The Mercosur free-trade deal between the EU and South American countries is a sensitive issue for the French farming sector. Many farmers fear this deal will allow cheaper beef and cereals from Latin America into the EU common market and bring down prices. The Mercosur deal allows South American countries to sell up to 99 000 metric tons of beef to Europe, 1 million tonnes of duty-free maize and, at least for now, as much wheat and corn as it sees fit. For Germany, on the other hand, the Mercosur deal brings numerous advantages, not least for its car and chemical exports.
Chinese Woes
The other main source of friction between France and Germany is the relationship with China. In the past three years, the outgoing chancellor’s trade policy with Beijing has been at odds with Emmanuel Macron’s attempts to foster a common European policy on the issue.
The fact Scholz declined an invitation by Emmanuel Macron in April 2024 to attend Xi Jinping’s state visit was received by Paris as a sign that Scholz wasn’t interested in aligning his policies with France. Instead, Scholz went on a visit to the Baltic region. China’s electric cars, cheaper and sometimes equally as good as German ones, have considerably harmed the German car industry. The soaring cost of electricity in Germany after the start of the war in Ukraine has also left German manufacturers in an unprecedented state of crisis. Since the pandemic and especially the war in Ukraine, Scholz has been trying to broker agreements with China to support German manufacturers.
Give Peace a Chance
Regarding the war in Ukraine, coordination between France and Germany has been no better. The German chancellor has regularly been rebuked by Paris for his constant refusal to reinforce Ukraine’s military arsenal with new arms and call for peace talks. Scholz’s typically German pacifist aspirations contrasted sharply with the comparatively more hawkish approach of the French president who led most of the EU’s aid policy for Ukraine. Eventually, Zelensky’s main interlocutor in Western Europe, after the British Prime minister, became Emmanuel Macron. To Scholz’s credit, Germany is however the largest EU contributor to Ukraine so far. Between 2022 and 2024, Ukraine received €44 billion in aid from Germany, including €10,6 billion in military assistance.
Immediately after the start of the war in Ukraine, Scholz issued €100 billion in additional funds to the Bundeswehr and has pledged to raise the defence budget to 2% of German GDP. By contrast, France only gave €8 billion to Ukraine including €2,6 billion in military equipment, lagging behind the United Kingdom, Denmark, the Netherlands and Sweden. France’s defence budget, though aiming at 2% GDP, remains far from that level.
Unified Front to Trump
Macron’s stance on the EU-U.S. relationship is aligned with Merz’s wishes on having a coordinated EU policy towards the new Trump administration, which it did not have during the Biden administration. Since the end of the Second World War, Germany has had closer ties with the United States than any other European country, apart from the United Kingdom. These ties could weaken, though, if Donald Trump imposes strong tariffs on EU exports to the U.S., which are mainly German. So far, Germany’s trade surplus with the U.S. has been by far the largest in the EU: €65 billion in 2024, while the U.S.’ trade deficit reached €150 billion the same year.
Finally, on nuclear energy, Merz has described the nuclear plant closures as a “mistake” and promised to reopen several of them when he got elected.
Both Merz and Macron are believers in the free-market and pragmatists, which might do much in fostering a good relationship. The stability of their governments will be crucial for establishing and maintaining good relations. Polls show that Merz, though way ahead of the populist rightistAfD and Scholz’ SPD, may have to govern as part of a coalition which may include the SDP and the Greens. Macron, with a composite government and a hung parliament, already has his own set of challenges to deal with, whose number may not decrease in the two years to come.