Scholz warns of “outbidding competition” when it comes to arms deliveries

Berlin Shortly before their exchange of blows in the Bundestag, Olaf Scholz and Friedrich Merz still have something to clarify. The tall CDU leader strides towards the government bench, the two speak briefly, the Chancellor nods, Merz nods. Then the exchange of blows in the Bundestag begins. And with the unity of the two, it’s over again immediately.

This Wednesday, the Chancellor is making a government statement in the Bundestag on the forthcoming EU special summit on Thursday and Friday. It is about the EU asylum policy and the European response to the US anti-inflation program (IRA), through which the US is feeding companies with generous subsidies that will produce green technologies in the US in the future.

Before Scholz leaves for Brussels, there will be another heated argument in the Bundestag about the answer to this “attack on the European economy”, which some see as the IRA.

Scholz admits that with the IRA, the USA has rekindled the discussion about an active industrial and location policy for future technologies. However, Scholz clearly rejects expectations of far-reaching decisions at the special EU summit. “An unrestrained subsidy race with the USA would be the wrong approach,” says the Chancellor. In addition, Europe does not need to hide from the USA, “Cassandra calls” are not appropriate.

So far there has been neither a recession nor deindustrialization or a large wave of migration from Europe to the USA, and there will not be any either. “On the other hand, we in Europe certainly have the economic prerequisites and the funding instruments to master the climate-neutral change in industry,” says Scholz. The Chancellor refers to 250 billion euros in the Corona reconstruction fund that are available for the decarbonization of European industry, as well as a number of other EU funds in which there are still many billions. Above all, companies need more flexible and faster decisions by the EU when it comes to promoting companies.

We will take a very close look at “whether and where our programs still leave gaps and how these can then be closed. However, this first requires a careful analysis of the kind proposed by the Commission,” says Scholz.

Scholz: The USA must not put European companies at a disadvantage

In principle, it would be good if the USA “finally” tackled the transition to climate neutrality with determination, says Scholz. But he also demands concessions from the United States. In this way, economic relations between the EU and the USA could be deepened. “Our ongoing talks about the IRA are a good starting point for this – at least if the USA does without rules that put European companies at a disadvantage compared to companies from Canada and Mexico, for example,” says Scholz.

The chancellor warns that climate protection goals cannot be achieved with deglobalisation. Therefore, the EU agreements with New Zealand and Chile should be put into effect quickly and the negotiations with Australia, India and Indonesia should be advanced quickly.

Opposition leader Merz picks up this ball directly. It was the SPD and the Greens who only signed the trade agreement with Canada (Ceta) after “an agonizing seven years”. A trade agreement with South America (Mercosur) has now been negotiated for 15 years, also largely due to resistance from the SPD and the Greens. And a trade agreement with the USA (TTIP) planned in the past decade also failed because of the political left. “You have to do the essential homework in trade and economic policy here in Berlin,” said Merz.

Talks between the head of government and the head of the opposition

Before the Bundestag debate, CDU leader Merz and Chancellor Scholz talked.

(Photo: Reuters)

But the competitiveness of the EU is being paralyzed by Germany of all things because “German speechlessness has prevailed in Brussels for weeks and months” because the traffic light coalition does not agree on the question of a European answer to the IRA. “Thus, the competitiveness of the EU is not being questioned by Brussels, but by the disagreement in your coalition,” Merz Scholz said.

Merz criticizes Scholz Hesitation in arms deliveries

The issue of arms deliveries also led to an exchange of blows between Scholz and Merz. Scholz defends his approach of only delivering main battle tanks to Ukraine after coordination with the alliance partners, which has brought him strong criticism.

In his government statement, Scholz, in turn, dismisses his critics. “What harms our unity is a public outbidding competition along the lines of: battle tanks, submarines, airplanes – who wants more?” warns the chancellor, criticizing politicians for “pithy domestic political statements and criticism of partners and allies on the open stage.” , which should also mean representatives from our own ranks. Dissonance and speculation about possible differences in interests were only of use to the Russian president and his propaganda.

In his speech, Scholz also announced new EU sanctions against Russia. “As the European Union, we will tighten the sanctions against Russia again on the anniversary of the beginning of the war,” says Scholz, referring to the anniversary of the Russian attack on Ukraine on February 24, 2022. Merz, on the other hand, accuses Scholz that large parts of the turning point ” have so far largely taken place on paper”.

It remains “unacceptable that there have been practically no orders and no tenders from the Bundeswehr’s special assets of 100 billion euros,” said Merz. Germany also braked until the end and hesitated to deliver armored personnel carriers, says Merz. “Let’s not hope that wasn’t too little, that wasn’t too late,” said Merz.

Scholz listens on the government bench, his chin resting on one arm. There is no sign of a reaction from the Chancellor.

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