Germany and France are considered the driving force behind the European Union. Economically, however, the relationship was unequal for a long time. After the reforms of the Schröder government, Germany shone as a world export champion and as a strong industrial location. France was seen as incapable of reform, paralyzed by bureaucracy and strike-minded unions.
No wonder French business leaders looked enviously across the Rhine. But times have changed. Today, German businesspeople admire the French government, which “promotes the economy, woos business leaders and aggressively promotes France as a location for innovation and investment,” writes the Economist.
German bosses are frustrated by the dysfunctional traffic light government in Berlin, according to the business newspaper. She is currently struggling with the pitfalls of the debt brake. France, on the other hand, is “reaping the benefits of President Emmanuel Macron’s business-friendly reforms.” No European country currently attracts more direct investment.
“Better Germany”
From the outside, this may come as a surprise, given the frequent and often violent protests against the unpopular head of state, be it from the yellow vests or, most recently, against pension reform. But the superficial impression is deceptive. “France is the better Germany right now,” says Michael Sauga, business columnist for Spiegel.
Immediately after taking office in 2017, Macron began giving his compatriots medicine “that was bitter but healing”: “His popularity plummeted, but the attractiveness of the location increased. France was suddenly seen as a country where politicians pretend to talk.” This is evident from the current key figures.
“Noticeably stronger”
While Germany is the only major economy in the world expected to shrink this year, France is faring better, according to the International Monetary Fund. For the “Frankfurter Allgemeine Zeitung” it is “remarkable that the French economy has grown noticeably faster than the German economy since the recovery from the Corona shock.”
There are a few reasons for this. Germany has become (too) dependent on exports to China and on Russian natural gas. This had to be replaced with difficulty. At the same time, the traffic lights pushed through the nuclear phase-out. Now the economy is suffering from energy prices, while French nuclear energy is relatively cheap.
“Extremely fast” financial assistance
The Macron government also distributed financial aid “extremely quickly,” German lawyer and economist Armin Steinbach, who teaches at HEC University in Paris, told Deutsche Welle: “That made a big difference, even though Germany was proportionate to its Gross domestic product. (GDP) spent slightly more.
In such cases the often deplored centralism of the ‘Great Nation’ pays off. But Macron’s reforms are also responsible for the good economic figures. “He cut corporate taxes, liberalized the labor market, reformed unemployment insurance and recently implemented painful pension reform,” Steinbach said.
A new industrial policy
There are also forums and programs that don’t exist in Germany, such as the annual Choose France investor summit at the beautiful Palace of Versailles, where President Macron brings business giants to justice, including this year the head of Danish pharmaceutical high-flyer Novo Nordisk. Elon Musk received an audience at the Elysée Palace.
Another example is the La French Tech platform, through which start-ups are supported by the Ministry of Economic Affairs in opening up foreign markets. Dirigisme, the infamous French industrial policy, has not disappeared. But here too, Emmanuel Macron is setting new trends with the France 2030 plan that was presented two years ago.
“Battery Valley” in Dunkirk
He wants to make French industry more ecological and innovative with subsidies worth 54 billion euros. These include new nuclear reactors and ‘green’ hydrogen. A Battery Valley will be built in the structurally weak Dunkirk region in northern France. A German-French joint project was inaugurated in May and a factory of a Taiwanese company is under construction.
Emmanuel Macron is always there at such moments. His economic offensive is also a response to US President Joe Biden’s excessive Inflation Reduction Act, which is seen as protectionist in Europe. Under the slogan ‘strategic autonomy’, France must play a leading role in the EU.
Unemployment recently fell to seven percent, the lowest level in twenty years. However, critics point out that growth in France is still lower than in the US or emerging countries. The national debt of 112 percent of GDP and the high budget deficit also pose a major burden.
Germany also remains by far the largest economic power in Europe. But it is not only entrepreneurs and managers who testify to Macron and Minister of Economic Affairs Bruno Le Maire – he has ambitions to succeed the head of state – that they are on the right track. While Germany is “a plea for restructuring” for “Spiegel” columnist Sauga.
Soource :Watson
I am Amelia James, a passionate journalist with a deep-rooted interest in current affairs. I have more than five years of experience in the media industry, working both as an author and editor for 24 Instant News. My main focus lies in international news, particularly regional conflicts and political issues around the world.
