Economy

France is increasingly becoming a nightmare for the German economy

French President Emmanuel Macron.

Francois Maori, Pool, AFP via Getty Images

When Emmanuel Macron was still an election campaigner and not president, he seemed to be a feast for the rights of France. Then Marine Le Pen and Co. tried to turn the former Rothschild banker into the monster of global laissez-faire capitalism. In their view, Macron stood for nothing less than the sell-out of national interests.

The corona crisis shows that Le Pen and Co. were thoroughly wrong. Macron is often a protectionist and interventionist when it comes to the French economy. Then he has no qualms about linking state aid with strict state requirements and enforcing guarantees for French plants and employees. Then France should become the “leading manufacturer” of clean cars and not Europe. What Macron is currently demanding of the French economy would be nothing short of a horror scenario for Germany’s economy.

Lufthansa wants to avert Air France’s fate

Airlines, for example: In the tough scramble for state aid and state participation, German Lufthansa may also have considered Air France as an example. The French government quickly made it clear to its largest airline, which was in need of Corona: if you want our support, you must also meet our conditions.

Means: drastically reduce CO2 emissions, use carbon-neutral fuel significantly more and cut down on climate-damaging domestic flights, also to make the state-owned railway company SNCF less competitive in French long-distance transport. On Wednesday, Air France subsidiary Hop announced it would cut 40 percent of its domestic flights by 2021.

Lufthansa seems to have averted such a fate. The state should also join her, in this case the German one. Provided the EU agrees to the whole thing, which is uncertain due to the ongoing dispute over important take-off and landing rights. The Federal Government only wants to use its influence if a third party tries to take over Lufthansa.

Otherwise, she says she wants to keep out of business decisions as much as possible. This should also make sensitive personnel decisions that could cost the job to thousands of Lufthansa employees. “The state is not a good entrepreneur,” economics minister Peter Altmaier justified in the “Today Journal” interview.

France: Macron puts pressure on Renault

Macron also pushed ahead with the topic of auto aids. He promises the French car industry eight billion euros, including car premiums that German industry would like. But this money also comes with conditions.

“Certain products will have to be manufactured in France in the future and not in low-wage countries,” said the president. He means important parts for modern drive technologies, especially batteries. Because France is to become the number one e-car industry in Europe in five years. So the president wants it.

In particular, the two domestic car manufacturers Renault and PSA are under obligation, not only to produce in France, but also to prefer French suppliers.

Macron is putting pressure on Renault in particular. The car maker not only belongs to 15 percent of the French state, but also needs a state-guaranteed loan of five billion euros.

In return, Renault should continue to operate French plants that it actually wanted to close. It is said to produce electric motors in France, although a plant in China was planned. And it has to promise to quadruple the production of electric cars by 2024.

Renault will not be able to avoid a billion-dollar savings plan to be presented this Friday. There are plans to cut up to 15,000 jobs.

Read also: The Renault case and the great fear of the German car giants

Strong state: Voices are also getting louder in Germany

The reaction of the powerful association of the German automotive industry to Macron’s plans was remarkable. President Hildegard Müller emphasized that it is important to reconcile the economy and climate protection. She also welcomed “a premium that boosts overall broad demand for environmentally and climate-friendly vehicles.”

On the other hand, she did not accept Macron’s conditions. For good reason: From the point of view of the German auto industry, the state has to stay out of the way when it comes to making business decisions about locations, personnel and future technologies. This also applies in times of crisis.

The federal government still seems to see it similarly. Reluctantly, she agreed to the deal with Lufthansa. Reluctantly, she speaks of further partial nationalizations. And yet in the Federal Republic, too, voices for more state and less economy are getting louder. And they no longer come only from trade unions and left-wing parties, but also from within the Union.

Entrepreneurs France? Macron gets praise

Even before Corona, Economics Minister Altmaier (CDU) campaigned for a more active state industrial policy in global competition in order to maintain or promote “key technological competencies” in Germany. In his “National Industrial Strategy 2030”, he defined the exceptional cases in which the state could participate in strategically important companies.

The criticism was great. The state should set framework conditions for fair competition, it echoed back from business associations. But he shouldn’t become an actor himself. So Altmaier cut the most controversial points out of his paper.

It makes it easier for Macron. The French traditionally see the liberal economic model much more critically than in Germany. The call for the state is also heard much faster in France. In fact, there was no big outcry in the French auto industry after Macron’s appearance. Instead, he received praise from the French automobile association FIEV. The commented on Twitter: “A necessary solidarity pact between the state, companies and employees in order to [Autosektor] to get going again. “

Read also:
Lufthansa, Deutsche Bahn, Commerzbank, VW: Is the state really always the worse entrepreneur?

Europe’s bright leader? Macron’s big dream threatens to become an air number

Fall of a giant: when big companies fail

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