PARIS — French President Emmanuel Macron travels on Wednesday to Kazakhstan and Uzbekistan, where he hopes to secure uranium for his country’s nuclear plants.
The trip comes as geopolitical tensions grow with the EU’s current major suppliers, Niger and Russia.
Macron’s visit to the two countries aims to expand French influence in an area which has strong ties with Russia and is now also growing closer to China, an Elysée official said.
Kazakhstan and Uzbekistan are respectively France’s largest and third-largest suppliers of uranium, which is burned to fuel nuclear plants.
Last summer a military junta took over Niger, which supplies 15 percent of France’s uranium needs, sparking questions as to whether the African country can continue to be a reliable source. Uncertainty has also surrounded imports of Russian uranium since Moscow’s invasion of Ukraine.
“Niger raises questions, Russia could raise questions in the long term [if] the EU imposes sanctions on the nuclear sector. Macron’s visit to Central Asia helps to anticipate those concerns,” said Phuc-Vinh Nguyen, an energy expert at the Jacques Delors Institute think tank in Paris.
Russia’s nuclear sector has not been targeted by EU sanctions so far, but member countries continue to turn away from Moscow. The quantity of uranium the EU imported from Russia fell by 16 percent last year from 2021, while the amount from Kazakhstan rose by over 14 percent.
Earlier this year, Yerzhan Mukanov, CEO of the country’s state-run nuclear firm Kazatomprom, told POLITICO he was seeing increasing interest from Europe, and that Kazakhstan “intends to become a significant contributor to the European nuclear market.”
French nuclear firm Orano is active in Kazakhstan, where it has been operating uranium mines since the 1990s, and more recently in Uzbekistan. Orano President Claude Imauven is accompanying Macron on his trip along with 14 other French executives, including Luc Remont, head of French energy giant EDF.
An Elysée official said that new contracts and business partnerships will be announced during the trip, including in the energy sector.
EDF has also positioned itself to become a supplier of nuclear reactors for Kazakhstan’s first nuclear plant.
The visit comes as Brussels competes with China for influence in the region via investment programs focused on infrastructure.
Both Kazakhstan and Uzbekistan are benefitting from Chinese investment under Beijing’s Belt and Road Initiative, with their presidents attending a high-level meeting on the subject in Beijing in October. The EU is trying to gain influence in the two countries by involvingthem in cooperation and investment projects under its “Global Gateway” initiative, the bloc’s response to Belt and Road.
PARIS — France’s feisty Economy Minister Bruno Le Maire has another opportunity to pick a fight with Washington as a sensitive investment screening case is about to land on his desk.
The French government wants to prevent nuclear-submarine parts supplier Segault from falling into American hands just as France and the U.S. are experiencing new tensions over the Inflation Reduction Act, a $369 billion package of green subsidies and tax breaks that Paris and Brussels slammed as a protectionist move in breach of global trade rules.
The two countries have seen an ebb and flow in tensions in recent years that reached worrying levels back in 2021, when the U.S. infuriated France by snatching away a multibillion-euro submarine contract Paris had signed with Canberra.
Now, the American takeover of the small France-based company with less than 100 employees, which was virtually unknown to most French people until a few weeks ago, is turning into a test of France’s industrial sovereignty ambitions.
Segault’s current owner, Canada’s industrial valves group Velan, is being bought by American industrial machinery giant Flowserve in a takeover deal announced earlier this year. Segault supplies components for nuclear-propelled submarines built by state-owned shipbuilder Naval Group and also makes industrial valves that are used on France’s flagship Charles de Gaulle aircraft carrier. If the deal goes through, Segault would become American-controlled, raising concerns in Paris’ halls of power that Washington would then have access to strategic French technology.
The deal has become a hot political issue in recent weeks, with right-wing MPs urging Le Maire to block the American buyer, and with a surprise left-wing candidate emerging as a bidder.
The government is currently “looking for a French buyer,” according to a spokesperson for France’s defense ministry, who declined to comment on offers received so far, noting that the French economy ministry has the final word on it.
Under French law, the economy ministry must be informed of the takeover of companies in strategic sectors in order to green-light or veto deals. The government confirmed that Segault’s takeover falls within the scope of France’s investment screening powers and will be examined as soon as it is officially notified to French authorities.
Investment screening decisions are first assessed at the technical level within France’s powerful economy ministry, known as Bercy, but they also have a political dimension as they are ultimately taken by the economy minister himself via a decree. In the past, Le Maire has not hesitated to use his veto powers for politically sensitive cases, turning investment screening cases into political battles. In a bid to cast himself as a defender of French industrial jewels, Le Maire widened the scope of investment screening powers in 2019, during his first term.
As in many other EU countries, the scope of France’s veto powers was further extended during the coronavirus pandemic, to prevent the risk that companies weakened by the crisis could be bought by foreign investors. Those new powers, which were meant to be temporary, have been repeatedly extended amid the economic crisis linked to Russia’s full-scale invasion of Ukraine.
The Segault case is also seen as an opportunity for Paris to show its muscle.
For socialist Michel Sapin, who served several times as France’s finance and economy minister, the deal gives the government an opportunity to present itself as a defender of national gems by taking “a braggart position on re-industrialization and industrial sovereignty” that, according to him, has not been backed up by action so far.
MEP Marie-Pierre Vedrenne noted that France’s investment screening won’t discriminate against U.S. buyers | Alexis Haulot/European Parliament
“We can’t deny that we have some irritants with Americans, especially the IRA in this phase,” said Macron’s ally Marie-Pierre Vedrenne, vice chair of the European Parliament’s trade committee, while noting that France’s investment screening won’t discriminate against U.S. buyers.
But Macron’s allies were also quick to insist that Paris’ efforts to take Segault away from its American buyer was not a protectionist attempt to block a U.S. investment.
“The criteria won’t be friendship or mistrust toward Washington,” said a French minister, who was not authorized to speak publicly on the matter, adding that “the context” should not prevent Paris from “controlling some sovereignty aspects” of the deal.
For Vedrenne, Macron’s ally in the European Parliament, “the Americans are first of all in a mindset of prior defense of their interests and we see it with this case … sovereignty is at stake so we have to be vigilant whatever the nationality [of the buyer] is, even if it is an ally, because the defense of the French interests must be examined above all.”
Despite some displays of friendship, tensions between Paris and Washington have risen at a steady pace over recent months and increased after French President Emmanuel Macron told POLITICO that Europe should not be “America’s followers” when it comes to China policy.
Le Maire has also been particularly harsh with the U.S., accusing Washington of using Russia’s war in Ukraine to establish “economic domination” and of breaching WTO rules with its massive subsidy package, the Inflation Reduction Act. Earlier this month, he said that Europe should, much like the the U.S. and China, put first its own industrial interests and stop obeying the free-trade dogma.
Earlier in the month, as he visited Washington, he accused “some” in the U.S. of applying double standards when it comes to trade with China. “I see that the volume of trade between China and the United States has never been so high … we are asking Europe to give up trade that has increased between the United States and China. We don’t want to be the village idiots, who get screwed and let other powers trade with China while we would no longer have the right to do so,” the minister said.
Should France decide to veto the deal, Segault could be carved out from Flowserve’s acquisition of Velan. However it is unclear whether the American buyer would still be interested in buying Velan without Segault.
Le Maire’s quest for a French buyer might be a tough mission to accomplish.
Another former economy minister and “Made in France” champion, socialist Arnaud Montebourg urged Le Maire to block the deal earlier this month and offered to buy Segault together with the help of Pierre-Edouard Stérin, a businessman who in the past has been close to far-right former presidential candidate Eric Zemmour.
A person with direct knowledge of the file but who was not authorized to speak publicly said that it is unlikely Le Maire would back Montebourg’s offer.
BERLIN — Germany’s Christian Democrats, the country’s largest opposition group, are planning to shift away from the pragmatic stance toward China that characterized Angela Merkel’s 16 years as chancellor, claiming that maintaining peace through trade has failed.
It’s a remarkable course change for the conservative party that pursued a strategy of rapprochement and economic interdependence toward China and Russia during Merkel’s decade and a half in power. The volte-face has been spurred by Moscow’s invasion of Ukraine and Beijing’s increasingly aggressive stance — both economically and politically — in the Asian region and beyond.
According to a draft position paper seen by POLITICO, the conservatives say the idea of keeping peace through economic cooperation “has failed with regard to Russia, but increasingly also China.” The 22-page paper, which is to be adopted by the center-right Christian Democratic Union/Christian Social Union (CDU/CSU) parliamentary group in the Bundestag around Easter, outlines key points for a new China policy.
In a world order that is changing after Russia’s full-scale invasion of Ukraine, Chancellor Olaf Scholz last year announced a Zeitenwende, or major turning point, in German security policy. Economy Minister Robert Habeck and Foreign Minister Annalena Baerbock, in particular, have stressed the necessity of a comprehensive China strategy, an idea already mentioned in the coalition agreement to form Scholz’s government. Their ministries have elaborated two different drafts, but a comprehensive strategy is not yet in sight.
“We realize at this point in time, with some surprise, which is why we prepared and presented this paper, that the German government is significantly behind schedule on key foreign and security policy documents,” said CDU foreign policy lawmaker Johann Wadephul.
The foreword to the position paper states that “the rise of communist China is the central, epochal challenge of the 21st century for all states seeking to preserve, strengthen, and sustain the rules-based international order.” The CDU/CSU parliamentary group is open to working out a “national consensus” with Scholz’s government. That consensus, the group says, must be embedded in the national security strategy and in a European China strategy.
The relationship with China is described in the same triad fashion that wasformulated by the European Commission in 2019 and is in the coalition agreement of the current German government. Under this strategy,the Asian country is seen as a partner, economic competitor and systemic rival.
But the CDU/CSU group’s paper says policy should move away from a Beijing-friendly, pragmatic stance toward China, especially on trade. “We should not close our eyes to the fact that China has shifted the balance on its own initiative and clearly pushed the core of the relationship toward systemic rivalry,” the text states.
“I say to this also self-critically [that] this means for the CDU/CSU a certain new approach in China policy after a 16-year government period,” Wadephul said.
The paper calls for a “Zeitenwende in China policy,” too, concluding that Germany should respond “with the ability and its own strength to compete” wherever China seeks and forces competition; should build up its resilience and defensive capability and form as well as expand alliances and partnerships with interest and value partners; and demonstrate a willingness to partner where it is openly, transparently and reliably embraced by China.
The CDU/CSU papercalls for a European China strategy and a “European China Council” with EU neighbors for better cooperation. A central point is also strengthening reciprocity and European as well as German sovereignty.
“Decoupling from China is neither realistic nor desirable from a German and European perspective,” according to the text.
To better monitor dependencies, the paper proposes an expert commission in the Bundestag that would present an annual “China check” on dependencies in trade, technology, raw materials and foreign trade, with the overall aim of developing a “de-risking” strategy.
The EU is in emergency mode and is readying a big subsidy push to prevent European industry from being wiped out by American rivals, two senior EU officials told POLITICO.
Europe is facing a double hammer blow from the U.S. If it weren’t enough that energy prices look set to remain permanently far higher than those in the U.S. thanks to Russia’s war in Ukraine, U.S. President Joe Biden is also currently rolling out a $369 billion industrial subsidy scheme to support green industries under the Inflation Reduction Act.
EU officials fear that businesses will now face almost irresistible pressure to shift new investments to the U.S. rather than Europe. EU industry chief Thierry Breton is warning that Biden’s new subsidy package poses an “existential challenge” to Europe’s economy.
The European Commission and countries including France and Germany have realized they need to act quickly if they want to prevent the Continent from turning into an industrial wasteland. According to the two senior officials, the EU is now working on an emergency scheme to funnel money into key high-tech industries.
The tentative solution now being prepared in Brussels is to counter the U.S. subsidies with an EU fund of its own, the two senior officials said. This would be a “European Sovereignty Fund,” which was already mentioned in the State of the Union address by Commission President Ursula von der Leyen in September, to help businesses invest in Europe and meet ambitious green standards.
Senior officials said the EU had to act extremely quickly as companies are already making decisions on where to build their future factories for everything from batteries and electric cars to wind turbines and microchips.
Another reason for Brussels to respond rapidly is to avoid individual EU countries going it alone in splashing out emergency cash, the officials warned. The chaotic response to the gas price crisis, where EU countries reacted with all sorts of national support measures that threatened to undermine the single market, is still a sore point in Brussels.
European Commissioner Breton especially has led the pack in sounding alarm bells. At a meeting with EU industry leaders Monday, Breton issued his warning on the “existential challenge” to Europe from the Inflation Reduction Act, according to people in the room. Breton said it was now a matter of utmost urgency to “revert the deindustrialization process taking place.”
Breton was echoing calls from business leaders all over Europe warning about a perfect storm brewing for manufacturers. “It’s a bit like drowning. It’s happening quietly,” BusinessEurope President Fredrik Persson said.
The Inflation Reduction Act is a particular bugbear to EU carmaking nations — such as France and Germany — as it encourages consumers to “Buy American” when it comes to electric vehicles. Brussels and EU capitals see this as undermining global free trade, and Brussels wants to cut a deal in which its companies can enjoy the same American benefits.
With a diplomatic solution seeming unlikely and Brussels wanting to avoid an all-out trade war, a subsidy race now looks increasingly likely as a contentious Plan B.
To do that, it will be vital to secure support from Germany and from the more economically liberal commissioners such as trade chief Valdis Dombrovskis and competition chief Margrethe Vestager.
At a meeting of EU trade ministers on Friday, Brussels hopes to get more clarity from Berlin on whether they are willing to break their subsidy taboo.
France has long been calling for a counterstrike against Washington by funneling state funds into European industry to help industrial champions on the Continent. That idea is now also gaining traction in Berlin, which has traditionally been economically more liberal.
On Tuesday, German Economy Minister Robert Habeck and his French counterpart Bruno Le Maire issued a joint statement to call for an “EU industrial policy that enables our companies to thrive in the global competition especially through technological leadership,” adding that “we want to coordinate closely a European approach to challenges such as the United States Inflation Reduction Act.”
Apart from the trade ministers’ meeting on Friday, the idea will also informally be discussed among competition ministers next week. One official said European leaders will also discuss it on the margins of the Western Balkan summit on December 6 and at the European Council mid-December.
Hans von der Burchard, Giorgio Leali and Paola Tamma contributed reporting.
