Europe is facing a "geopolitical and geoeconomic emergency," Emmanuel Macron says. If the continent does not invest more in its economy and remove obstacles to growth more quickly, it will be "swept away" by technologies from America and imports from China.
That was the French president's message to other European leaders in an interview with The Economist and six other newspapers on February 9, writes the London-based Economist.
He was speaking ahead of a European Union meeting on February 12 to discuss boosting the bloc’s competitiveness. Many European leaders share his sense of urgency, but the question is whether they agree with his solutions. In a sign of how divisive the debate could be, the leaders of Germany, Italy, Belgium and several other countries have called a “pre-summit” ahead of the main meeting. Mr. Macron has agreed to join them.
The French president's call for Europe to accelerate economic growth and reduce dependence focuses on four points.
First, he advocates greater simplification of the multitude of regulations for which the EU is rightly known, according to The Economist.
Second, Macron wants Europe to diversify its suppliers to reduce its reliance on a narrow circle of non-European service providers. This, he says, should include everything from strengthening the international role of the euro, for example through the development of euro-denominated currency swap lines with trading partners, to reducing dependence on key resources from abroad, such as American natural gas and cloud computing.
Third, Macron advocates a policy of "European preference" to protect the Union's "critical industries," such as steel, chemicals, and defense.
This includes tying state subsidies to a minimum share of European inputs, depending on the sector, as well as implementing the "buy European" rule in public procurement.
Finally, the French president wants significantly stronger EU pressure on investment in innovation, both public and private, in line with the recommendations of a report written in 2024 by Mario Draghi, former president of the European Central Bank.
Macron would like to see the launch of "Eurobonds for the future", which would invest in defense and security, green technologies and artificial intelligence, partly relying on the high savings rate of Europeans, according to The Economist.
Similar calls for European reform have been made many times, but Macron is not the only leader who now feels a greater sense of urgency. The French president calls it a “Greenland moment”: Europeans are starting to understand the seriousness of the stakes. There is a risk, he warns, that the initial shock – as Europeans fear that America is abandoning them – will turn into a “cowardly sense of relief” when the crisis is over. That would be a mistake. Europe now faces an “openly hostile” US administration that wants to “dismember” it. “Everyone must understand,” he says, “that the crisis we are experiencing is a profound geopolitical rupture.”
On some issues, the EU is already moving in France's direction. For example, "SAFE," the EU's new joint defense procurement scheme, requires—at French insistence—that at least 65 percent of the components of many of the systems it finances must come from EU member states or those with which it has association agreements.
Macron will have a harder time getting agreement on the European preference rules. France is facing resistance because it wants strong rules that favor European firms under the EU’s “Industrial Acceleration Act,” which is being negotiated by Stephane Séjournais, the European commissioner for industry (and a longtime friend of Macron’s). Germany and Italy fear that this could amount to protectionism. The Baltic and Nordic countries, along with the Netherlands, have jointly warned that such rules risk “undoing our efforts at simplification” and “pushing investment away from the EU.” The law could be a “game-changer” and “a big win for France,” says Mujtaba Rahman of consultancy Eurasia Group, “but there are still concerns that this is French protectionism disguised as strategic autonomy.”
Macron rejects these accusations.
"I don't think this is protectionism at all," he claims, emphasizing that he simply wants to spare European companies by "not imposing on them the rules that we don't impose on importers."
The French president has again stressed the importance of European cooperation, reaffirming his support for a troubled joint air defense program. The Future Combat Air System, a joint project between France, Germany and Spain, is expected to include a sixth-generation fighter jet, autonomous drones and a communications "combat cloud." After years of bitter tensions between the companies involved, many analysts have written it off.
"We think it's a good project and I haven't heard any German comments suggesting it's not good," Macron insists.
Moreover, it wants to attract additional European partners to create systems competitive with the American ones, writes The Economist.
Ultimately, Macron argues, Europe should not underestimate its strengths: a market of 450 million people, but also a region governed by the rule of law. The challenge is to turn these strengths into levers of geopolitical power, before other powers move so far ahead that Europe can no longer match them. It is precisely the concern that Europe is being excluded from the maneuvering of the great powers that recently prompted Macron to send his diplomatic adviser to Moscow. He returned, predictably, with the message that Russia is not interested in peace.
There will be much skepticism about some of Macron’s appeals. His domestic political position is weak. He has no majority in parliament, and he has only 15 months left in office to push his ideas through. There is consternation in many European capitals that France refused in January to support the EU-Mercosur trade deal with Latin American countries, just as its leader was advocating diversification of European trade in the name of strategic autonomy. But few dispute Macron’s warnings that Europe is too slow and too fragmented – and that it is running out of time to fix its problems. And so is he.
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