France and Italy seek to boost EU influence with ‘friendship pact’

Two years ago, France and Italy were so at odds that Paris summoned its ambassador and a spat between the leaders began calling names – but a Franco-Italian “friendship treaty” that President Emmanuel Macron will sign in Rome this week shows how the mood. changed.

Meant to foster closer cooperation on everything from foreign policy to defense and culture, the 60-page Treaty of Quirinale reflects a Franco-German agreement from 1963. The idea was discussed. debated in 2017 by Macron and former Italian prime minister Paolo Gentiloni, but was sunk. the following year by the Five Star alliance and the Italian Nationalist Union, which came into sharp conflict with Paris over the issue of migration to the EU.

Now, the project has been revived under Macron and Mario Draghi, the prime minister of Italy. With the former president of the European Central Bank taking the helm in Rome, Italy’s populist-nationalist impulses were so subdued that even the League supported the treaty.

“Our concern now is to restart negotiations with France,” said Lorenzo Fontana, legislator for the League responsible for the party’s foreign policy.

Politically, the Draghi government wants to use its better relationship with Paris to play a more active role at the European level – especially at a time when Germany is expected to focus more on domestic politics when the new government took power from Angela Merkel.

There are important benefits to France, from a stronger relationship. Strengthening ties will help Macron strengthen the EU’s moderate, Western European core and gain leverage against populists at home, while securing a key ally to back him up during his term. France’s EU presidency from the beginning of 2022.

The bridge between Rome and Paris could also help negotiate a post-pandemic reform to EU financial rules. The Stability and Growth Pact aims to limit government deficits and debt and is currently suspended because of the pandemic. A battle could break out over reform with so-called “thrifty” countries such as Austria, Denmark, Finland and the Netherlands.

However, even with Macron and Draghi in power, things may not go well between the two nations – especially on the business front, which is often the cause of conflict between competing French industries. and Italy.

Talks about possibly selling an Italian arms manufacturer owned by state-controlled defense group Leonardo to a French rival could prove an early test. People close to the deal talks had expected the sale to be discussed during the visit to France, but Italy’s doubts mean a decision could take longer to come to fruition. .

KMW-Nexter, a Franco-German defense joint venture, has made a non-binding offer of 650 million euros to buy Leonardo’s defense systems division, according to several people close to the negotiations. This division consists of two businesses, formerly OTO Melara and Wass, which are leading manufacturers of naval guns, tank turrets and torpedoes. The offer is 200 million euros above the price of the Italian state-controlled shipbuilder Fincantieri.

But a backlash has already begun, with the Five-Star Movement, a senior member of Draghi’s coalition government, saying it opposes “the sale of strategic Italian assets to foreign investors.” “. Democrats, through labor minister Andrea Orlando, and unions have also criticized the idea of ​​buying and selling.

Over the weekend, Orlando, who hails from the Liguria city of La Spezia, where OTO Melara is headquartered, said the problem is not “protectionism”. [but] It is clear that financing the development of foreign groups with national funds is not a smart strategy.”

“I talked to [defence minister Lorenzo Guerini] and I think he’s very clear on this,” he added.

Guerini has been more cautious in his public statements, and some officials in Rome argue that a solution is not simple because Italy wants to participate in the Franco-German European main tank project.

Supporters of the deal say it will help Italy’s defense capabilities by cutting production costs and is a tangible sign of Europe’s growing cooperation in the defense sector. . Critics say Italy will help France eliminate a key competitor in arms production, while putting Italian jobs at risk.

The wariness between French and Italian businesses has led to protracted takeover battles – as well as some bad feelings – in the past. Philippe Moreau Defarges, a former diplomat and senior fellow at the French Institute of International Relations, said: “French industrial groups have acquired a lot of Italian businesses.

In the luxury goods sector in particular, French entrepreneurs like Bernard Arnault and François Pinault have upgraded well-known Italian brands, adding the likes of Loro Piana, Bulgari and Gucci to their empires.

The Italians also expressed concern about the merger in the automotive sector between the French FCA and PSA to form Stellantis. Paris, unlike Rome, owns a minority stake in the combined group, which they say will help it better protect French factories and jobs.

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