The EU has faced unprecedented challenges in recent years, with Brexit followed by Covid-19 and the war in Ukraine raising major political issues and sparking a cost-of-living crisis. Reforms introduced after the financial crash have made it more resilient. And following the Brexit vote, member states displayed unprecedented cohesion in divorce proceedings with the EU.
The Franco/German axis was a driving force in these developments. Indeed, EU integration looked to be moving in a new direction during the Covid pandemic. Paris and Berlin were key players in proposals to raise common EU bonds to help the worst-hit member states return to economic growth.
Worryingly, however, relations between Germany and France have become strained and directionless. Last week, Emmanuel Macron, the French president, visited Berlin to discuss with Olaf Scholz, the German chancellor, the mounting risks facing the EU. Instead of underlining a sense of unity and purpose between the EU’s two biggest member states, it highlighted disagreements. A case in point is the recent report by Mario Draghi, the former president of the European Central Bank, on EU competitiveness.
Macron said he supported further common EU debt to fund the estimated €800 billion annually cited by the Draghi report as necessary to maintain competitiveness. Scholz said he was opposed to any further mutualisation of EU debt.
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Meanwhile, Macron said he was in favour of tariffs on EVs from China – subsequently supported by a majority of EU leaders – among other protectionist measures to support the EU economy. Scholz said a free trade approach would be more beneficial.
The EU is not in danger of unravelling because of the stasis between Paris and Berlin, but there is a danger of stagnation. New Spanish proposals to allow a small number of states to proceed to capital markets union, the subject of endless disagreement, are just one sign of the impatience in some capitals. Relations between Paris and Berlin must find a new sense of unity and direction to try to map a way forward on vital issues.