Brussels: France and Germany confirmed Friday that they had reached a deal aimed at protecting Europe's struggling automotive sector, with agreements on the flashpoint issues of EU car emissions and "made in Europe" components.
The pact, which is likely to shape EU policy going forward, envisages a further relaxing of CO2 emission rules and the inclusion of Britain in a public procurement scheme to bolster European car industries.
"We are driven by a clear ambition: to successfully transform our automotive industry while maintaining our climate goals and our production in Europe," French President Emmanuel Macron said.
Writing on X, Chancellor Friedrich Merz of Germany hailed "a good day for motorists and employment in Germany, France, and Europe."
Paris and Berlin had been at loggerheads on the course Europe should take as it tries to revive a sector that accounts for 13 million jobs and seven percent of the bloc's collective GDP.
Germany wanted less stringent carbon emission targets for carmakers and a broad interpretation of "made in Europe" requirements to include key non-EU trade partners.
France had pushed to preserve the bloc's climate ambitions and to restrict the "made in Europe" public procurement scheme to EU nations.
Berlin won the first argument while Paris carried the day on the latter.
"France and Germany propose a comprehensive package that combines an ambitious European decarbonisation pathway with the regulatory flexibility needed to reflect different market realities and technological conditions," the statement said.
"It also provides concrete incentives for investment, research and development, European production, and resilient supply chains."
'Worst possible move'
The deal makes it easier for carmakers to reach a proposed EU target requiring them to cut exhaust emissions from new vehicles by 90 percent from 2021 levels by 2035.
It also narrows the definition of "made in Europe" proposed by the European Commission to the EU's 27 countries, with an opt-in for a handful of others, notably Britain and Norway, under certain conditions.
The European Association of Automotive Suppliers, an industry group, welcomed what it called a "crucial compromise" that recognised "industry concerns".
But clean-transport advocacy group T&E called it a "historic mistake".
"When drivers are facing record fuel prices and Europe's car industry is under intense pressure from the Chinese, a deal that slows down the shift to EVs is the worst possible move," T&E senior director Anna Krajinska said, referring to electric vehicles.
The pact will need backing from other EU states and the European Parliament to become law, but carries weight given the economic heft of the two signatories.
