Why is the French solution so different from Germany’s? Both countries share a strong public commitment to the climate targets, which date back to at least 2015, when the Paris Agreement was signed. This was long before the energy crisis or the most recent elections.
One cause of these differences predates the Paris Agreement. It is rooted in the aftermath of the 2008 financial crisis, from which France and Germany emerged in dramatically different ways. Germany’s economy came out stronger than before while the French industry was significantly weakened. It lost half of its share in the national economic output and shed a lot of jobs, especially in rural areas, which exacerbated social tensions. For the French government, the energy transition must be an industrial project that creates jobs. In Germany, on the other hand, there’s a lack of workers to fill available jobs. So much so that this labour shortage could become a major impediment to its energy transition. The German government thus takes a narrower view focusing on the transition’s technical climate and energy dimensions. Understanding these differences is a prerequisite for finding common ground in the future.
Doesn’t this present a great opportunity to intensify industrial policy cooperation in energy production, given that one country is looking for employment opportunities while its neighbour has a lot of job vacancies?
There’s definitely a lot of potential for more cooperation in the energy transition between Germany and France! This starts with energy supply itself and how to achieve a stable system that also includes the rest of Europe instead of thinking only in terms of national supply security. A founding principle of the EU has been that forming a bloc is necessary for its relatively small national economies to stand a chance against the big fish of the global economy. We’re now at point where national navel-gazing has become more popular again, a trend that Europe can ill-afford if it wants to make its green transformation work.
There’s also some ground for optimism. Unlike in Germany, youth unemployment in France is high and the energy sector is probably the only one that could remedy this situation in a short time. Germany and France could try to find an economic model that includes technology transfers, joint research, training, and other measures that show people how they can become part of and benefit from the transition instead of regarding it as a ‘sacrifice’ to be made for climate policy.
The German government coalition has made the economy’s sustainable transformation a trademark of its term in office. And at the end of 2022, together with French economy and finance minister Bruno LeMaire, Germany’s economy and climate action minister Habeck underlined the two economies’ close cooperation on energy and climate. Is this already a sign that closer coordination is in the works?
It’s not only about political declarations. In our free market economies, it’s also about business-to-business cooperation and seizing opportunities offered in both countries, which is already happening at a broad scale. The same goes for research collaboration, for which there are many promising examples as well. Even the administrations in each country have learned from each other’s experience and adapt best practice wherever this makes sense and is feasible – a field the Franco-German Office for the Energy Transition is particularly involved in. A lot is already happening, and no one should wait for some sort of a ‘big bang’ where cooperation ‘booster’ is activated. But through targeted European measures, some dimensions could indeed be sped up in a meaningful way, for example collaboration on hydrogen or raw minerals. Many initiatives are under way in these areas, though they’re often given less attention than disputes.
Would you say that cooperation through ‘informal channels’ is going better than the heavily publicised high-level clashes suggest?
As far as our experience at the Franco-German office goes, this definitely is the case. The relevant ministries are in regular correspondence and there’s also a lot of bilateral cooperation going on at the regional level. In fact, there’s a lot of interest in learning from each other’s experiences at many levels below the national governments. The interest is especially strong on the French side, for which Germany often serves as a sort of benchmark on economic questions, whereas Germany rather measures itself against countries and regions like the US, China, the UK or Scandinavia. This imbalance is not very well-known in Germany, which is a failing in my view. If Germany understood better that it is not only seen as a competitor but also as point of reference in many cases — for better or worse — this could help make the relationship with France more productive.
On the European stage, Germany is often criticised for coming across in a know-it-all manner and eager to impose its solutions on others – even though per capita emissions and other indicators do not necessarily paint a good picture for its climate action success. Is it possible that the French side is sometimes reacting with a rejection of ideas like filling French landscapes with German wind turbines and other green technology, which is ultimately seen simply as industrial competition?
This sentiment certainly exists and we see it in our daily work at the energy transition office. However, without a doubt it’s a minority opinion, even if it often gets much airtime in the media. The dominant view, in my opinion, is that there’s a fair degree of respect for many aspects of the German energy transition’s approach, coupled with a comprehension that France was somewhat slow to act on certain green and sustainable technologies and now has some catching-up to do. Germany’s response to the 2008 financial crisis and the ensuing debt crisis in Europe, which was seen by many as hard-nosed and self-centred, certainly left its marks in France as it did elsewhere in Europe. But in general, there’s rather a sense of curiosity about Germany’s economic prowess.
What about the mood at companies active in the sectors that are most affected by the transformation? Do you see a significant difference in how optimistically they view the challenges ahead regarding decarbonisation and energy efficiency in each country?
For a long time in Germany, planning stability has been at the centre of economic policy. This was shaken in recent years by the inconsistencies and fluctuations in support for renewable power sources, expansion targets, auction design, the regulatory framework or grid expansion. And companies in France face similar challenges. What is needed is more long-term planning stability across Europe. You can see what happens in its in the current push for more renewables. There’s a lack of skilled workers, of infrastructure and hardware everywhere, especially since all of the EU plans to scale up renewable power at the same time. Companies in both France and Germany have similar expectations from their governments in terms of providing support and setting the right regulations in a reliable way, so there’s a lot to be learnt in terms of best practices and synergies.
What kind of regulatory framework and energy infrastructure is needed to take this kind of cooperation to a new level?
The essentials are already in place, for example the internal energy market or the trans-European grid. The grid still needs to be developed further of course, but it has shown what it is capable of during the energy crisis and proven to be a bedrock of social and economic stability. A gas shortage in Germany or a blackout in France would have made the winter 2022/2023 very different, which was only avoided thanks to solidarity and cooperation. Sure enough, there will be some difficulties along the way as the national systems are integrated further. But an integrated system still is much more efficient, reliable and also can be decarbonised faster than a system where each member state tries to become self-sufficient.
