60 Years Of The Elysee Treaty: What Next For Franco-German Engine – Analysis

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By Ankita Dutta

France and Germany signed the Elysee Treaty on 22 January 1963 with the aim to “end a centuries-old rivalry” and reinforce the idea that “cooperation between the two countries constitutes an indispensable stage on the way to a united Europe”. This treaty led to the foundation of the Franco-German engine for European integration for the next 60 years. Six decades later, Europe presents a very different picture—the USSR has disintegrated, Germany is unified, the United Kingdom (UK) has joined and left the European Union (EU), Eastern European countries are now part of the Union, and war has returned to the continent.

As France and Germany celebrates 60 years of the signing of the Elysee Treaty, their partnership has been put to test with the war in Ukraine. This conflict has highlighted the limitations of their engagement with Russia and the failure of the Minsk Agreements signed in 2014 of which both Paris and Berlin were key architects. Moreover, their own respective responses to the crisis have been viewed as ‘not enough’ by their allies, especially in Eastern and Central Europe. Differences have emerged between Paris and Berlin on how to manage this crisis and address the pressing issues related to energy, defence, economy, etc. This has raised the question: how healthy is the Franco-German engine?

Perils in Franco-German engine

Fissures in the relationship between Paris and Berlin were visible prior to the crisis in Ukraine. The leadership change in Germany in 2021, after 16 years led to a change in the equation between the two countries. While the new German government establishes its rapport with other countries, France has continued with its efforts to strengthen relations with other key nations in Europe. For example, it signed the Quirinal Treaty with Italy in November 2021. This treaty’s core objective, similar to that of the Elysee Treaty, is to form a strategic alliance between Paris and Rome. It provides each side with a new political tool to help overcome disagreements at the bilateral and European levels and to ensure greater coordination on common priority areas before EU leadership summits. Paris also signed a defence agreement with Greece in October 2021 which includes a mutual assistance clause in case of an armed attack against either and a bilateral friendship treaty with Spain in January 2023 to reinforce their ties on issues such as migration, defence, and energy.

With the crisis in Ukraine, while Germany and France have presented a united front, with both Chancellor Olaf Scholz and President Emmanuel Macron committing to ‘unwavering support’ to Kiev but differences over how to resolve this crisis and its impact have started to emerge. These are largely due to different strategic outlooks towards the crisis but these have raised concerns regarding the vitality of the Franco-German partnership in pushing a European agenda.

One of the key areas of divergence is the energy crisis in Europe which was further exacerbated by the Ukraine crisis. The divisions between France and Germany emerged largely due to their differing dependence on Russian energy resources and what is perceived by France as unilateral actions by Germany to safeguard its energy security at the cost of European unity. While Germany had considerable dependence on Moscow for its energy resources, France had no such compulsions. This is primarily because France obtains almost 70 percent of its electricity from nuclear energy, whereas Germany imported ‘a third of its oil, around half its coal imports and more than half its gas’ from Russia and had decided to phase out nuclear energy after the Fukushima catastrophe in 2011.

This led to increasing friction between the two countries as they announce measures to sanction Russian energy and find alternatives. France has also accused Berlin of not consulting Paris before announcing an energy support package of €200 billion in September 2022 which will cap the prices of electricity and gas until 2024. According to French Economy Minister Bruno Le Maire, with this package, “Germany is in danger of creating an unfair advantage for its (German) industry over poorer EU countries that can’t afford such support measures”. For its part, France has been reluctant to revive the MidCat pipeline which Germany was keen on so as to receive gas arriving from North Africa, as well as from LNG terminals in Spain and Portugal, through the Pyrenees to France and onward to Germany. However, in October 2022, France, Spain, and Portugal announced an agreement to drop the MidCat proposal in favour of a “green energy corridor” which will link Barcelona to Marseille—a submarine pipeline proposal called the BarMar.

These differing views on energy policy are further complicated by a varied outlook towards their security policies. While France has emerged to be the leading voice for more integrated European defence structures, Germany’s position has remained ambiguous. While Berlin has taken various steps in the past few months to emerge as a credible security actor and to upgrade its defence capabilities, it is going to take time for it cements this position. Both countries have also contributed weapons to Ukraine during the course of the crisis, nonetheless, Germany has shown reluctance to approve the transfer of Leopard tanks to Kiev, while France has not ruled out sending Leclerc battle tanks. Moreover, certain policy decisions by Germany, such as procuring F-35 fighter jets from the United States (US) and launching of European Sky Shield Initiative with 14 European countries with an exception of France—has led to increasing frustrations in Paris. This is primarily because it is viewed by France as impacting the joint defence project on Future Combat Air System (FCAS) and Main Ground Combat System spearheaded by Paris and Berlin—which are currently behind their respective schedules.

Divisions were also visible in their reactions to the US’ Inflation Reduction Act which was declared in August 2022. The IRA provide US$ 370 billion in subsidies for the adoption, mitigation, and transition to clean energy including tax credits for buying electric vehicles if they are assembled in the US. This puts European industries at a disadvantage with EU member states accusing the American administration for discriminating against foreign companies and encouraging the ‘Buy American’ strategy. While France and Germany have found common grounds for pursuing a strategy to push subsidies for EU industries, Paris has called on the EU to formulate a ‘Made in Europe’ strategy to counter the American initiative along with revising its emergency state aid rules and EU sovereign fund to finance investments across the bloc. While Berlin has acknowledged Paris’s concerns regarding the unfair competitive advantages of the IRA, it has expressed concerns on the possibility of ‘protectionism’ that the ‘Made in Europe’ strategy may bring.

What lie ahead?

While differing opinions on issues are not new and will continue to remain in the foreseeable future, the relevance of this treaty remains in the fact it has helped both Paris and Berlin to collaborate on issues critical for overall European development. Both sides are working to bridge their differences; in November 2022, Berlin and Paris reached an agreement to move to the next development stage for the next-generation Franco-German-Spanish fighter jet system FCAS. German Chancellor Scholz and the French Prime Minister Elisabeth Borne in November 2022 signed a Political Declaration titled ‘Franco-German Solidarity’ on energy solidarity committing to ‘implement concrete measures of mutual support and solidarity to guarantee the security of energy supply for their citizens and businesses.’ Also, in December 2022, Economic Ministers of both countries issues a joint declaration for a European Industrial Policy to ‘pursue and engage in an ambitious, competitiveness-seeking future-oriented European industrial policy which aims at boosting European strategic sovereignty’.

French and German partnership have been critical for the European integration process with achievements ranging from establishment of single market, introduction of Euro, stabilisation of the economic crisis, and more recently establishment of reconstruction fund called NextGenEU for COVID recovery. These two countries have been viewed as consensus-makers in the EU because—‘once the two of them find an agreement, all other EU member states align behind that compromise.’ Therefore, a stalled Franco-German engine is not good for the EU as these two countries represent the largest economies in the eurozone along with demographic and military power in the continent. While it has its ups and downs, this engine has steered the EU through some of its most difficult situations and is more necessary today as Europe deals with the consequences of a war on one hand and economic recovery on the other. The 60 years of signing of the Elysee Treaty provides an opportune time for both countries to relook at their partnership and introspect on the future of European integration process.

Observer Research Foundation

ORF was established on 5 September 1990 as a private, not for profit, ’think tank’ to influence public policy formulation. The Foundation brought together, for the first time, leading Indian economists and policymakers to present An Agenda for Economic Reforms in India. The idea was to help develop a consensus in favour of economic reforms.

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