France finally warms up to the Dutch in economic security push

France finally warms up to the Dutch in economic security push
Опубликовано: Tuesday, 11 April 2023 08:50

Macron’s trip to Netherlands shows common ground on industrial policy and national security after years of frugal frictions

France and the Netherlands suddenly have a lot in common as Europe’s economic security trumps older frictions ahead of French President Emmanuel Macron’s visit to Amsterdam and The Hague this week.

Macron and Dutch Prime Minister Mark Rutte plan to announce several pacts to work together on semiconductors, quantum computing and nuclear energy as well as a so-called "pact for innovation and sustainable growth” endorsed by business organizations from both countries.

But the Elysée also sees the trip as showing it’s on the same page as the Dutch on championing European industry and being aware of security risks, including export controls of sensitive technology to China.

“Our vision of things has become less of a caricature. It’s not about The Hague being very open [trade-wise] and frugal and Paris being essentially solitary and protectionist. Things are more complex than that," said an Elysée official who was not authorized to be identified when speaking to reporters. There is a “convergence” between the two countries on economic files, the official said.

National security concerns have jumped to the top of the Dutch agenda in recent months. Bowing to U.S. pressure, the Dutch government said in early March that it would impose new export controls on advanced microchip equipment to China — curbing sales by chips equipment supplier ASML, Europe’s highest-valued tech company in an effort to rein in Chinese chip-making efforts.

The Netherlands is also rolling out a new investment screening mechanism that would allow the government to scrutinize ownership changes at companies involved in “sensitive technology.” A Chinese bid for a Delft-based semiconductor startup could even get a national security review.

Macron will also be focusing on chips, attending a round table with representatives from ASML and STMicroelectronics on Wednesday.

Dutch officials describe the warming relationship as a reflection of new global challenges and not a sign that The Hague is suddenly buying into France’s views. Both have frequently been on different sides of draining European debates with the Netherlands one of the ‘Frugal Four’ opposed to expansionary economic policy or collective EU debt.

This time, said a Dutch official who was not authorized to speak publicly, “underlying the French and Dutch positions is the shared understanding that we need to secure our geostrategic position as the EU.”

French officials see this as a welcome change of attitude. Dutch backing for the very idea of a European industrial policy was ”a narrative revolution in this country, probably the most obvious illustration that things are moving in The Hague," the Elysée official said. He warned that there were limits: “We should not talk about [economic] interventionism of the Netherlands, we are not there yet.”

Macron will outline his "vision of European sovereignty" and "economic security" in a speech at the Nexus Insitute in The Hague on Tuesday.

The term should resonate with the Dutch. In their own security strategy, published last week, “economic security” gets a name-check as one of the six national security interests. Dependencies, like Europe’s reliance on Russian gas, could threaten this economic security. The Dutch have been cautious on how far to go without harming industry, with Rutte warning in January that intervention should “not endanger [chips] supply chains."

This love-in can only go so far. Despite the “economic security” rapprochement, the two countries still have plenty to disagree on, such as funding for the European Commission’s upcoming European Sovereignty Fund. Paris has indicated that it wants fresh money for the fund, but the Netherlands has stuck to its frugal stance and insists on first spending existing funds such as the EU’s post-pandemic recovery plan.

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