An era of rearmament has begun in Europe. Countries like Germany and France are spending previously unimaginable sums on defense. They do this because Vladimir Putin forces them to. With his war of aggression against Ukraine, the Russian president is also threatening the EU’s achievements: peace, security and prosperity. Seen this way, rearmament is an act of self-protection. The only problem is: the money has to come from somewhere.
In the best case scenario, a strong economy would ensure that Europe can afford military spending. But the continent’s major economies are not strong, they are weak, especially Germany’s. So it is time for a joint European effort. A new growth pact is needed – a pact for Europe.
That’s easier said than done. Because the two states that would be needed for this are too busy with themselves. In Germany, the Chancellor must be careful not to tear up his traffic light coalition in the upcoming budget negotiations. In France, on the other hand, the president is trying to somehow keep his compatriots happy – but in doing so, the state’s finances are increasingly slipping away; The head of the French central bank speaks of a “time bomb”.
This German-French self-centeredness is fatal, because in the history of the EU it has always been Germany and France who have been there when it mattered. Now, in the year of the European elections, it would be that time again. An unpredictable aggressor rules in Russia; an economic superpower is emerging in China; and in the USA there is a threat of the return of the protectionist Donald Trump.
The European Community must therefore do everything it can to maintain its place in the world. The EU internal market is still the largest free economic area in the world – this must be preserved. It won’t be easy, because Chinese companies are pushing into the European market. They offer what German and French companies don’t (yet): cheap but technically sophisticated electric cars. This is good for everyone who doesn’t want to spend too much on an electric car in Europe. On the other hand, the success of Chinese companies threatens the jobs of European car companies such as VW and Stellantis.
And if that weren’t dangerous enough, Trump could move back into the White House and impose high tariffs on imports of European goods. There is great concern in Brussels that he could also threaten to withdraw the USA’s nuclear shield from Europe if the EU does not do what he says.
Berlin should support a European investment program
So what to do? Berlin and Paris must act – together. As is often the case, a compromise is needed at the European level. France should stop torpedoing the free trade agreement with Mercosur and push forward trade negotiations in the Indo-Pacific region, especially with India. In return, the government in Berlin should support a European investment program. Quite simply, to achieve geostrategic goals with economic tools.
The EU chip law can only be a start. More semiconductor and battery factories are needed to make European industry more independent of authoritarian states. A comprehensive investment program would also benefit the Federal Republic. German companies have new orders; and urgently needed investments could finally be made that are not possible because of the debt brake.
An open society like Europe’s needs growth. Only those who are economically strong can assert themselves worldwide.