December 23rd. The website of France’s Echo published a report entitled “Lemaire: More Franco-German cooperation will promote economic growth throughout Europe”.
The author is reporter Nino Reynolds, who believes that in this unprecedented economic crisis, France and Germany have carried out more In order to cooperate closely, especially to create a European model of mutual economic cooperation in the face of the crisis. The full text is excerpted as follows:
French Economy Minister Bruno Le Maier visited Berlin on December 9 and 10 to ensure that he can coordinate his actions with German Minister of Economy Peter Altmeier in the stimulus plan and emerging from the crisis.
Learn from the lessons of the financial crisis
Echo: Germany has fought the first wave of COVID-19 well, and France has now controlled the spread of the epidemic well. What are the lessons learned?
Altmeier: The secret of success of Franco-German friendship is that we can learn from each other.
This pandemic is an unprecedented situation, and we should constantly adapt. That’s why Germany has taken some supplementary measures. We need to make greater efforts, and so will it next year.
Lemaire: I am impressed by the same economic response that Germany and France have taken: partial unemployment mechanisms, state guarantees loans, reduction and exemptions of corporate fees, and support funds for small, medium and micro enterprises. We have all arranged these mechanisms according to the situation.
In this unprecedented economic crisis, we have cooperated more closely between France and Germany, especially to create a European model of mutual economic cooperation in the face of the crisis.
Echo: Are you worried about a wave of bankruptcy in the EU in the coming months, which will trigger a new round of banking crisis?
Altmeier: We have learned from the 2008 financial crisis, and this time we have taken a rapid and comprehensive response. Despite the pandemic, the number of bankruptcies is relatively limited.
The longer the epidemic lasts, the more bankruptcies we may face, so it is more important for Germany to learn the lessons of the past six weeks and completely stop the second wave of the epidemic.
Le Maier: We expect the number of bankruptcies in 2020 to be less than in 2019. In order to protect the economy and ensure the cash flow necessary for enterprises, the government has responded quickly and vigorously.
Don’t worry about bank and resident deposits. The latest reform has established a “safety net” under the European Stability Mechanism, which will give depositors additional guarantees.
From opposition to new cooperation
Echo: You two have many joint initiatives in industrial policy. Is French-style government intervention also getting louder within the German government?
Altmeier: The best thing about Franco-German cooperation is to change the long-standing opposition, constantly create some new content, and combine the joint efforts of the two countries.
Airbus was born in the 1960s, which was led by the state. Our new industrial policy is to link state-supported innovation with private enterprise implementation. In other words, the government supports private investment but does not take over the agency. In addition, there is also close cooperation among European partners.
LeMaire: In a few months, we changed the logic of policy and began to invest in key technologies in the future on a large scale.
Take batteries as an example. So far, 85% of our batteries are dependent on imports from China and South Korea, and from 2021 onwards we will produce our own batteries in Europe. We also hope to do it in semiconductors.
Today, Europe accounts for only 10% of the global semiconductor market of 420 billion euros (1 euro or about RMB 8 – this website note). We have reached an agreement with Germany and 11 other EU countries to jointly promote the development and production of chips for mobile phones and computers in Europe.
In addition, through Peter’s European Data Cloud Initiative (Gaia-X) initiative, we will be able to safely store our sensitive data.
Centralized development strategy technology
Echo: How much taxpayers will need to invest if the European chip industry is to compete with Asia and the United States?
Altmeier: To answer this question, you need to find out how many companies are ready to meet the challenge and how much money they want to invest in Europe. The reason for promoting such innovation is clear, because it will create added value and employment opportunities in Europe. However, there is no large Internet platform like the United States or China, and billions of dollars can be invested in the research and development of these technologies.
Echo: Is there such a price to maintain European (economic) sovereignty?
Altmeier: We do not seek to be completely self-sufficient or autonomous, but we cannot accept that most of the value creation of future industries is outside Europe. This will have serious consequences for the prosperity of our countries. That’s why we decided to support private enterprises in selected industries and take strong measures to encourage investment. State subsidies can always be only part of the investment of these enterprises, which can ensure that market economy principles can be respected.
Lemaire: You’re right. There is a price to safeguard sovereignty. However, (economic) sovereignty can allow us to continue to play an important role in the global economy. We should focus on developing the strategic technology that Europe already has powerful enterprises. For example, Italian Semiconductor Co., Ltd. in the semiconductor field, and the French liquid gas company in the field of industrial gas.
You can’t choose between China and the United States.
Echo: What are your expectations for the Biden administration on trade policy?
Altmeier: Our goal is to reach agreement on a practical solution to the Airbus and Boeing problems. I think it is very important for our American friends to resume and deepen European and American cooperation. This also includes solving the problems left over from history.
Le Maire: We should come out of the era of trade conflicts between the European Union and the United States. We are partners, not enemies. On the contrary, if we continue to retaliate against each other, there will be only one winner on the Airbus/Boeing issue – China Commercial Aircraft Co., Ltd.
Echo: Can the European Union and the United States form a united front against China?
Altmeier: Europe cannot be indifferent to the Sino-US conflict. Both sides are Europe’s main trading partners. We should not always think about one or two, but should promote a market-based and equitable global trading system. In particular, it is necessary to make the World Trade Organization work again.
Le Maire: The COVID-19 epidemic has shown that Europe’s sovereignty and autonomy are crucial. Therefore, the task now is to bring some chains in the global industrial chain back to Europe. I think we have talked about such areas: battery manufacturing, semiconductor or space business. Finally, climate objectives should also be considered in our trade mode. Climate warming is a major challenge for all of us.