French President Emmanuel Macron has proposed issuing joint European debt to finance critical sectors such as defense and technology. This move aims to ensure Europe’s sovereignty amidst growing competition from the US and China.
What Happened: Macron, speaking at the World Economic Forum in Davos, suggested the introduction of Eurobonds for priority areas, including defense and technology, reported Bloomberg on Wednesday.
He referred to Estonia’s proposal for Eurobonds to fund defense and Ukraine as examples of such priorities. The European Council President, Charles Michel, also previously mentioned defense bonds, emphasizing their importance.
Macron’s proposal comes as the EU grapples with the need to bolster its defense sector and arms production, particularly in light of the ongoing conflict in Ukraine and uncertainties surrounding US support.
The French President highlighted the need for increased investment in areas such as AI, chips, space, and defense, stating that the next few years will be crucial for Europe to determine its sovereignty.
Macron also stressed the importance of creating a single capital market to stimulate private investment, expressing his willingness to negotiate with a smaller group of countries if the entire EU fails to make progress.
Why It Matters: Macron’s call for joint European debt comes at a time of significant shifts in France’s political landscape. Just days before his Davos address, Macron’s government saw a reshuffle with the resignation of Prime Minister Elisabeth Borne and the appointment of Gabriel Attal, the youngest person to assume the role of France’s second-highest office. Amidst these changes, Macron’s push for Eurobonds and increased public investment aligns with his broader pro-business approach and indicates a strategic focus on bolstering France and Europe’s global competitiveness.
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