PARIS — Europe must create new financial instruments like the coronavirus recovery fund to boost its economic and strategic sovereignty, French President Emmanuel Macron urged on Friday.
Macron issued the plea while speaking to reporters after his first meeting with freshly sworn-in German Chancellor Olaf Scholz, who had come to Paris for his first foreign trip just two days after his inauguration.
Both leaders vowed to use “flexibilities” under the EU’s debt rules to ensure sustained economic growth and finance the green transition. But Macron notably went one step further when he touched on the €800 billion coronavirus recovery fund, under which EU countries for the first time agreed to share limited common debt risk.
“We need the same capacity to innovate and invent appropriate solutions to accompany the coming period,” said Macron.
His proposition is “not a question of pre-empting instruments or returning to the debates we have faced a lot about in recent years,” he added. It’s about responding to the “new environment” the EU is facing, which includes “unprecedented economic and social conditions” following the pandemic.
He also pointed to the need for investments into European sovereignty “that the geopolitical tensions impose on us.”
“We need to find pragmatic ways and good agreements,” Macron stressed.
Such calls for new financial tools, which would most likely involve a broader pooling of debt risk among EU countries, are a red rag in Germany as well as “frugals” like the Netherlands, Austria, Denmark and Sweden.
Scholz, for his part, was more restrained and avoided speaking of new financial tools, but he stressed that both sides could find a common approach.
“I am confident that we will be able to solve the tasks that lie ahead of us jointly,” he said. “After all, it’s about ensuring that we continue to enable and sustain the growth that we have set in motion with the recovery fund, and that we ensure sound finances at the same time.”
“It is possible to achieve both at the same time, and not a contradiction,” he added, referring to “flexibilities” under EU debt rules. “That is what — as far as I understand — also unites us. And to that extent, we will succeed in arriving at common concepts.”
Scholz tried to play down tensions on another difficult issue in current Franco-German relations: The French push to classify nuclear energy as a climate-friendly energy source to attract investment more easily, which Berlin strongly opposes. He tried to frame it as a niche discussion concerning financial investors. “We should put the topic exactly where it belongs,” he said.
Yet in what sounded like an admission that Germany probably won’t be able to stop the French plan, the Chancellor said that countries could come up with different solutions for enabling the green transition.
“It is very clear that each country has its own perspective on how to stop man-made climate change,” Scholz said. “Germany has made a decision for itself. We are focusing on the expansion of renewable energies … and we are concentrating on making our contribution in this way.”
More broadly, Scholz said, both leaders had “a friendly” discussion over lunch in the Élysée Palace. “It’s about how we can make Europe strong … it’s important that we act in the same direction.”
Macron recalled that he had worked very closely with former German Chancellor Angela Merkel, not just on European integration but foreign policy issues such as China or resolving the Russia-Ukraine conflict.
“I know that together, dear Olaf, we will continue this close cooperation,” Macron said.
