BRUSSELS — Maybe the Franco-German economic engine will soon sputter back to life after all.
Germany’s likely next chancellor, Friedrich Merz, can be good news for the European Union, France’s newly appointed Trade Minister Laurent Saint-Martin told POLITICO, after years of friction between Paris and Berlin and looming fractures across the bloc over how to deal with the United States and China.
“We can also look at the rather pro-European character of this would-be chancellor … There are also good reasons to be optimistic,” Saint-Martin said on a visit to Brussels on Friday, in one of his first interviews since taking over the portfolio in late December.
“What’s certain is that France’s position on this issue will not change: We need a strong Germany, [which, together] with France, thinks about a Europe that invests; in a Europe that protects; and a Europe that once again thinks about its industrial future and its own sovereignty,” he said.
Much will depend on the result of the early German election on Feb. 23, Saint-Martin cautioned.
Merz and his center-right Christian Democratic Union currently lead on 31 percent, well ahead of Chancellor Olaf Scholz’s center-left Social Democratic Party on 16 percent, according to POLITICO’s Poll of Polls. Scholz’s “traffic light” coalition of Greens, Social Democrats and the Free Democratic Party collapsed in November amid acrimony over spending and economic reforms.
The far-right Alternative for Germany is polling in second place on 20 percent, but Merz is clear he will never enter into a coalition with the populist, anti-immigrant party.
The CDU leader said last week that the EU should reconsider sealing a broad trade deal with the United States — harking back to ill-fated talks on the controversial Transatlantic Trade and Investment Partnership a decade ago.
Talks with Washington fell through in 2016, over concerns in the EU that its market would be flooded with chlorinated chicken; workers’ rights would be undermined; and state health services opened up to American companies.
Red lines
Resuming the free-trade talks with Washington would be a red line for France and put Paris and Berlin at odds. Still, Merz’s more critical tone toward China, which contrasts with the fealty shown by Scholz and longtime CDU Chancellor Angela Merkel, might bring Berlin closer to the position defended by Paris and the European Commission.
A closer relationship between the two countries might also help ease their major differences on how to deal with China. France has advocated for a tougher approach, which includes “Buy European” measures in public tenders, but also tariffs on subsidized Chinese imports. Germany, which has closer trade ties with China, has been more cautious, fearing a trade war with Beijing.
The divergence between the two peaked when Brussels imposed tariffs on imports of Chinese electric vehicles last fall, delighting France but disappointing Germany, which voted against the measure on concerns that its carmakers would suffer Chinese retaliation.
Saint-Martin, who hails from President Emmanuel Macron’s liberal party, has already worked on trade as head of Business France, the country’s organization in charge of helping French companies to export and attracting foreign investors.
Until a few weeks ago, he was a junior minister in charge of an even harder task: putting together a budget for 2025 that would reduce France’s massive deficit while getting the nod from a fragmented parliament — the budget was not adopted as Michel Barnier’s government collapsed last month precisely over that file.
His comments come amid a wide Franco-German divergence on Europe’s economic agenda and especially on the bloc’s two main trade files: the trade agreement with South American countries of the Mercosur bloc struck in December, and mounting trade tensions with China.
Germany is one of the top supporters of the Mercosur agreement, seeing it as a golden opportunity to export more goods to a region that is increasingly courted by China. France is the fiercest opponent of a deal that is hated by its farmers, who fear competition from South American imports, but also environmental NGOs and parties across the political spectrum.
“The way in which the agreement was signed did not suit us, and the French demands were not taken into account,” Saint-Martin said, referring to a trip in December by European Commission President Ursula von der Leyen and the EU’s trade chief Maroš Šefčovič to seal the deal in Uruguay just hours after the last French government had collapsed.
“We absolutely do not consider that what has been agreed today is valid for us,” he stressed, pointing out he raised the issue in his meeting on Friday with Šefčovič.
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