Clear differences remain between France and the US, says the French minister
Clear differences remain between France and the US, says the French minister
Oct. 12, 2021
By Gary Miller
PARIS – As global financial leaders gather this week in Washington for the annual meetings of the International Monetary Fund, Bruno Le Maire, France’s finance minister, made clear that Franco-American cooperation effective in a review of the international tax system it cannot mask strong differences on China and other issues.
“The United States wants to confront China. The European Union wants to involve China, ”said Le Maire, a close ally of President Emmanuel Macron of France, in a comprehensive interview before the meetings. This was natural, he added, because the United States is the world’s leading power and does not “want China to become the world’s first superpower in a few years or a few decades.”
On the contrary, Europe’s strategic priority is independence, “which means being able to develop more defense capabilities, defend its own vision on the fight against climate change, defend its own economic interest, have access to key technologies. and not be too dependent on American technologies, “he said.
His comments reflected unresolved tensions that surfaced last month in a furious disagreement between France and the United States over President Biden’s decision to provide nuclear-powered submarines to Australia. The deal replaced a previous French contract to sell conventional submarines in Australia. Macron was not informed of Australia’s plans until the last minute.
“Clearly there has been at least one major misunderstanding between France and the United States, and there has also been, I would say, misconduct on the part of the American administration,” Le Maire said.
The key issue now for the European Union, he said, is to become “independent from the United States, capable of defending its own interests, whether economic or strategic.” Still, he added, the United States remains “our closest partner” in terms of values, economic model, respect for the rule of law and acceptance of freedom.
But with China, he said, “we do not share the same values or economic model.”
France and the United States are struggling to repair the damage of the submarine agreement, and the French ambassador, who was called to Paris in protest, has returned to Washington. Macron, who will meet with Biden this month, wants to see a greater American commitment to independent European defense ambitions that he says would be complementary to NATO, as well as evidence of American respect for European strategic ambitions in the Indo-Pacific. . region.
When asked if the differences over China meant an inevitable divergence between the United States and Europe, Le Maire said: “It could be if we are not cautious.” But everything must be done to avoid it, which means “recognizing Europe as one of the world’s three superpowers for the 21st century”, along with the United States and China.
One area in which Europe and the United States have been working in unison is financial reform. Efforts to push for the most radical overhaul of the international tax system in a century are approaching a breakthrough.
Finance ministers from the Group of 20 largest economies are expected to back a deal at IMF meetings as early as Wednesday, following a landmark agreement last week by nearly 140 countries to create a global minimum corporate tax of 15 percent. and new rules that would bind companies. and tech giants like Amazon and Facebook to pay an adequate share of taxes wherever they operate.
The pact, aimed at cracking down on tax havens that have drained countries of much-needed revenue, follows months of negotiations that have included intense behind-the-scenes lobbying by Le Maire and the US Treasury Secretary. , Janet Yellen.
Mr. Le Maire said that he had worked “very well with Janet Yellen on many key issues” and was determined to improve the relationship between the two countries. “But it is also up to the United States to make some decisions in the right direction to restore trust between the two continents and between the two countries.”
One of the biggest lingering points of contention is the metal tariffs that former President Donald J. Trump imposed globally in 2018. Officials face tough negotiations in the coming weeks. The Europeans plan to impose retaliatory tariffs on a range of American products starting in December. 1, unless Biden removes a 25 percent duty on European steel and a 10 percent tax on aluminum.
“If we want to improve the bilateral economic relationship between the continents, the first step must be for the United States to lift the sanctions in the case of steel and aluminum,” Le Maire said. “We are fed up with trade wars,” he added. “Clearly, it is not in the interest of the United States or the EU.”
Improving economic stability after the pandemic is essential. Mr. Le Maire has overseen a massive aid program to lift France out of a historic recession that included generous state funding to prevent massive layoffs by subsidizing wages and relief for companies struggling to pay their bills.
Support is now shrinking as the economy stabilizes amid widespread vaccinations. The economy is expected to grow 6.25 percent this year, while unemployment, a political lightning rod six months before a presidential election, is projected to fall to 7.6 percent by the end of the year, the lowest in more than a decade.
The rebound is crucial as France prepares for its elections in April. Le Maire said he is starting a political movement to support the reelection of President Macron.
The far right presents a strong challenge, as Eric Zemmour, a writer and television celebrity known for his anti-immigrant nationalism, gains traction in political polls by taking advantage of insecurity over immigration and fears of growing economic inequality due to immigration. globalization.
“There are extremist parties that are rising up in all parts of Europe and in all Western countries because many people are afraid of what is happening due to climate change, due to the technological revolution, due to major migratory movements,” Le said. Maire. “The best way to fight extremist parties is to get results,” he said.
But in the country where the yellow vest protest movement against the elite dragged on for many months, beginning in 2018, Le Maire acknowledged that the frustrations that fueled the mass protests could flare up again in France and spread to other European countries if inequality worsens as the situation increases. Governments are trying to cope with climate change by shifting from cheap fuel to renewable energy sources.
With the price of energy needed to save that transition reaching record levels, “the climate transition remains a risk for all of us, for all democracies, because it will be very costly, much more expensive than expected,” Le Maire said.
“I really believe that a new yellow vest movement is still possible in all parts of Europe,” he added. Securing a comprehensive tax deal will be crucial in helping to avoid it by providing governments with a vital source of new revenue to reduce inequality gaps, he said.
