Published on May 22, 2025 6:30 AM GMT
EU policy is driven mostly by the member states, so looking at what national leaders say is often more useful than what the Commission, which has every incentive to placate everyone involved, says. And Franco-German combo matters more than the most.
The joint op-ed by Macron & Merz in Le Figaro (in French) is therefore worth checking. The stuff about Ukraine and trade policy will no doubt be commented upon ad nauseam elsewhere, so let’s look at more low-profile matters:
To reduce energy costs and ensure security of supply, France and Germany will implement a realignment of their energy policies, based on climate neutrality, competitiveness, and sovereignty. This includes applying the principle of technological neutrality, ensuring non-discriminatory treatment of all low-carbon energies within the European Union.
Realignment in this context hopefully means that Germany will stop opposing nuclear power on the EU level.
Here’s an analysis from the Anthropocene Institute:
Merz aligned his position with France’s, ending years of fierce and constant opposition that had refused funding to nuclear investments across the EU and treated nuclear power, in some ways, as worse than coal.
The move came in the context of a broader effort to revitalize the Paris-Berlin strategic partnership, where German sniping against nuclear projects had been a constant irritant. The shift has barely gotten noticed in the German press, because it isn’t likely to change policy within the country. Nuclear restarts remain a hot-button issue there, with not only the Greens but the Social Democrats adamantly opposed to restarting the country’s nuclear fleet. […]
But in the EU more broadly, dropping the German government’s constant obstructionism to approving nuclear projects […] could nudge dozens of plants toward viability. Projects in France, Poland, the Czech Republic, and Romania will be much easier to bring to fruition if they don’t have to fight German nay-saying at every turn.
[…]
Just this year, three of the four countries that had been blocking nuclear investments at a Europe-wide level have changed their tune: first Belgium, then Denmark and now Germany have joined the French-led pro-nuclear block. In March, Italy reversed a Chernobyl-era nuclear moratorium and is now actively looking to expand its nuclear fleet. Bizarrely, it’s the places that ought to have gotten the message loudest that have been slowest to get the hint: holding out for the already retro-futuristic vision of a non-nuclear renewable grid, Spain and Portugal look increasingly isolated in Europe. Austria is their one remaining ally.
Macron and Merz write:
We need public and private investment, particularly in infrastructure. Establishing a genuine Capital Markets Union to channel our savings to European companies supporting the green and digital transitions and defense.
Luis Garicano describes the problem in greater detail:
While European households save around 15% of their income (nearly double the 8% rate in the US), about €11 trillion—over one third of EU household savings—sits in bank deposits. At the same time, European tech startups regularly fly to Silicon Valley seeking the private equity that should, in theory, be available at home. If, instead, a Spanish start-up wants money from German pension funds and Dutch family offices, it must comply with three national rule-books. Between 2008 and 2021 almost 30 % of European “unicorns” moved their headquarters abroad (Draghi, 2024).
But then he’s not very sanguine about the current EU efforts in the area:
The Commission's newly released Savings and Investments Union proposal (March 2025) continues this pattern of slow, incremental change. It makes proposals such as EU “Savings and Investment Accounts” with possible tax relief, financial-literacy drives, automatic pension enrolment, simpler listings, more securitisation, less “gold-plating” (extra national rules added to EU directives) and easier withholding-tax refunds. It also proposes to increase the European Securities and Markets Authority’s (ESMA) powers, yet still leaves twenty-seven supervisors in place–contrary to the suggestion in Mario Draghi’s report that a single EU regulator was needed.
Anyway, back to Macron & Merz:
We also urgently need to reduce the administrative burdens in the EU, which are stifling growth, by reviewing all EU rules, removing constraints while maintaining our ambitions. […] We call for further simplification of EU rules.
A laudable goal, but I would like to understand the details. The general institutional dynamic is that once rules are in place and people are invested in them (having, say, formed a regulatory agency, or, in EU’s case 27 regulatory agencies) they will fight tooth and nail to keep them in place.
So an European DOGE? But this time a good one, fixing stuff instead of breaking it? Creative destruction by fiat? And how would that work?
We are also keen to use this opportunity to coordinate our national economic and social reform programmes, in particular on labour and taxation. We will create a platform for dialogue between the French and German social partners, as well as between economic experts.
Frankly, I have no idea what that means, it may be just hot air, but it’s intriguing to think about how a converged labour policy — given that in France unions are mostly in opposition to the government, but in Germany they kind of incorporated into it — would look like.
Discuss
