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PARIS — As world finance leaders collect this week in Washington for the annual conferences of the Worldwide Financial Fund, Bruno Le Maire, the finance minister of France, made clear that efficient French-American cooperation on an overhaul of the worldwide tax system couldn’t masks stark variations on China and different points.
“The US needs to confront China. The European Union needs to have interaction China,” Mr. Le Maire, an in depth ally of President Emmanuel Macron of France, mentioned in a wide-ranging interview forward of the conferences. This was pure, he added, as a result of america is the world’s main energy and doesn’t “need China to turn into in just a few years or in just a few many years the primary superpower on this planet.”
Europe’s strategic precedence, in contrast, is independence, “which implies to have the ability to construct extra capacities on protection, to defend its personal view on the combat towards local weather change, to defend its personal financial curiosity, to have entry to key applied sciences and never be too depending on American applied sciences,” he mentioned.
His remarks mirrored unresolved tensions that got here to the floor final month in a livid disagreement between France and america over President Biden’s choice to supply nuclear-powered submarines to Australia. The deal changed an earlier French contract to promote Australia standard submarines. Mr. Macron was not knowledgeable of Australia’s plans till the final minute.
“Clearly there was no less than an essential misunderstanding between France and america, and there has additionally been, I’d say, misbehavior from the U.S. administration,” Mr. Le Maire mentioned.
The important thing query now for the European Union, he mentioned, is to turn into “unbiased from america, capable of defend its personal pursuits, whether or not financial or strategic pursuits.” Nonetheless, he added, america stays “our closest associate” by way of values, financial mannequin, respect for the rule of regulation, and embrace of freedom.
However with China, he mentioned, “we don’t share the identical values or financial mannequin.”
France and america are striving to restore the harm from the submarine deal, and the French ambassador, who was recalled to Paris in protest, has returned to Washington. Mr. Macron, who will meet Mr. Biden this month, needs to see a larger American dedication to unbiased European protection ambitions that he says could be complementary to NATO, in addition to proof of American respect for European strategic ambitions within the Indo-Pacific area.
Requested if variations over China meant inevitable divergence between america and Europe, Mr. Le Maire mentioned, “It may very well be if we’re not cautious.” However each effort needs to be made to keep away from this, which implies “recognizing Europe as one of many three superpowers on this planet for the twenty first century,” alongside america and China.
An space the place Europe and america have been working in lock step is on monetary reform. Efforts to press probably the most sweeping overhaul of the worldwide tax system in a century are nearing a breakthrough.
Finance ministers of the Group of 20 largest economies are anticipated to again an accord on the I.M.F. conferences as early as Wednesday, following a landmark deal final week by practically 140 nations to create a 15 % world minimal company tax and new guidelines that may power company and expertise giants like Amazon and Fb to pay an acceptable share of tax wherever they function.
The pact, supposed to crack down on tax havens which have drained nations of much-needed income, follows months of negotiations which have included intense behind-the-scenes lobbying by Mr. Le Maire and the U.S. Treasury secretary, Janet Yellen.
Mr. Le Maire mentioned that he had labored “very effectively with Janet Yellen on many key points,” and was decided to enhance the connection between the 2 nations. “However it’s also as much as america to take some selections in the correct path to revive confidence between the 2 continents and between the 2 nations.”
One of many largest lingering factors of competition is over metallic tariffs that former President Donald J. Trump imposed globally in 2018. Officers face tough negotiations in coming weeks. Europeans plan to impose retaliatory tariffs on a variety of U.S. merchandise as of Dec. 1, except Mr. Biden pulls again a 25 % obligation on European metal and a ten % tax on aluminum.
“If we wish to enhance the bilateral financial relationship between the continents, step one have to be for america to elevate the sanctions within the metal and aluminum case,” Mr. Le Maire mentioned. “We’re fed up with the commerce wars,” he added. “It’s clearly not within the curiosity of america and never within the curiosity of the E.U.”
Enhancing financial stability within the wake of the pandemic is essential. Mr. Le Maire has overseen an enormous support program to steer France out of a historic recession that included beneficiant state funding to forestall mass layoffs by subsidizing wages and reduction for companies struggling to pay their payments.
The assist is now being wound down because the economic system stabilizes amid widespread vaccinations. The economic system is predicted to develop 6.25 % this 12 months, whereas unemployment, a political lightning rod six months from a presidential election, is projected to fall to 7.6 % by year-end, the bottom in over a decade.
The rebound is essential as France gears up for its election in April. Mr. Le Maire mentioned he’s beginning a political motion to again the re-election of President Macron.
The far proper is presenting a powerful problem as Éric Zemmour, a author and TV movie star recognized for his anti-immigrant nationalism, positive aspects floor in political polls by tapping into insecurity over immigration and fears of rising financial inequality from globalization.
“You may have extremist events rising all over the place in Europe and all over the place within the Western nations as a result of many individuals are afraid of what’s taking place because of local weather change, as a result of technological revolution, as a result of essential strikes of migration,” Mr. Le Maire mentioned. “One of the simplest ways to combat towards extremist events is to get outcomes,” he mentioned.
However within the nation the place the anti-elite Yellow Vest protest motion raged for a lot of months, beginning in 2018, Mr. Le Maire acknowledged that the frustrations that fueled the mass protests might flare once more in France and unfold to different European nations if inequality worsens as governments attempt to sort out local weather change by shifting away from low-cost gas to renewable power sources.
With the value of power wanted to bridge that transition hitting document highs, “local weather transition stays a danger for all of us, for all democracies, as a result of will probably be very pricey — much more pricey than anticipated,” Mr. Le Maire mentioned.
“I actually assume {that a} new Yellow Vest motion stays potential all over the place inside Europe,” he added. Securing a worldwide tax deal might be essential to assist keep away from that by bringing governments a significant supply of recent income to scale back inequality divides, he mentioned.
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