(Bloomberg) --

Germany and France renewed calls for a more closely aligned Europe to counter the imperialist ambitions of Russian President Vladimir Putin and to bolster the democratic values that underpin the EU.

German Chancellor Olaf Scholz met with French President Emmanuel Macron in Paris on Sunday to celebrate the 60th anniversary of the signing of the Elysee Treaty, which was meant to seal post-war relations between the two countries.

Now, the two leaders are navigating the effects that Putin’s invasion of Ukraine are having on the Europe’s energy security, social stability and economy. Paris and Berlin represent the core of the European Union as it seeks to reform an economy that can no longer rely on cheap Russian oil or narrow supply lines.

“Today we strive side by side to strengthen the sovereignty of Europe,” Scholz said during a speech at the Sorbonne in Paris. “It’s no longer a question of avoiding a war within our union, it’s about preserving and defending our European peace and our values against centrifugal forces within our union, but above all against threats from outside.”

Transatlantic Ties

Macron and Scholz are expected to discuss how the EU should respond to President Joe Biden’s Inflation Reduction Act, which includes roughly $500 billion in new spending and tax breaks over a decade. The EU argues that the law, passed in 2022, unfairly subsidizes American companies and has threatened to file a complaint at the World Trade Organization over the law. 

Germany and France have urged the US to tweak the law to give European companies more flexibility to take advantage of the credits being offered. But officials in the EU have been growing skeptical that Washington will make meaningful changes to the green investment plan and have started mapping out ways to protect European industry. 

EU leaders will meet in Brussels next month to discuss a response to the subsidy law, which will likely include giving member states more latitude to invest in their own companies and would redirect existing EU money to firms in need. They’ll also discuss how far-reaching any plan will be and, importantly, if it will include new money.

Macron and Scholz will also discuss Russia’s war in Ukraine and urge allies to remain united in the face the economic effects that are roiling Europe. 

European Peace

“In face of perils, we must carry on the ideal of a Europe that is united and in full control of its destiny,” Macron told the crowd at the Sorbonne.  

After Russia invaded Ukraine almost 11 months ago, “our union has not been divided and hasn’t hidden from its responsibilities,” he said. “Our unwavering support to the Ukrainian people will continue in all areas.”

Scholz is under increasing pressure from allies to send German-made Leopard battle tanks to Ukraine, or to allow other countries to re-export from their own stocks. 

Last week, Defense Minister Boris Pistorius said Germany would allow allies to begin training Ukrainian soldiers in the Leopards and that they would make a decision on allowing tanks to be sent to Kyiv in the coming days. 

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