Franco-German relationship? An inventory.

A budget for the euro zone?

Germany and France are now - surprisingly - on one side of the euro zone budget. For a long time Paris and Berlin were of the opposite opinion on this issue too. Macron would like the joint budget to support member states in the event of an economic downturn. It is also intended to help countries like Greece to catch up economically with the stronger euro countries. When Macron first presented this plan in 2017, there was loud criticism from Berlin. In Germany, people simply did not believe in setting up a second budget in addition to the EU budget - with which EU budget rules could then be circumvented.

Federal Finance Minister Olaf Scholz (SPD) has now reached a compromise with his French colleague Bruno Le Maire. This provides for a euro zone budget, which should, however, be part of the EU budget. Scholz and Le Maire have also come to an agreement on the question of how the funds should be used. Germany only wanted to release the funds if the states comply with the reforms demanded by the EU - France saw it more loosely. Their joint proposal now also provides for the financing of projects that are "preferentially" linked to reforms.

From the community

France is about effectiveness and clout, Germany is about inclusion, i.e. about persuading the remaining 25, sometimes very unwilling EU members to show more solidarity, please. That already shows the whole dilemma.

... writes user Gophi

Different interests in the trade dispute with the USA

Cars against soy, wheat and chlorinated chickens? This is roughly how the current situation on the EU side is assessed in the German auto industry: Trump will not impose any punitive tariffs on German cars if US farmers can more easily export their products to the EU. The Germans benefit from the waiver of customs duties, because no other country delivers so many cars abroad, the export share is around 75 percent. Countries with a strong agricultural sector, such as France, are suffering from higher imports of American food. French farmers have shown up on the Champs-Élysées with tractors more often and like to leave a lot of dung there.

After the yellow vests also the farmers - Macron absolutely wants to prevent that. The German car industry understands this and speaks of “two markets”, ie car and agriculture, which EU Trade Commissioner Cecilia Malmström must keep an eye on in talks with the USA. In any case, lists of the USA with all possible agricultural products had been circulating in Brussels for a long time.

Meanwhile, the auto industry itself uses the German-American Chamber of Commerce and the American Manufacturers' Association, among others, to underline its strong importance in the USA: German manufacturers and their suppliers alone have created more than 113,000 jobs in around 300 factories in recent years and introduced the dual training system, which is highly praised around the world. VW and Mercedes, Audi, Porsche and BMW not only export from Germany, they are also the largest exporter from the USA. That doesn't matter to Trump, however, if he wants to use cars as leverage for higher agricultural exports.

Common European Defense Policy

In almost all projects of deeper cooperation in European security policy, a difference in interests between France and Germany becomes apparent. Germany would like to use them to promote political cohesion in the EU. France, however, in order to increase the military usability and efficiency. In the deepened permanent armaments cooperation under the abbreviation Pesco, Germany was about "inclusivity": as many EU states as possible should participate.

France's goal, on the other hand, was “effectiveness”: not too many participants, but few who want to act. As Pesco grew to include 26 participating states, Paris made a new proposal, the "European Intervention Initiative" (EII). Only the large EU states that have something to offer militarily should take part. They are supposed to set up units for military intervention.

Trouble with arms cooperation

The dividing lines between Paris and Berlin run similarly in joint armaments projects. Germany is striving for European projects for political cohesion, France is about clout. Europe builds far too many different models of fighter jets, helicopters, tanks, armored transports, warships, etc. That is why the money that is available is being spent inefficiently. However, when it comes to the necessary merging of armaments factories, each country fights for its own locations and the jobs of the workers there. One would have to agree on how the orders are to be distributed to other EU countries. Poland has a strong arms industry.

Tensions between France and Germany also arise from the interplay between production, financing and export of joint armaments. They want to develop and build a new combat aircraft and a new battle tank together. However, Germany has not yet taken the necessary funds into account in its financial planning. There are amounts that are sufficient to initiate the development. The financial requirements also differ considerably, depending on whether you are only building for your own needs or whether you are exporting the jet and tank in larger quantities. Then the price per piece drops significantly. But for that, Germany and France would have to agree on common export guidelines. That has not yet succeeded either.

All in all, there is growing annoyance about the Germans in Paris. Some French are already considering whether it might be better to plan “German-free”: without the difficult partner. The political hurdle not only to threaten these alternatives in silence, but to put them into practice is high.

Different ways in China politics

It is true that Germany is now taking a much more critical stance in its China policy and is distancing itself from a policy that has long been focused almost exclusively on improving market access for German companies in China. As before, however, France's policy on China is much more confrontational than Germany's. Again and again Emmanuel Macron chose sharp words, he justified his call for a European army with the defense against China and, in connection with the Silk Road initiative, spoke of the fact that no “vassal states” should emerge. The different approach can also be seen in dealing with the Chinese telecommunications provider Huawei. Germany is still undecided how it will deal with Huawei's participation in the tender for the 5G network. The French government wants to legally stipulate subsequent anti-espionage controls for the installed technology - and only failed at the French Senate for the time being. Another example of France's tougher stance: France and Great Britain have sent combat ships into the South China Sea and are supporting the US mission there, which is supposed to counter Chinese territorial claims.

No agreement on arms export controls

In the Treaty of Aachen, Germany and France agreed to “develop a common approach to arms exports”. As the "Spiegel" reports, the two states have also agreed not to "prevent" exports to third countries. In the specific case, however, this will be difficult, as the arms exports to Saudi Arabia show. After the murder of the Saudi journalist Jamal Khashoggi in the Saudi embassy in Turkey, Germany suspended its exports to Saudi Arabia in October 2018. France continues to sell armaments to Saudi Arabia. Riyadh is the second largest buyer of French armaments.

The German export ban, however, also prevents the export of individual components that are built into joint European armaments, such as missiles with which Saudi Eurofighters are equipped and which are manufactured by a joint subcontractor of Airbus, the British armaments company BAE Systems and the Italian company Leonardo become. The German export policy has an impact on the exports of other European countries. Airbus boss Tom Enders had therefore only recently publicly denounced Germany.

Germany, on the other hand, is bound by the coalition agreement between the CDU and the SPD, with which the two partners have agreed not to export any more armaments “to crisis regions”. The export to Saudi Arabia is therefore controversial anyway, since Saudi Arabia is involved in the Yemen war.

Opponent in the European election campaign

In May, the Europeans will elect a new parliament - and Emmanuel Macron and Angela Merkel will face each other indirectly in the election campaign. Angela Merkel supports the top candidate of the conservative EPP parliamentary group, the CSU politician Manfred Weber - and with him the whole system of "top candidates" in European elections. The top candidates are also candidates for the post of head of the commission, Manfred Weber would be the first German to head the commission since Walter Hallstein, who held office from 1958 to 1967.

Emmanuel Macron's new movement party “La République En Marche” (LREM), on the other hand, is still toying with joining the Liberal Group in the European Parliament, the ALDE Group. The European liberals, however, are against the Spitzenkandidaten system and will probably not run with a Spitzenkandidaten (and thus a candidate for the post of Commissioner), but with a "team" that is to be presented in March. Macron's new movement party is running for the first time in the European elections. Party leader Stanislas Guerini recently called the ALDE parliamentary group his “natural ally”.

Digital tax

The fact that corporations like Google, Facebook or Amazon do not pay enough taxes in Europe is not a new problem, but one that is difficult to solve. The signal from the Franco-German intergovernmental consultations in Meseberg in summer 2018 should be: Germany and France will agree on a concept for the taxation of digital companies by the end of the year, after which a compromise can be found at EU level. But nothing came of it. Federal Finance Minister Olaf Scholz (SPD) apparently feared that the plans, which were being pushed forward by France and the French EU Commissioner Pierre Moscovici, could damage the German economy, which is strong in exports. Scholz would rather tax the advertising revenues of platforms than a so-called virtual permanent establishment.

What was left of Meseberg's commitments: Instead of a solution at EU level, the French Economics and Finance Minister Bruno Le Maire decided to single-handedly introduce the tax at the turn of the year. At EU level, it does not look like a solution can be found before the European elections in May. These days Scholz only speaks of a taxation model at the level of the OECD countries - until 2020.

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