Macron Disagrees with Scholz as European Economy Falters

In a Berlin speech, Macron clashed with Scholz over new proposals to boost Europe’s economy. (Free Malaysia Today)

While attending a conference in Berlin last week, French President Emmanuel Macron and German Chancellor Olaf Scholz presented two diametrically opposing views for the future of the European Union. As both represent two of the strongest economies in Europe, such a split could prevent the European Union from making critical economic decisions. 

In his remarks, Macron argued for more protectionist policies, warning that “the EU could die” if they do not act soon. The principal concern behind these remarks is the worry that the EU is falling behind the United States and China. These concerns are not without merit. In the last 30 years, the United States’ GDP has increased by 60 percent. In comparison, Europe’s GDP has only increased by 30 percent. According to Macron, one cause for this difference is overregulation and too little investment. 

These concerns echo those of Mario Draghi, the former chief of the European Central Bank, who, in a recent report, detailed what should be done to increase European competitiveness. According to Draghi, Europe needs to dramatically increase investment spending by 800 billion euros a year. Furthermore, Draghi wants to increase financial interconnectedness between EU member states, arguing in favor of increased joint borrowing. However, like Macron’s, this plan faces disagreements from Germany. 

One solution Macron has proposed is the implementation of higher tariffs against Chinese electric vehicles (EVs). Tariffs would range from 7.8 percent for Tesla cars made in China to 35.3 percent for EVs produced by SAIC, a Chinese automaker. These new tariffs would be in addition to the preexisting 10 percent tariff for imported cars. The goals of these new tariffs would be to protect European auto manufacturers by boosting their profits. Germany continues to oppose such measures,  warning that these moves “must not lead to us harming ourselves.” 

These disagreements come in the face of mounting uncertainties as the war in Ukraine continues to rage on and the U.S. presidential election draws ever nearer. Both have the ability to dramatically change the political landscape of Europe. This is a fact European leaders remain conscious of. Talks between the United States, France, Germany, and the United Kingdom begin next week, where both matters will surely be discussed.