In a historical perspective, the recent discord between Berlin and Paris shrinks considerably. And so Emmanuel Macron warmly embraced his guest Olaf Scholz when he welcomed him to Paris for the 60th anniversary of the Élysée Treaty. Both sides also emphasized overlapping interests at the meeting of the cabinets – regarding the response to the Inflation Reduction Act or reforms of the EU.
However, Paris still struggles to understand how the German government formulates its European policy positions. In fact, coordination in the federal government is far from smooth – despite good intentions and several rounds of coordination, as you will find in my analysis.
An important person is about to be replaced, we are told: Carsten Pillath, State Secretary for Europe and International Affairs in the Federal Ministry of Finance. Christian Lindner brought the Brussels-experienced, non-partisan civil servant on board after taking office, but now the 66-year-old will have to make way again, according to informed sources. With this move, Lindner continues to restructure his staff – the liberal FDP politician recently replaced several department heads and filled the posts with his own staff. The Ministry of Finance declined to comment.
German Chancellor Olaf Scholz is demanding facts from the EU Commission to be able to determine a European response to Washington’s Inflation Reduction Act (IRA). A “very careful assessment” of the promotion of certain climate-friendly technologies in the United States and Europe is “urgently needed,” Scholz said on Sunday evening at the Franco-German Councils of Ministers in Paris. On this basis, he said, one could “jointly assess and see whether additional measures will be necessary.” The picture will probably differ from area to area.
The Chancellor is slowing things down a bit in the face of calls from Paris and Brussels to respond to the IRA with new EU funding instruments and a far-reaching relaxation of state aid regulations. The EU Commission is working at full speed on the requested comparison of instruments used to promote different cleantech sectors on both sides of the Atlantic. The assessment will likely be part of the package Commission President Ursula von der Leyen plans to present on Feb. 1.
EU circles expect von der Leyen to present a communication first. The legislative parts of her package are likely to take a little longer. The heads of state and government want to discuss them at a special summit on February 9 and 10. Decisions, however, are not expected until the regular EU summit in March. Meanwhile, Council President Charles Michel outlined his ideas in an interview with the German newspaper Handelsblatt.
Scholz stated that France and Germany were largely in agreement that aid for companies in Europe was far too bureaucratic, that the decision-making processes took too long and that companies could not predict them properly. He thus expressed his appreciation for the statements from the Commission, which were along the same lines. French President Emmanuel Macron said there was “strong agreement” with Germany on the response to the IRA.
Macron demanded to “greatly simplify” aid for European Clean-Tech companies and to make it comparable with the US model. New funding mechanisms should be developed for this purpose and existing ones should be utilized.
Scholz, in unison with German Economy Minister Robert Habeck and Finance Minister Christian Lindner, has so far stressed that sufficient funds are still available: Of the more than 700 billion euros in the European recovery fund, only 20 percent have been disbursed, he said during his speech in Davos. “Its full impact will thus emerge over the coming years.”
The Franco-German declaration cryptically mentions “ensuring procedures for state aid and sufficient financing, making full use of available financial resources and financial instruments as well as competitiveness and solidarity measures”. For this purpose, the European Investment Bank (EIB) should also be persuaded to provide higher risk financing for entrepreneurship and innovation. In addition, Berlin and Paris are calling for “more ambitious steps toward a capital markets union and the continuation of talks to complete the banking union.”
The word in Berlin is that the German government could agree to use the unspent money from the REPowerEU reconstruction fund to promote climate-friendly industries in the short term. Not only FDP Finance Minister Lindner is skeptical about a new sovereignty fund, as von der Leyen and Macron have called for in the medium term.
Regarding the enlargement of the EU and institutional reforms, Berlin and Paris are relatively in agreement. Both reaffirm their “unreserved and unequivocal commitment” to the membership perspective of the Western Balkan states and call for an acceleration of the accession process “on the basis of credible reforms.”
In the final declaration of the Council of Ministers, both governments spoke out in favor of qualified majority voting instead of unanimity in certain areas of foreign and security policy and tax matters.
To this end, both “recommend the use of the relevant passerelle clauses or constructive abstention as possible solutions within the framework of the existing treaties,” the statement said. Occasionally, increased cooperation between a certain number of member states could also be a useful tool, it said.
Both countries expressed their openness to a revision of the EU treaties “should this prove necessary in order to achieve the goals we have set ourselves.” The prerequisite, however, would be that a consensus is found among the 27 member states. But so far, the member states are far from unanimous on this issue.
Love triangles are complicated, especially when the partners have very different personalities. Accordingly, there have been frequent clashes in the governing German “traffic light coalition”, including on European policy issues. Most recently, the SPD, the Greens and the FDP could not agree on a joint position on the pay transparency directive, which would require companies to disclose data on the pay gap between men and women in the future. Germany abstained in the Council shortly before Christmas.
That is even though the coalition partners had firmly decided that the proverbial German Vote in Brussels should be a thing of the past. The coalition agreement promised “more stringent coordination” and a “united stance toward European partners”. This is how the three parties wanted to underline their decidedly pro-European focus.
Figures show that the traffic light coordinators were more successful than their predecessors: In the 2010s, Germany was among the countries most frequently outvoted in the Council, says Nicolai von Ondarza of the German Institute for International and Security Affairs, even more frequently than Poland, which is often an outsider. While that happened 14 times in 2013 alone, there were only three cases between 2020 and October 2022, at least in public votes, he said. “This suggests that the German government has been more successful in representing its positions in Brussels.”
But these numbers are only a part of the picture: “Some abstentions were only avoided by joining an inevitable outcome at the last meters,” said Bernd Hüttemann, Secretary-General of the European Movement Germany, at a Europe.Table event on European policy coordination on Thursday. German European policy would continue to be fragmented and reactive, lacking a clear strategy.
Other member states are having a hard time understanding processes and power structures in the German government. In Paris, officials wonder who in Berlin decides on EU policy. Diplomats from other capitals also lament that they receive different answers to the same question from various ministries in Berlin.
Some of the dissonances are due to the different political orientations of the SPD, the Greens and the FDP: There are decidedly different opinions within the coalition, for example, on the continued financing of the EU, Anton Hofreiter, Chair of the Europe Committee in the Bundestag, said at the event. “Such differences cannot be coordinated away at the administrative level, we have to reach a political agreement.”
But the government’s coordination machinery does not always run smoothly. The Chancellery is less dominant than it was during Angela Merkel’s time, and as a result, the need for coordination is greater. Merkel and her European advisor Uwe Corsepius relied heavily on the European Council as the central body for dealing with the many crises, from the debt crisis to the refugee crisis. In this regard, the conservative CDU politician was able to draw on the expertise of CDU/CSU-led ministries such as Finance and the Interior.
Scholz often lacks a comparable SPD base, for example in the energy crisis. As a result, the Chancellor and his advisors sometimes choose to press ahead: Scholz’s keynote speech on European policy in Prague was reportedly not coordinated with Foreign Minister Annalena Baerbock, although this would have been the proper thing to do.
The coordination in the German government on European policy happens at several levels:
To coordinate the positions on the 17 legislative proposals of the Fit-for-55 climate action package, the coalition partners last year set up a special state secretaries’ roundtable of involved ministries, chaired by Giegold. There, politically relevant topics were discussed department by department and with an eye to horizontal interrelationships. “In this way, we were able to position ourselves early on and support the Council Presidency in finding a compromise, for example before the decisive Environment Council at the end of June 2022,” says Kirsten Scholl, head of the European department at the BMWK.
However, coordination on certain Fit-for-55 dossiers was unsuccessful. For example, the Green Minister for the Environment, Steffi Lemke, and her FDP colleagues Lindner and Volker Wissing publicly argued before the decisive Council meeting about whether new cars with internal combustion engines would still be allowed to be operated after 2035 if virtually zero-carbon e-fuels were used. Even though Lemke’s ministry had already pushed through opposition from the federal government at the working level. The FDP ministries had involved the executive level too late, according to coalition circles.
It also took the German government many months to agree on a position on the Carbon Border Adjustment Mechanism or the EU Supply Chain Act. When a coalition dispute over European policy does not reach the executive level of Scholz, Habeck and Lindner, it is at times unclear who can put together the necessary compromise packages, coalition sources say.
In the heat of the internal political battle, the government partners sometimes overlooked the European dimension of their actions. In October, for example, they announced an agreement on a 200-billion-euro “defense shield” against high energy prices, without informing their EU partners – and reactions were correspondingly harsh. The government admitted that there had been some communication gaps. However, it argued that it should not be overlooked that the sometimes generalized criticism of the German aid package from other capitals was interest-driven: The German public was being used to put the German government under pressure.
Mr. Wuttke, the German government is working on a new China strategy. The leaked drafts focus on rivalry and the reduction of dependencies. Is this the right approach?
By the time the paper comes out the end of the voting grinder, it will probably look quite different.
Do you hope that not much will be left of it?
No. We hope that all aspects are represented: China as partner, competitor and rival. The weighting depends on where the greatest advantages lie. What matters now is that we make a clear, robust Europe and Germany First policy.
Germany First? That sounds like Donald Trump.
Germany and Europe First – for me, they are the same thing. Yes, we have to look at where our interests lie. It is not about protectionism but about focusing. The Chinese have been doing China First for a long time. We have to respond robustly to this.
Does that mean more industrial policy?
I consider industrial policy to be important in certain fields that need to be safeguarded. These include pharmaceutical precursors such as antibiotics and vitamin B, and industrial metals such as rare earth elements and magnesium. We must not be susceptible to blackmail here. China will not hesitate to politically exploit such dependencies. That is why we need alternatives.
Reducing dependencies ultimately means less China?
It’s not less China, it’s smarter China. Because one thing is clear: Things can’t go on like this. We’re good at selling, but we keep running into market access barriers.
The USA is consistently wielding its economic power in its confrontation with China. Should the EU also use trade barriers?
Tariffs on Chinese imports only result in taxing our own consumers. I don’t think we will achieve anything with it. More containers from China are going to America today than ever before. What we really see here is a failure of the sanctions policy. We need to approach the issue of reciprocity more skillfully.
And how?
In the discussion about the stake in a terminal at the Port of Hamburg, for example, the emphasis should have been on Chinese shipping companies being able to ship between ports in Europe, such as from Piraeus to Antwerp, from Valencia to Hamburg. We are not allowed to do that as Europeans in China. We first have to go from Dalian to Pusan in South Korea and only then can we continue to Shanghai. Here we could have said: OK, you take a stake in the port of Hamburg, but we will only do that if you grant our ships in China the same opportunities.
China protects its industries through a distinct industrial policy. Government and economic actors work hand in hand. Is cooperation between politics and business in Europe adequate?
With all this industrial policy, we have to be careful not to adopt China’s system. We should stay with our liberal DNA and see how we can deal with the competition. I don’t think much of a “Made in Europe 2025” based on “Made in China 2025,” where authorities dictate to companies how high their market share should be by a target date. We have to force the Chinese companies to play with open sights. We have to see to what extent they are subsidized and then draw conclusions to what extent they are allowed to participate here.
So you favor stricter investment screening?
Screening for investment can make sense. However, Chinese private companies should generally be allowed to continue to invest in Europe. The most important thing is market access in China.
The leadership in Beijing massively increased its threats against Taiwan. How should we respond?
I am absolutely in favor of a deeper economic integration of Taiwan. But we should watch the red lines and help maintain the status quo. Any salami-slicing tactics that breaks this will lead to problems that are then hard to control.
But shouldn’t we prepare for a potential invasion of Taiwan by China?
The red line is there to prevent such a scenario. A war over Taiwan would make Russia’s war against Ukraine look small. A war over Taiwan would not simply be a threat to Western investment in China, but would lead to a global meltdown. But the war variant seems artificial; there is no sign of it happening. The danger of not being in China seems to me greater than being in China too much. Personally, I am against pre-emptive fear. There is already a glaring labor shortage in Germany and Europe, so who is supposed to produce all the goods?
And car expert Dudenhöffer says that if VW withdraws from China now, it would be the end of the German automotive industry.
One thing holds true for the automotive industry: If you’re not in China, you miss out on the scaling of technical capabilities. The point is not just to sell cars. The market for electric cars is currently developing in China. At the same time, the transition from gasoline-powered cars to computers on wheels is underway. Those who don’t participate won’t learn. That’s why the Americans are investing in China just as much as we are. The same is true for many other industries, for chemicals, for infrastructure.
What you have now listed leaves precious little left of the simple idea that China could simply be diversified away.
On the contrary, in reality, diversification has been taking place for a long time. We register that no European company is leaving China. At the same time, we see that company bosses are increasingly traveling to the ASEAN states or India. For many, it pays off, because China has become more expensive. Of course, Cambodia is no substitute for China, because there is often only one road, where the trucks then get stuck. In Shenzhen, the highways lead four lanes toward the world’s largest port. But we have to do our homework and look for new sites, perhaps again in Europe or America.
Every day on her way to work, Verena Fennemann walks past where, as she says, big politics is made. She has made a remarkable career path: Today, she heads Every day on her way to work, Verena Fennemann walks past where, as she says, big politics is made. She has made a remarkable career path: Today, she heads the Fraunhofer EU Office Brussels.
“Europe is my home,” emphasizes Fennemann, leaving no doubt about it. What she appreciates about her place of residence is that everything is within short walking distance. “That’s the beauty of Brussels: it’s a village with a cosmopolitan character,” says Fennemann. In her social circle, the city is therefore also known as the “European Village,” she explains.
Verena Fennemann joined the Fraunhofer-Gesellschaft at the age of 25. She is now 46 and looks back on a career at Fraunhofer spanning more than two decades. And that, she says, even though it was never actually planned that way. Everything has always worked out well. She has had many happy moments, she says.
When Fennemann visited Brussels for the first time in the early 2000s, she was anything but thrilled. However, all the EU accession waves have changed the Belgian capital very much for the better.
Fennemann began her career at Fraunhofer as a researcher and was seconded to the Commission as an expert for three years. The environmental engineer always focused on EU projects and the creation and maintenance of a Europe-wide network. Fennemann recognizes the opportunities for individual organizations within European collaborative projects. Thanks to her expertise and experience, she was already the number one contact person in Germany for EU applications and other European issues. In the past, the staunch European worked in environmental and resource logistics.
The team at Fraunhofer’s EU office in Brussels, which Fennemann has headed since 2019, is very female. And that even though she tries to keep “the male quota” high, she jokes. Fennemann’s work, which includes being involved in the “Horizon Europe” funding program for research and innovation, is characterized by a love of technology and a thirst for knowledge.
Not only the Covid pandemic but also the assault on Ukraine and other pressing challenges have brought wind to the debates, she notes. Funding issues, however, are often a big topic in the EU, spanning many areas. “I’m not saying we can’t be competitive with this, but it doesn’t match the ambitions at all,” Fennemann notes.
Particularly when it comes to funding programs, she notes that it’s not easy to weigh where financial adjustments can be made. “Our credo right now is new initiatives need new money.” And that does not seem to be her only credo. Verena Fennemann is absolutely clear on how Europe must face the current and future crises: “It’s only possible with a joint effort and the will to want to change something.” Julia Klann
In a historical perspective, the recent discord between Berlin and Paris shrinks considerably. And so Emmanuel Macron warmly embraced his guest Olaf Scholz when he welcomed him to Paris for the 60th anniversary of the Élysée Treaty. Both sides also emphasized overlapping interests at the meeting of the cabinets – regarding the response to the Inflation Reduction Act or reforms of the EU.
However, Paris still struggles to understand how the German government formulates its European policy positions. In fact, coordination in the federal government is far from smooth – despite good intentions and several rounds of coordination, as you will find in my analysis.
An important person is about to be replaced, we are told: Carsten Pillath, State Secretary for Europe and International Affairs in the Federal Ministry of Finance. Christian Lindner brought the Brussels-experienced, non-partisan civil servant on board after taking office, but now the 66-year-old will have to make way again, according to informed sources. With this move, Lindner continues to restructure his staff – the liberal FDP politician recently replaced several department heads and filled the posts with his own staff. The Ministry of Finance declined to comment.
German Chancellor Olaf Scholz is demanding facts from the EU Commission to be able to determine a European response to Washington’s Inflation Reduction Act (IRA). A “very careful assessment” of the promotion of certain climate-friendly technologies in the United States and Europe is “urgently needed,” Scholz said on Sunday evening at the Franco-German Councils of Ministers in Paris. On this basis, he said, one could “jointly assess and see whether additional measures will be necessary.” The picture will probably differ from area to area.
The Chancellor is slowing things down a bit in the face of calls from Paris and Brussels to respond to the IRA with new EU funding instruments and a far-reaching relaxation of state aid regulations. The EU Commission is working at full speed on the requested comparison of instruments used to promote different cleantech sectors on both sides of the Atlantic. The assessment will likely be part of the package Commission President Ursula von der Leyen plans to present on Feb. 1.
EU circles expect von der Leyen to present a communication first. The legislative parts of her package are likely to take a little longer. The heads of state and government want to discuss them at a special summit on February 9 and 10. Decisions, however, are not expected until the regular EU summit in March. Meanwhile, Council President Charles Michel outlined his ideas in an interview with the German newspaper Handelsblatt.
Scholz stated that France and Germany were largely in agreement that aid for companies in Europe was far too bureaucratic, that the decision-making processes took too long and that companies could not predict them properly. He thus expressed his appreciation for the statements from the Commission, which were along the same lines. French President Emmanuel Macron said there was “strong agreement” with Germany on the response to the IRA.
Macron demanded to “greatly simplify” aid for European Clean-Tech companies and to make it comparable with the US model. New funding mechanisms should be developed for this purpose and existing ones should be utilized.
Scholz, in unison with German Economy Minister Robert Habeck and Finance Minister Christian Lindner, has so far stressed that sufficient funds are still available: Of the more than 700 billion euros in the European recovery fund, only 20 percent have been disbursed, he said during his speech in Davos. “Its full impact will thus emerge over the coming years.”
The Franco-German declaration cryptically mentions “ensuring procedures for state aid and sufficient financing, making full use of available financial resources and financial instruments as well as competitiveness and solidarity measures”. For this purpose, the European Investment Bank (EIB) should also be persuaded to provide higher risk financing for entrepreneurship and innovation. In addition, Berlin and Paris are calling for “more ambitious steps toward a capital markets union and the continuation of talks to complete the banking union.”
The word in Berlin is that the German government could agree to use the unspent money from the REPowerEU reconstruction fund to promote climate-friendly industries in the short term. Not only FDP Finance Minister Lindner is skeptical about a new sovereignty fund, as von der Leyen and Macron have called for in the medium term.
Regarding the enlargement of the EU and institutional reforms, Berlin and Paris are relatively in agreement. Both reaffirm their “unreserved and unequivocal commitment” to the membership perspective of the Western Balkan states and call for an acceleration of the accession process “on the basis of credible reforms.”
In the final declaration of the Council of Ministers, both governments spoke out in favor of qualified majority voting instead of unanimity in certain areas of foreign and security policy and tax matters.
To this end, both “recommend the use of the relevant passerelle clauses or constructive abstention as possible solutions within the framework of the existing treaties,” the statement said. Occasionally, increased cooperation between a certain number of member states could also be a useful tool, it said.
Both countries expressed their openness to a revision of the EU treaties “should this prove necessary in order to achieve the goals we have set ourselves.” The prerequisite, however, would be that a consensus is found among the 27 member states. But so far, the member states are far from unanimous on this issue.
Love triangles are complicated, especially when the partners have very different personalities. Accordingly, there have been frequent clashes in the governing German “traffic light coalition”, including on European policy issues. Most recently, the SPD, the Greens and the FDP could not agree on a joint position on the pay transparency directive, which would require companies to disclose data on the pay gap between men and women in the future. Germany abstained in the Council shortly before Christmas.
That is even though the coalition partners had firmly decided that the proverbial German Vote in Brussels should be a thing of the past. The coalition agreement promised “more stringent coordination” and a “united stance toward European partners”. This is how the three parties wanted to underline their decidedly pro-European focus.
Figures show that the traffic light coordinators were more successful than their predecessors: In the 2010s, Germany was among the countries most frequently outvoted in the Council, says Nicolai von Ondarza of the German Institute for International and Security Affairs, even more frequently than Poland, which is often an outsider. While that happened 14 times in 2013 alone, there were only three cases between 2020 and October 2022, at least in public votes, he said. “This suggests that the German government has been more successful in representing its positions in Brussels.”
But these numbers are only a part of the picture: “Some abstentions were only avoided by joining an inevitable outcome at the last meters,” said Bernd Hüttemann, Secretary-General of the European Movement Germany, at a Europe.Table event on European policy coordination on Thursday. German European policy would continue to be fragmented and reactive, lacking a clear strategy.
Other member states are having a hard time understanding processes and power structures in the German government. In Paris, officials wonder who in Berlin decides on EU policy. Diplomats from other capitals also lament that they receive different answers to the same question from various ministries in Berlin.
Some of the dissonances are due to the different political orientations of the SPD, the Greens and the FDP: There are decidedly different opinions within the coalition, for example, on the continued financing of the EU, Anton Hofreiter, Chair of the Europe Committee in the Bundestag, said at the event. “Such differences cannot be coordinated away at the administrative level, we have to reach a political agreement.”
But the government’s coordination machinery does not always run smoothly. The Chancellery is less dominant than it was during Angela Merkel’s time, and as a result, the need for coordination is greater. Merkel and her European advisor Uwe Corsepius relied heavily on the European Council as the central body for dealing with the many crises, from the debt crisis to the refugee crisis. In this regard, the conservative CDU politician was able to draw on the expertise of CDU/CSU-led ministries such as Finance and the Interior.
Scholz often lacks a comparable SPD base, for example in the energy crisis. As a result, the Chancellor and his advisors sometimes choose to press ahead: Scholz’s keynote speech on European policy in Prague was reportedly not coordinated with Foreign Minister Annalena Baerbock, although this would have been the proper thing to do.
The coordination in the German government on European policy happens at several levels:
To coordinate the positions on the 17 legislative proposals of the Fit-for-55 climate action package, the coalition partners last year set up a special state secretaries’ roundtable of involved ministries, chaired by Giegold. There, politically relevant topics were discussed department by department and with an eye to horizontal interrelationships. “In this way, we were able to position ourselves early on and support the Council Presidency in finding a compromise, for example before the decisive Environment Council at the end of June 2022,” says Kirsten Scholl, head of the European department at the BMWK.
However, coordination on certain Fit-for-55 dossiers was unsuccessful. For example, the Green Minister for the Environment, Steffi Lemke, and her FDP colleagues Lindner and Volker Wissing publicly argued before the decisive Council meeting about whether new cars with internal combustion engines would still be allowed to be operated after 2035 if virtually zero-carbon e-fuels were used. Even though Lemke’s ministry had already pushed through opposition from the federal government at the working level. The FDP ministries had involved the executive level too late, according to coalition circles.
It also took the German government many months to agree on a position on the Carbon Border Adjustment Mechanism or the EU Supply Chain Act. When a coalition dispute over European policy does not reach the executive level of Scholz, Habeck and Lindner, it is at times unclear who can put together the necessary compromise packages, coalition sources say.
In the heat of the internal political battle, the government partners sometimes overlooked the European dimension of their actions. In October, for example, they announced an agreement on a 200-billion-euro “defense shield” against high energy prices, without informing their EU partners – and reactions were correspondingly harsh. The government admitted that there had been some communication gaps. However, it argued that it should not be overlooked that the sometimes generalized criticism of the German aid package from other capitals was interest-driven: The German public was being used to put the German government under pressure.
Mr. Wuttke, the German government is working on a new China strategy. The leaked drafts focus on rivalry and the reduction of dependencies. Is this the right approach?
By the time the paper comes out the end of the voting grinder, it will probably look quite different.
Do you hope that not much will be left of it?
No. We hope that all aspects are represented: China as partner, competitor and rival. The weighting depends on where the greatest advantages lie. What matters now is that we make a clear, robust Europe and Germany First policy.
Germany First? That sounds like Donald Trump.
Germany and Europe First – for me, they are the same thing. Yes, we have to look at where our interests lie. It is not about protectionism but about focusing. The Chinese have been doing China First for a long time. We have to respond robustly to this.
Does that mean more industrial policy?
I consider industrial policy to be important in certain fields that need to be safeguarded. These include pharmaceutical precursors such as antibiotics and vitamin B, and industrial metals such as rare earth elements and magnesium. We must not be susceptible to blackmail here. China will not hesitate to politically exploit such dependencies. That is why we need alternatives.
Reducing dependencies ultimately means less China?
It’s not less China, it’s smarter China. Because one thing is clear: Things can’t go on like this. We’re good at selling, but we keep running into market access barriers.
The USA is consistently wielding its economic power in its confrontation with China. Should the EU also use trade barriers?
Tariffs on Chinese imports only result in taxing our own consumers. I don’t think we will achieve anything with it. More containers from China are going to America today than ever before. What we really see here is a failure of the sanctions policy. We need to approach the issue of reciprocity more skillfully.
And how?
In the discussion about the stake in a terminal at the Port of Hamburg, for example, the emphasis should have been on Chinese shipping companies being able to ship between ports in Europe, such as from Piraeus to Antwerp, from Valencia to Hamburg. We are not allowed to do that as Europeans in China. We first have to go from Dalian to Pusan in South Korea and only then can we continue to Shanghai. Here we could have said: OK, you take a stake in the port of Hamburg, but we will only do that if you grant our ships in China the same opportunities.
China protects its industries through a distinct industrial policy. Government and economic actors work hand in hand. Is cooperation between politics and business in Europe adequate?
With all this industrial policy, we have to be careful not to adopt China’s system. We should stay with our liberal DNA and see how we can deal with the competition. I don’t think much of a “Made in Europe 2025” based on “Made in China 2025,” where authorities dictate to companies how high their market share should be by a target date. We have to force the Chinese companies to play with open sights. We have to see to what extent they are subsidized and then draw conclusions to what extent they are allowed to participate here.
So you favor stricter investment screening?
Screening for investment can make sense. However, Chinese private companies should generally be allowed to continue to invest in Europe. The most important thing is market access in China.
The leadership in Beijing massively increased its threats against Taiwan. How should we respond?
I am absolutely in favor of a deeper economic integration of Taiwan. But we should watch the red lines and help maintain the status quo. Any salami-slicing tactics that breaks this will lead to problems that are then hard to control.
But shouldn’t we prepare for a potential invasion of Taiwan by China?
The red line is there to prevent such a scenario. A war over Taiwan would make Russia’s war against Ukraine look small. A war over Taiwan would not simply be a threat to Western investment in China, but would lead to a global meltdown. But the war variant seems artificial; there is no sign of it happening. The danger of not being in China seems to me greater than being in China too much. Personally, I am against pre-emptive fear. There is already a glaring labor shortage in Germany and Europe, so who is supposed to produce all the goods?
And car expert Dudenhöffer says that if VW withdraws from China now, it would be the end of the German automotive industry.
One thing holds true for the automotive industry: If you’re not in China, you miss out on the scaling of technical capabilities. The point is not just to sell cars. The market for electric cars is currently developing in China. At the same time, the transition from gasoline-powered cars to computers on wheels is underway. Those who don’t participate won’t learn. That’s why the Americans are investing in China just as much as we are. The same is true for many other industries, for chemicals, for infrastructure.
What you have now listed leaves precious little left of the simple idea that China could simply be diversified away.
On the contrary, in reality, diversification has been taking place for a long time. We register that no European company is leaving China. At the same time, we see that company bosses are increasingly traveling to the ASEAN states or India. For many, it pays off, because China has become more expensive. Of course, Cambodia is no substitute for China, because there is often only one road, where the trucks then get stuck. In Shenzhen, the highways lead four lanes toward the world’s largest port. But we have to do our homework and look for new sites, perhaps again in Europe or America.
Every day on her way to work, Verena Fennemann walks past where, as she says, big politics is made. She has made a remarkable career path: Today, she heads Every day on her way to work, Verena Fennemann walks past where, as she says, big politics is made. She has made a remarkable career path: Today, she heads the Fraunhofer EU Office Brussels.
“Europe is my home,” emphasizes Fennemann, leaving no doubt about it. What she appreciates about her place of residence is that everything is within short walking distance. “That’s the beauty of Brussels: it’s a village with a cosmopolitan character,” says Fennemann. In her social circle, the city is therefore also known as the “European Village,” she explains.
Verena Fennemann joined the Fraunhofer-Gesellschaft at the age of 25. She is now 46 and looks back on a career at Fraunhofer spanning more than two decades. And that, she says, even though it was never actually planned that way. Everything has always worked out well. She has had many happy moments, she says.
When Fennemann visited Brussels for the first time in the early 2000s, she was anything but thrilled. However, all the EU accession waves have changed the Belgian capital very much for the better.
Fennemann began her career at Fraunhofer as a researcher and was seconded to the Commission as an expert for three years. The environmental engineer always focused on EU projects and the creation and maintenance of a Europe-wide network. Fennemann recognizes the opportunities for individual organizations within European collaborative projects. Thanks to her expertise and experience, she was already the number one contact person in Germany for EU applications and other European issues. In the past, the staunch European worked in environmental and resource logistics.
The team at Fraunhofer’s EU office in Brussels, which Fennemann has headed since 2019, is very female. And that even though she tries to keep “the male quota” high, she jokes. Fennemann’s work, which includes being involved in the “Horizon Europe” funding program for research and innovation, is characterized by a love of technology and a thirst for knowledge.
Not only the Covid pandemic but also the assault on Ukraine and other pressing challenges have brought wind to the debates, she notes. Funding issues, however, are often a big topic in the EU, spanning many areas. “I’m not saying we can’t be competitive with this, but it doesn’t match the ambitions at all,” Fennemann notes.
Particularly when it comes to funding programs, she notes that it’s not easy to weigh where financial adjustments can be made. “Our credo right now is new initiatives need new money.” And that does not seem to be her only credo. Verena Fennemann is absolutely clear on how Europe must face the current and future crises: “It’s only possible with a joint effort and the will to want to change something.” Julia Klann
