They could kill the EU, says France. No, you could, Germany replies. – POLITICAL

The clash highlights the dilemma facing the bloc's 27 governments at an extremely sensitive moment for global trade. The US presidential election is on a knife edge and could lead to the re-election of Donald Trump in a month. He has lost form playing tough with the EU on trade issues and has proposed sweeping new tariffs if he wins back the White House for Republicans.

But even Democrat Joe Biden's presidency has steered American policy in a protectionist direction, prioritizing domestic companies in hundreds of billions of dollars' worth of industrial investments and enticing European companies to relocate to the United States

As China becomes increasingly confident, particularly in key new carbon-neutral technologies and supply chains, the EU has some decisions to make if it wants to compete. These decisions require a high level of consensus among national leaders. And the bloc's two biggest powers can't seem to agree.

At the Berlin Global Dialogue on Wednesday, Scholz and Macron shook hands, smiled warmly and then spent the day expressing very different views on what Europe needs to do next. They disagreed on key issues, including proposals for joint EU borrowing, tariffs on imports of Chinese vehicles and trade talks with South American countries.

During a question-and-answer session at the event, Macron pointed to his difficulties with Scholz when asked whether he could persuade Berlin to issue common EU debt, as stated in an official report by former Italian Prime Minister Mario Draghi is proposed. The French leader laughed and said the last time this happened was in response to the pandemic, with the help of “a colleague called Covid-19.”

Macron and Scholz discussed the Draghi report on Europe's competitiveness, which will be on the agenda of the next EU Council summit. Officially, both Paris and Berlin say they agree with Draghi. But in reality they disagree over the proposed new wave of joint EU borrowing to invest in strategic sectors and compete with China and the US. While France has often called for new EU debt and repeated the experience of the post-pandemic stimulus plan, for Germany, this is a no-go.