Auto Pact with Paris: Klingbeil Sees Himself 'in the Final Stretch'

TVS News AI, editorially supervised, presents Auto Pact with Paris: Klingbeil Sees Himself 'in the Final Stretch'.

German Finance Minister Lars Klingbeil announced at the meeting of finance ministers in Bangkok that Germany and France are on the verge of a joint initiative to support the European auto industry. They are "in the final stretch of an agreement," said the SPD politician – against the backdrop of an industry groaning simultaneously under the onslaught of cheap Chinese electric cars and EU climate requirements.

The initiative comes at a time when Europe's manufacturers are visibly under pressure – "not least because of competition from China in electric vehicles," as focusplus puts it. Heise online likewise points to the heightened competitive pressure from Asia as the driving force behind the Franco-German project.

What Paris and Berlin are concretely planning

According to the Association of International Motor Vehicle Manufacturers (vdik) and the Stuttgarter Nachrichten, the package is to tackle three main levers: better framework conditions for innovation and investment, competitive production costs on European soil, and a Europe-wide coordinated industrial policy. According to several agencies, Klingbeil explicitly spoke out in favor of a "Franco-German auto initiative."

More concrete is a Franco-German paper reported by "Handelsblatt": According to it, manufacturers would, from 2035 onward, only have to reduce their average emissions by 90 percent compared with the reference value – a significant postponement versus the previously discussed de facto phase-out of combustion engines. Klingbeil's line clearly targets more flexibility for the domestic industry.

Where the project stalls

So much for the theory – the agreement is far from sealed. As POLITICO reports, the Franco-German paper on "Made in Europe" and car emissions is being delayed; the SPD is raising objections. Without the backing of his own Bundestag faction, Klingbeil will not be able to push the package through in Berlin.

A second brake is added on top: Even if Paris and Berlin ultimately come to terms, the whole thing must "still go through a European process," according to POLITICO – Brussels thus becomes a second filter. It therefore remains open in what form the initiative will actually reach the manufacturers.

What this means for the industry

Germany and France can jointly ensure that growth in Europe remains possible in the future.

The Association of International Motor Vehicle Manufacturers is openly campaigning for the Franco-German initiative. How many of the announced measures will ultimately hold up – and whether the planned easing of fleet emission limits from 2035 will stick – will only become clear once the completed paper is presented.