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Common Ground for Germany and France

Germany and France have long been among Europe's strongest partners, even if they take a different approach. Credit: DPA
Germany and France have long been among Europe's strongest partners, even if they take a different approach.
  • Why it matters

    Why it matters

    The two countries have long been partners for more European unity, but their business ties require closer cooperation.

  • Facts

    Facts

    • The refugee crisis is challenging unity between German and French policy makers.
    • France is willing to accept a maximum of 60,000 refugees, while as many as 1 million might come to Germany this year.
    • The heads of German and French tank manufacturers, Nexter and KMW, appeared at the forum following their deal earlier this year to merge.
  • Audio

    Audio

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Crises show how strong a friendship really is. For the German-French partnership — long an engine for increased European cohesion — the current refugee crisis is a severe test of that unity.

Listening to the experts from industry and politics at the German-French Business Forum in Berlin on Tuesday, it was clear that there are no simple solutions. Sponsored by Handelsblatt and the French financial newspaper Les Echos, it was the second such annual event to grapple with such questions.

Ulrich Grillo, president of the Federation of German Industries, or BDI, said he believes businesses share an obligation to help solve the refugee problem. For instance, they can offer apprenticeships to migrants or make housing available, he said.

While Germany is opening its borders, the French emphasize their military involvement instead.

In Germany – with its shortage of trained workers and increasingly aging population – migrants should be viewed as an opportunity, he said.

“In 2020, we will have a shortage of 5 million workers,” Mr. Grillo told the forum. “The refugees can help to solve our demographic problem.”

But he warned that political leadership was crucial. And he issued a call to colleagues in France: “We must now prove that Europe works. This is the litmus test.”

So far, a divided Europe has lumbered along in search of an effective solution. France, for instance, is willing to accept a maximum of 60,000 refugees, while as many as 1 million might come to Germany this year.

Matthias Fekl, France’s junior minister for foreign trade, tourism and expatriates, gave no credence to the often-voiced criticism that Paris and Berlin aren’t working together to find a solution to the refugee crisis. He noted that both had already made joint demands to the European Union on several related issues, including setting up so-called “hotspots” or reception centers for refugees, along Europe’s external borders. What’s more, he said, there has been European-wide agreement about quotas.

But the longtime friends cannot hide the fact that they are divided on how to best handle the multitude of migrants. While Germany has opened its borders, the French are proving to be less receptive and emphasize instead their military involvement.

For France, the influx of refugees and the civil war in Syria are two sides of the same coin. France is helping fight so-called Islamic State terrorists in Iraq and Syria, Mr. Fekl noted, so “we are involved at the point of origin for the wave of refugees.”

His country has “no need for lessons or warnings” from Germany, said the French minister, who grew up in Frankfurt and speaks perfect German. The fact is, he said, France is in a different situation to Germany.

Still, he said, most French citizens have great respect for German Chancellor Angela Merkel, and her motto in the crisis: “We can do it.”

 

Comparing France and Germany-01

 

But Mr. Grillo, the BDI president, said the chancellor has put her trust in the European Union coming together on the issue — and she must not be left in a lurch.

Up to now, France has mostly been a transit country for the migrants. Most refugees don’t want to stay but hope to travel further, for example to England or Germany. A few thousand people are currently camping near the northern French port of Calais, hoping to somehow make their way to the United Kingdom.

The reason they have little interest in staying in France is because of the country’s comparatively high rate of unemployment, observed Sophie Boissard, vice president of MEDEF, the French industry association. Migrants can find work more quickly in Germany.

France’s economy has not grown much this year — just 1.1 percent — or in the recent past. That’s cause for concern for German companies as well, because the two economies are so tightly intertwined.

Although French industry has profited from low interest rates, Ms. Boissard complained that public spending was still too high, at 57 percent of the French GDP. Labor costs are also too high, she said, because of excessive social insurance contributions, though she acknowledged some progress had been made.

Mr. Grillo, meanwhile, called for more German-French projects to foster economic growth — in digitization and the transition to renewable energies.

He also said he feared new financial burdens in his home country and warned: “The German economy also can be run into the ground.”

“Politics must make it possible for young companies to cross national borders more rapidly and simply.”

Delphine Mousseau,, Vice president of Zalando

Tuesday’s business forum also was a chance for the chiefs of German and French armored vehicle makers, Nexter and Krauss-Maffei Wegmann, or KMW, to appear together following their deal earlier this year to merge.

Philippe Burtin, chief executive of Paris-based Nexter, stood alongside Frank Haun, the head of Munich-based KMW.

Mr. Haun said he was fed up with government critics who preferred an all-German merger with Rheinmetall, the automotive and defense group out of Düsseldorf. “The step we are taking is the correct one,” said Mr. Haun.

But how can such a cooperative effort between German and French defense firms succeed?

“We are still two different companies, without any joint products,” acknowledged Mr. Burtin. But Mr. Haun added: “We want to find a bridge.”

In Germany, critics wanted key technologies in the arms industry to remain in German hands. And some fear that controls on armament exports could be evaded.

Hans-Peter Bartels of the center-left Social Democrats, however, rejected those arguments. The parliamentary commissioner for the Armed Forces said that, in light of global threats, more German-French defense cooperation was needed. He cited Airbus, the European multinational aerospace and defense group, as a positive model.

The goal, he said, was to set up more European programs, such as the joint development of helicopters. Austerity measures, said Mr. Bartels, have led to a situation in which “the German military is only partially capable of countering contemporary threats.”

The head of KMW didn’t mince words on the subject. “In today’s situation,” Mr. Haun said, “each national army can’t drive its own vehicles in the European brigade.”

Mr. Haun and Mr. Burtin said they plan to manage the new Paris-Munich weapons firm together, at least for the next five years.

Meanwhile three founders of Internet start-ups in Germany and France called for disruptive national barriers to be broken down. They were speaking on a panel of young business leaders at the forum.

“Political lip-service paid to improving our network is good, but now we need specific action,” said Tom Kirschbaum, founder of Ally, a Berlin-based company that has developed a transit route planner app.

“There are some good approaches, but now quick and vigorous action must be taken,” agreed Jean-Daniel Guyot, founder of Captain Train, a Paris-based platform for buying railway tickets.

“Politics must make it possible for young companies to cross national borders more rapidly and simply,” Delphine Mousseau, the vice president for markets at Berlin-based online fashion retailer Zalando, said.

Ms. Mousseau said U.S. competitors have the advantage of a huge domestic market, while French and German start-ups have to deal with a multitude of conflicting national regulations.

Two weeks ago Germany and France held a digital summit. At the gathering France and Germany urged the European Commission to establish a single legal framework to boost the E.U.’s digital economy. They issued a joint declaration urging  the Commission to form a single digital production framework which would set a common set of rules for the European industry.

At Tuesday’s forum,  Mr. Guyot backed that initiative, asking why “we are still talking about national laws for the digital economy. That’s just a waste of time and energy.”

And Mr. Kirschbaum pleaded: “Just don’t put up any obstacles!”

 

Anja Stehle is a Berlin-based reporter for Handelsblatt. Thomas Hanke is the paper’s Paris correspondent. To contact the authors: stehle@handelsblatt.com, hanke@handelsblatt.com

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