17. 07. 2026
AUTHOR: Neil Makaroff and Tristan Beucler
A year ago, in Toulon, Emmanuel Macron and Friedrich Merz agreed on a common economic agenda focusing on economic security, energy independence, and industrial competitiveness. Since then, the announced “Franco-German reflex” in international and European politics has not been realised in concrete terms. The two countries have not managed to align on the future of the car industry and the shift to electric vehicles; they are still divided on a joint EU investment plan, and they don’t yet agree on a common approach towards China. All crucial issues for the future of the EU’s industry. The EU can only compete against other industrial powers if it is united and takes clear decisions. The Franco-German engine is a precondition for this unity.
The upcoming Franco-German summit in Brühl on 17 July will be President Macron and Chancellor Merz’s last opportunity to reverse this trend and drive the EU’s industrial agenda ahead of a year that will see over half of the EU’s population vote in national elections. And most importantly, in the midst of a major energy, industrial, and economic crisis, this summit gives the leaders a stage to showcase that the Franco-German engine can still be the right duo to address some of the most pressing challenges Europeans face.
Both countries’ industries are struggling in the face of the second Chinese shock. France has long been suffering from deindustrialisation, closing more plants than it opened in 2025, and Germany lost over 127,000 manufacturing jobs in the past year. It is estimated that up to two-thirds of German domestic production is at risk of being priced out by Chinese competitors, and, in strategic sectors, Chinese products cost 30 to 60% less to produce on average than their European counterparts. Germany’s industry is at risk, and France’s reindustrialisation is endangered. The two countries have different starting points, but their competitiveness relies on the same solution: securing the EU’s industrial value chains through a Made-in-Europe policy.
The same is true for the energy sector. France is proud to have an almost fully decarbonised power production thanks to nuclear power and the uptake of renewables, but the transport, heating, and industrial sectors are still too dependent on imported oil and gas. In Germany, the power sector is in the process of decarbonisation, but the rest of the economy is also heavily reliant on fossil fuels. While France and Germany cannot control geopolitics or global gas and oil markets, they can agree on a joint electrification strategy that structurally reduces exposure to geopolitical shocks.
A year ago, both governments agreed on a common direction: electricity infrastructure, a stronger trade policy, a functioning carbon market, a Made-in-Europe policy… Companies from the digital sector, breakthrough innovations, small and medium enterprises, and many others are now expecting them to deliver. Key files such as the Industrial Accelerator Act, the EU Emissions Trading System, the EU’s budget, and the Electrification Action Plan are on the table in Brussels. Paris and Berlin have the opportunity to turn their promises to the industry into reality. Europe’s industrial competitiveness will not be restored by rhetoric alone, and President Macron and Chancellor Merz have a last chance to put their political weight behind a Franco-German engine that boosts European industry, ahead of a major election cycle in 2027.
