"More Franco-German cooperation means more growth for the whole of Europe."
Germany – Joint interview given by M. Bruno Le Maire, Minister of the Economy, Finance and the Recovery, and Mr Peter Altmaier, German Federal Minister for Economic Affairs and Energy, to Les Echos – Statements by M. Bruno Le Maire
Berlin, 10 December 2020
Q. – Germany withstood the first wave of COVID-19 well, but France is currently managing to halt the spread of the pandemic more effectively. What lessons do you draw from this?
THE MINISTER – What strikes me is the fact that Germany and France adopted the same economic responses: short-time working, State-guaranteed loans, exemption from business rates and solidarity funds for SMEs and VSEs. And we’re adapting each of these instruments in line with the situation. Out of this unprecedented economic crisis we’ve built even closer Franco-German cooperation, and above all a European economic model of solidarity in the face of the crisis.
Q. – Have Germany’s rigorous fiscal policy and strong exports played a decisive part during the crisis?
THE MINISTER – The reforms Emmanuel Macron has been conducting for the past three years have yielded results: at the beginning of 2020, France had one of the best levels of growth in the Euro Area. The decisive issue for the future of the EU is to return to sustainable growth. This involves continuing the structural reforms and swiftly implementing the €100-billion recovery plan, which is based chiefly on the decarbonization of industry. We obviously need very close cooperation with Germany, particularly in the industrial sectors. More Franco-German cooperation means more growth for the whole of Europe.
EU recovery plan
Q. – The EU agreed a €750-billion recovery plan, but Poland and Hungary are holding things up. Should the other States abandon the principle of the rule of law to save that of solidarity?
THE MINISTER – Poland and Hungary need the recovery fund and those countries are major beneficiaries of European funds. It’s therefore in the interests of people and businesses in those two countries that the deadlock over the recovery plan and European budget is broken as soon as possible. Our unity is at stake; firstly with regard to China, which could emerge as a winner from the crisis and is aiming for greater autonomy; and secondly with regard to the crisis itself, which requires us to show solidarity. Do we want to remain in the global economic race? If so, we need the European recovery plan to come into force as swiftly as possible.
Q. – Do you fear a significant wave of bankruptcies in the EU in the next few months, which would lead to another banking crisis?
THE MINISTER – We anticipate fewer bankruptcies in 2020 than in 2019. The State responded swiftly and on a massive scale to protect our economy and provide the necessary liquidity for businesses. There are no particular concerns regarding either banks or savers’ deposits. The latest reform, which creates a safety net in the European Stability Mechanism (ESM), provides an additional guarantee for savers.
Banking union/European guarantee fund
Q. – Isn’t it time to speed up banking union by agreeing on a European guarantee fund?
THE MINISTER – The priority is clear: to coordinate our economic policies. Peter and I made this choice from day one of the crisis. We’ve got to strengthen this coordination even further. Beyond the immediate response to the crisis, we mustn’t lose sight of the goal of Euro Area integration. Firstly as regards the capital markets union and banking union. The biotechnology sector, with the development of coronavirus vaccines requiring billions of euros of investment, shows us the extent to which innovation needs deep capital markets. Secondly as regards the continuation of work to create a genuine budget for the Euro Area.
Q. – The European budget needs new resources: does the European digital services tax have any chance of seeing the light of day?
THE MINISTER – Digital giants are the first to benefit from the crisis and pay a much lower level of tax than European SMEs. It’s both unfair and utterly inefficient. We still want an international solution as soon as possible, in the framework of the OECD, for fair, efficient taxation of these giants. I hope the next American administration will help us on this. If not, the European Union will have to shoulder its responsibilities and introduce European taxation.
Q. – What are you expecting from the Biden administration in terms of trade policy?
THE MINISTER – We’ve got to leave behind the era of trade disputes between the EU and the United States. We’re partners, not opponents. If we don’t, and we keep imposing retaliatory measures, there’ll be only one winner in the Airbus-Boeing case: the Chinese aircraft manufacturer Comac.
Q. – Can the EU and the United States find a common line vis-à-vis China?
THE MINISTER – The pandemic confirmed to us that Europe’s sovereignty and autonomy are essential. So the task will be to relocate part of the value chains to Europe. I’m thinking of the sectors we’ve already talked about: batteries, semiconductors and space. We must finally take into account the climate goals in the way we trade. Global warming is the fundamental challenge for us all.
Q. – You’ve increased the number of joint industrial policy initiatives. Is French-style interventionism winning the German Government over?
THE MINISTER – We changed the political logic in a few months by investing massively in critical technologies of the future. Take batteries: until now, China and South Korea have supplied us with 85%; from 2021, we’ll be producing them ourselves in Europe. We want to do the same for semiconductors: today, Europe accounts for only 10% of the global market of €440 billion. We’ve agreed with Germany and 11 other EU countries to design and produce in Europe the chips which operate our smartphones and computers. Likewise, thanks to the initiative Peter took with Gaia-X, we’ll be able to stock our sensitive data completely securely.
Q. – How much will that cost the taxpayer before the European chip industry can compete with that of Asia and the United States? (...) Is this the price of European sovereignty?
THE MINISTER – You’re right, sovereignty comes at a price. But it enables us to go on playing a leading role in the global economy. We’re focusing on the strategic technologies in which Europe already has solid businesses. In the semiconductor industry, for example – I’m thinking of STMicroelectronics – and the hydrogen industry – I’m thinking of Air Liquide./.