Schultz is optimistic about the trade truce with the United States in the “first quarter of this year” – POLITICO

German Chancellor Olaf Scholz raised optimism on Sunday that the European Union and the United States could reach a trade truce in the coming months to prevent discrimination against European companies over US subsidies.

Speaking at a press conference with French President Emmanuel Macron following a joint Franco-German cabinet meeting in Paris, Scholz said he was “confident” that the EU and the US could reach an agreement “during the first quarter of this year” to address the measures. Under the US Inflation Act that Europe fears could lead to investments in key technologies being misappropriated away from the continent.

“My impression is that there is a great deal of understanding in the United States [of the concerns raised in the EU]said the chancellor.

Macron told reporters that he and Schultz support the European Commission’s attempts to negotiate exemptions from the US law to avoid discrimination against EU companies.

The new optimism came as the two leaders adopted a joint statement calling for a relaxation of EU state aid rules to boost domestic green industries – in response to the US law. The text said the EU needed “ambitious” measures to increase the bloc’s economic competitiveness, such as “simplified and streamlined state aid measures” that would allow more money to be pumped into strategic industries.

The joint statement also stressed the need to create “adequate financing”. But in a win for Berlin, which has been reluctant to talk about new EU debt, the text says the bloc must first “make full use of available financing and financial instruments”. The statement also includes an unspecified reference to the need to create “solidarity measures”.

EU leaders will meet early next month to discuss Europe’s response to the law to reduce inflation, including the Franco-German proposal to relax state aid rules.

The relationship between Schulz and Macron hit low In recent months, when the French president canceled a joint ministerial meeting that was scheduled for October due to disagreements over energy, finance and defense. But the two leaders have since found common ground on the response to the green subsidies in Washington’s Inflation Reduction Act. Macron said that Paris and Berlin had worked in recent weeks to “synchronize” their vision of Europe.

“We need as much convergence as possible to help Europe move forward,” he said.

But there has been little convergence on how to respond to Ukraine’s repeated requests to Germany and France to deliver battle tanks, amid fears of a possible renewed Russian offensive in the spring.

Asked if France would send Leclerc tanks to Ukraine, Macron said the request was under consideration and there was work to be done on the matter in the “coming days and weeks”.

Schulze evaded the question of whether Germany would send Leopard 2 tanks, stressing that Berlin never stopped supporting Ukraine with arms shipments and made its decisions in cooperation with its allies.

“We have to fear that this war will continue for a very long time,” the chancellor said.

Reconciliation between past and present

The German chancellor and his cabinet were in Paris on Sunday to celebrate the 60th anniversary of the Elysee Treaty, which marked the reconciliation between France and Germany after World War Two. The celebrations, which were held initially at the Sorbonne and then at the Elysee Palace, were a moment for the two leaders to put aside their recent differences.

Paris and Berlin have been at odds in recent months, not only over defense and energy policy and financing, but also Schulze’s controversial €200 billion package to ease energy prices, which was announced last fall without first involving the French government. These tensions came to a head Macron ignores Schulz canceling, in an unprecedented manner, a planned press conference with the German leader in October.

At the Sorbonne, Schultz admitted that relations between the two countries were often troubled.

“A Franco-German engine isn’t always one that rips softly; it’s also a well-oiled machine that can be noisy when it’s looking for compromises.”

Macron said France and Germany should show “new ambition” at a time when “history is collapsing again,” referring to Russia’s aggression against Ukraine.

“Because we have paved the way towards reconciliation,” he said, “France and Germany must become pioneers in relaunching Europe” in areas such as energy, innovation, technology, artificial intelligence and diplomacy.

In terms of defence, Paris and Berlin announced that Franco-German battalions would be deployed in Romania and Lithuania to reinforce NATO’s eastern front.

The leaders also “welcomed with satisfaction” the recent progress on their joint FCAS combat aircraft project, and said they want progress on the Franco-German tank project, according to the joint statement.

The joint declaration also said that both countries are open to the long-term project of EU treaty changes, and that in the short term they want to overcome “stalemates” in the EU Council by switching to qualified majority voting on foreign policy and tax collection.

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