Digital Europe

'Unite, or the U.S. Will Dictate Rules'

French economics minister Emmanuel Macron wants closer digital cooperation with Germany. Source: AP
French economics minister Emmanuel Macron wants closer digital cooperation with Germany.
  • Why it matters

    Why it matters

    French Economy Minister Emmanuel Macron argues that without cooperation on issues such as regulation of data privacy, European countries will have to submit to rules imposed by others, especially the United States.

  • Facts

    Facts

    • The plan is for a partnership between France’s “Industry of the Future” project and Germany’s “Industry 4.0” program.
    • The collaboration would create a system to improve financing for startups.
    • Mr. Macron wants true solidarity among European countries.
    •  
  • Audio

    Audio

  • Pdf

With its drones, smart lighting and robots that crawl up the walls, the French economy minister’s office could be a showroom for digital objects. Thirty-seven-year-old Emmanuel Macron loves young companies, and he’s hatching a plan with the Germans to promote them.

Mr. Macron, a former adviser to French President François Hollande, has brought a welcome injection of youthful energy, enthusiasm and plain-speaking to the French cabinet.

But the former investment banker and rising star of French politics with the power to shake things up is as feared as he is loved.

He hopes that his latest plot, a collaboration with Germany to promote Europe’s digital economy, will help promote workforce mobility, harmonize data protection policies and hammer out common European standards for new technologies such as self-driving cars.

On Tuesday, German Chancellor Angela Merkel and her economics minister, Sigmar Gabriel, will meet with French President François Hollande and Mr. Macron in the Elysee Palace to adopt a declaration on the planned collaboration.

Talking to Handelsblatt in an exclusive interview, Mr. Macron expanded on his ideas ahead of the key talks – and called for closer and better cooperation in the euro zone.

Handelsblatt: Minister Macron, France and Germany want to combine forces to move forward in the dgital economy. Will they succeed?

Mr. Macron: I think we have real prospects of success. Digitization is rocking our economies. It’s breaking down the barriers between classic sectors – that makes our companies vulnerable.

We want to eliminate all barriers to the European digital single market.

Which ones are you thinking about?

Big Data and the Internet of Things are turning the energy sector upside down. Energy providers will be in trouble unless they are able to offer concrete solutions for consumers. We can’t ignore change. In fact we should get the greatest possible benefit from it we can. Think of new mobility, for example. BlaBlaCar, a ride-sharing service, provides low-cost transportation and creates thousands of jobs.

How exactly do you intend to confront this challenge?

We’re working with the German government right now to set up a partnership between the French “Industry of the Future” project and Germany’s “Industry 4.0” program, a partnership that involves investment and training.

We want to improve the mobility of European workers. People should work where the best possible conditions are in place. We also want to eliminate all barriers for the European digital domestic market, which doesn’t really exist yet. About half of all sales apply to the American market, while the other half are generated in the national market.

Which barriers do you mean?

It’s a question of who the relevant regulators are and of security on the Internet. If we don’t manage to solve these problems together, we will have to submit to the rules others create for us, especially the Americans. We want shared regulation of data privacy and the “right to be forgotten” on the Internet.

Harmonizing data privacy – it sounds like a never-ending task.

No. We have to move forward as quickly as possible. The negotiations are already underway.

Startups require exceptions to labor and social legislation. Are you accommodating young entrepreneurs?

We create 1,000 to 1,500 startups a year in Paris alone, and France is the country in continental Europe where the largest number of startups is established. Their problem that they lack growth capital for ‘scaling up.’ We need to create an ecosystem of financing for startups.

There is a lack of capital, and yet large insurance companies are complaining about the lack of investment opportunities.

Regulation has scared them away. That’s why, as part of the Franco-German strategy, we want to relax restrictions for insurance companies so that they will start investing more in venture capital again. We want to develop a European venture capital fund and create the opportunity for investors to raise capital in the markets once again. And our large companies need to cooperate with startups much more intensively.

We intend to flesh out an agreement on the most important issues by the end of the year. This is concrete progress for Europe.

What would that achieve?

That allows big firms to reinvent themselves and approach their business models in innovative ways. Otherwise, others – outside competitors – will do it for them, and they will go under. Another task is to create joint investment projects. That means cross-border financing of renewable energy programs, for example, like the ones we have already agreed to. More projects will follow in the coming days and weeks. And we’re also developing joint standards.

What do they have to do with industrial success?

A lot, because it’s a question of where value is created in the future, and who benefits from it. Just think of the driverless car. Will the company that produces the embedded software rake in the profits, or will it be the auto industry? This is why we need joint standards. Insurance companies and the operators or transportation systems also depend on these standards. If we continue to do this purely on a national basis, as we did in the past, we will never have a unified European market.

But the real question is who chooses the standards.

Not politicians, but industrial leaders. We intend to flesh out an agreement on the most important issues between the “Industry of the Future” project and Germany’s “Industry 4.0” program by the end of the year. This is concrete progress for Europe.

Where progress is otherwise lacking.

Germany’s Economy Minister Sigmar Gabriel and I have put together proposals that will allow us to move forward with improved social and economic integration. We want to achieve greater convergence of rules relating to minimum wages, the social dialogue and job training.

You seem to have a very good relationship with Mr. Gabriel. But what you lack is support from the president and the chancellor.

I think both of them have been very involved in the other major issue of the day, the refugee crisis. But German Chancellor Angela Merkel and French President François Hollande have also voiced their support for a more integrated euro zone.

The situation is even worse when it comes to the refugees, where there is no sharing of the burden whatsoever: a million refugees and migrants in Germany, but only 60,000 in France.

The chancellor and the president have taken a courageous stance on the refugee crisis and are playing a key role in achieving a joint European solution. But Europe cannot devote all of its attention to crises alone. It also needs to move forward on concrete issues.

You are obstructing each other when it comes to strengthening the euro zone. Germany wants a European finance minister with true decision-making power, while you prefer a euro budget.

I think it’s a mistake to treat the European minister like an inquisitor. We already have very strict rules, with a commission that can impose sanctions. And in 2012 we accepted a fiscal agreement that allows for supervision at a level that was impossible in the past.

It was urgently needed. After all, we recognized the consequences of excessive debt.

That’s right. We spent years walking with only one leg, getting into debt and failing to introduce reforms. But does that mean we should only use the other leg now? Can’t we use both legs at some point? You need solidarity to achieve reforms and clean up budgets.

Do you want solidarity without conditions?

I want true solidarity, a transfer like the one that takes place between Germany’s richer states such as Bavaria and your poorest states. It’s possible in Germany because you form a community.

Europe can't devote all of its attention to crises alone. It also needs to move forward on concrete issues.

Aren’t you moving a little too quickly if you truly intend to implement the kind of regional assistance we have in Germany?

We will fail if we lack a vision and solidarity. What Mr. Gabriel and I propose is a commissioner for the euro zone who has the power of the current commissioner for economic affairs and the president of the Eurogroup, but also controls a joint budget. This means that if France contributes 100 units, it doesn’t get 100 units back.

Do you want the transfer of national sovereignty in Euro-Land, or don’t you?

I want it at the right time. We need a Franco-German roadmap, and it has to be the key issue in the 2017 elections.

Do you really expect the French Socialist Party to campaign enthusiastically for a European project?

I’m not talking about parties. I’m talking about France. Whoever the candidates will be in 2017, they will have to seek the approval of voters, and they’ll have to state the issue clearly: We support strengthening the euro zone. Will you give us the mandate to move forward?

 

This interview was conducted by Thomas Hanke, Handelsblatt’s Paris correspondent. To contact the author: hanke@handelsblatt.com

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