France's fondness for trade barriers goes back over a hundred years, dating back to the Melin Tariff in 1892, which taxed imports of products to ridicule about the country's so-called «strategic yogurt» policy in 2005, when Danone faced the threat of a US takeover.
The international trade policy of Paris has now been transferred to a larger club: the European Union. But instead of dampening the protectionist impulses of the Élysée, membership allowed Emmanuel Macron to pursue policies in a wider arena.
Only this time, the French president declared that it was not France first, but Europe. – with Paris, who is pretty much in the driver's seat.
“The main source of EU protectionism is the Élysée Palace in Paris and Emmanuel Macron, who represent a very Gaullist idea of political control of the economy,” says Fredrik Erickson, director of the European Center for International Political Economy (ECIPE), in his article. Brussels.
In the 2010s, Berlin was the EU's center of power, with Paris and London providing the counterbalance. Germany, with its close economic ties to China, and the UK, with its vibrant international financial sector, favored open trade, while France was more focused on protecting its national leaders.
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But now that the UK has left the EU and Germany's economic woes have weakened, France is using the power vacuum to mold the EU to its image.
Macron says the bloc should focus on sovereignty above trade. and ease EU restrictions to ensure generous support for domestic industry.
Macron's vision of a sovereign Europe was first articulated in a speech given six years ago at the Sorbonne University in Paris.
In it, he called for an increase in the EU budget, a full banking union, and even a European army. He knew that others would give up on the idea of giving Brussels even more power.
“Some will tell you that now is not the right time. But there is never the right moment,” he told an audience seated in the sumptuous amphitheater of the Sorbonne.
It seems that now his time has come. The clearest recent example of Macron's rising power is the French president's decision to publicly intervene in the appointment of US economist Fiona Scott-Morton as chief competition economist at the European Commission.
Macron called the appointment «questionable.» force Scott-Morton to give up her job after she concluded that her position would be untenable. Scott-Morton told The Telegraph she blamed «insecure» France for the debacle.
The planned appointment of Fiona Scott-Morton quickly gained momentum. caused a diplomatic furore. Photo: Frédéric Camallonga/Pompeu Fabra University
Alexandre de Striel, a former Belgian diplomat and professor of European law at the University of Namur in Brussels, says: “What it says about Europe is that Macron was able to influence such a position, which shows his influence and that of France in the Commission.»
Macron's star rose after he played a key role in negotiating a deal for a new European leadership team in 2019, which saw her put at the helm by Ursula von der Leyen.
Her first speech as president-elect of the European Commission drew clear parallels with Macron's speech at the Sorbonne. In it, she called for more collective action on a range of issues, from the climate to a banking union.
De Striel says, “I do this with my students — I ask them to compare texts.< /p>< p>«It's like she borrowed parts of [Macron's speech].»
Erikson says: “The commission, headed by von der Leyen, tried to increase the amount of money that would be allocated in the form of industrial subsidies. France has been calling for this for a long time: a powerful industrial policy that will allow a lot of money to be invested in privileged industries.”
«Sprinkle» is putting it mildly. Official figures show that since March 2022, when rules were relaxed to allow national governments to subsidize the «production of strategic equipment» such as solar panels, batteries and heat pumps, state aid has amounted to more than 650 billion euros (£550 billion). and the production of key components and related raw materials.
Desperate to maintain its industrial base, Germany has become the largest beneficiary, accounting for more than half of the subsidies issued.
Together with France, Europe's two largest economies account for almost 80% of all subsidies issued so far.
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One former Brussels diplomat says: «With the gap left by the UK, some assumed that others non-eurozone countries are stepping up their influence by advocating a less interventionist UK path.”
“That didn't happen, in my opinion. The Danes, Swedes and Poles did not fulfill this role. Instead, the German-French duopoly became more visible. The French and Germans almost always discuss all the problems of the EU among themselves before entering the wider EU platform, and they do their best to come to the same point of view.
“Now this gives them more power than before Brexit, because it is not a counterbalance in the UK.”
Germany's role in the relationship has diminished in recent years as its focus has shifted elsewhere. Erickson says that «the gradual easing has accelerated under the current German government, which is very focused on its own energy transition because it has been stifled by misjudgment about Russia.»
Meanwhile, the global trend towards protectionism has provided the perfect pretext for France to step up its rhetoric.
State-supported industrial policies such as Joe Biden's Inflation Reduction Act and Xi Jinping's «Made in China 2025» represent an attempt to create a future based on sovereignty and security.
The IMF says trade restrictions have «exploded» over the past five years, with subsidies becoming the protectionist measure of choice.
Erickson says few are willing to stand up to Paris.
0109 France, Germany, Covid mail
» Many of these small economies are depleted. They are tired of the avalanche of interventionism that this Commission has created. Some of them are silent because they give priority to other issues.
“As for the Scandinavian countries like Finland and Sweden, if you look at what's happening to the east of them, you'll see this priority number. for these countries, one of them is NATO membership. Priority number two is NATO membership, and priority number three is NATO membership.”
De Striel believes that maintaining the balance of power in Brussels is the key to the future of the EU.
He says: “I think that Europe can only work if [France and Germany] are equally strong and equally influential in political decision-making, because they reflect two different cultures. “There is always a risk that one EU member state will become too powerful and impose its values to the detriment of others. But I still believe that Germany is economically strong enough to exert its influence, so I'm not sure we've reached it yet.”
Erickson believes that Europe is losing focus on economic growth in pursuit of power and influence.< /p>
However, the EU cannot afford to ignore its economy in pursuit of international status in order to compete with the United States. A recent ECIPE study found that European countries would rank among the poorest states in the US if they were part of the union.
Protectionism is even more problematic for the broader goal of improving living standards, warns Erickson.
“Nowhere in history has any country steered its path to economic success. This is not the way to create more prosperity.”
As Macron's influence grows, this is a warning to other EU leaders.
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