Emmanuel Macron warned that the EU faces a “mortal threat” from the economic decline, the rise of illiberalism, and the return to war due to Russia’s full scale invasion of Ukraine.
In a address delivered at the Sorbonne University, on Thursday, French President Francois Hollande painted a sometimes dark picture of the challenges that Europe faces and argued for radical reforms in the bloc’s monetary, investment and defence policies.
He said: “We must be clear that Europe is mortal today — it could die — and that it all depends on our choices now.” The rules of the game are different.
He said that the EU must double its financial power to invest hundreds billions of Euros each year into new technologies, a stronger defense as well as the decarbonisation its economy.
Macron has endorsed the idea that a common debt issue will boost co-operation between the defence industry and the EU. He also called for the EU to create its own “strategic concepts” to ensure a European defense compatible with Nato.
He also floated the idea of a “European Preference” policy in defence and space industry, which would be written into EU Treaties. This process would take many years and some member states might have to hold referendums.
Macron wanted the European Central Bank to stop focusing solely on inflation targets because the fight against climate changes will increase energy prices. He suggested changing the mandate of the bank to include climate and economic targets. This could also require a treaty change.
Macron’s increased hawkishness towards Russia was also on display in Brussels, as French diplomats pushed to create a new EU sanction regime that targets “Russian destabilisation activities”. The French plan targets entities like the Wagner paramilitary and individuals running Russian influence campaigns ahead of EU election, such as pro Kremlin Ukrainian businessman Viktor Medvedchuk.
The Baltic States, Poland and the Netherlands supported the proposal. It would “help further stigmatise Russian destabilisation actors” and “send a strong message to governments that are tempted to sign contracts with them”.
Macron’s advisors dubbed Thursday’s speech, which lasted more than 100 minutes, Sorbonne II. This was in reference to a speech he gave on the exact same stage in 2017 where he made dozens of suggestions on topics ranging from defence to tech to create a Europe that is less dependent on foreign powers.
The French President praised the progress made by the EU in building up its “strategic autonomy” and reiterated that Europe should take greater responsibility for its own security.
“A strong Europe must respect itself and ensure its security.” It must protect its borders. Macron said that the country must prepare for its risks and be aware of them.
Macron’s 2017 Sorbonne Speech was met at the time with skepticism, particularly from Germany led by Angela Merkel.
Olaf Scholz, the German chancellor, reacted in a matter of hours. He said: “France as well as Germany want Europe to be strong.” Your speech has some good ideas about how to achieve this.
The Covid-19 pandemic and Russia’s war against Ukraine, as well as the energy shock that it caused, have all contributed to the EU moving in Macron’s favor. He cited the decision to jointly lend €800bn in order to help the EU’s economies recover after the pandemic, as proof of his vision.
Many of the proposals that Macron made to member states in 2017 were ignored. Some French ideas, such as a stronger industrial policy, have gained some traction.
Since his coalition lost its majority in the 2022 parliamentary elections, his position is also weakened at home. This makes further reforms more difficult to implement especially when the deteriorating state of public finances leaves little room for spending.
According to polls, Macron’s list trails Marine Le Pen by almost 15 points. His allies are hoping that the speech will boost the campaign of Valerie Hayer, an MEP who is not well-known.
Macron has called for massive EU investments in artificial intelligence (AI), quantum computing, space technology, biotechnology and nuclear power, as well as hydrogen production. He said the bloc needs subsidy instruments as simple to use as the US Inflation Reduction Act tax credits.
He also called on a stronger EU trade policy, which would always insist on respecting Europe’s environment standards and mutual access to markets. He said that AI and green technology should be excluded from the free trade policy.
Macron argued again that to finance such ambitious goals, the EU would need its own dedicated tax revenue, such as the recently implemented carbon border tax, an EU-wide Financial Transaction Tax, and taxing multi-nationals more through the elimination of profit-shifting tactics — both suggestions he made in 2017, but have not been adopted since. In another long-promised, but unrealised EU reform, Macron argued that the EU would have to link and deepen its capital markets.
Macron said, “Now is the moment for Europe to decide what it wants. This is a moment of decisiveness.