LIVE: French President Emmanuel Macron’s special address at Davos

Key Concepts

• Economic Sovereignty: Strengthening a nation’s control over its economic policies and resources, particularly for Europe in the face of global competition.
• Multilateralism: International cooperation and collaboration through institutions and agreements.
• De-risking: Reducing dependence on potentially unstable or unreliable supply chains and partners.
• European Preference: Prioritizing European companies and products within the European market.
• Strategic Autonomy: The ability of Europe to act independently and pursue its own interests on the global stage.
• Global Imbalances: Disparities in economic growth, consumption, and investment between major economies (US, China, Europe).
• Protection vs. Protectionism: Distinguishing between legitimate measures to level the playing field and harmful trade barriers.
• Capital Market Union: Creating a unified and integrated capital market within the European Union to facilitate investment.

France and Europe in a Shifting Global Order

President Emanuel Macron’s address at the Financial Times event centers on the urgent need for France and Europe to adapt to a rapidly changing and increasingly unstable global landscape. He frames the current era as a pivotal moment, comparable to the post-World War II period, demanding decisive leadership and a renewed commitment to economic strength and strategic autonomy.

The Current Global Instability

Macron paints a stark picture of the world, characterized by:

• A Shift Towards Autocracy: A rise in authoritarian regimes and a decline in democratic values.
• Increased Conflict: A record number of wars (over 60 in 2024), with conflict becoming normalized and expanding into new domains like cyberspace and trade.
• Erosion of International Law: A disregard for international norms and the rise of “the law of the strongest,” exemplified by Russia’s aggression against Ukraine and imperial ambitions resurfacing.
• Weakened Multilateralism: The decline of effective collective governance as key economies withdraw from or obstruct international bodies.

The Challenge from Major Powers

Macron identifies two primary challenges to European interests:

• The United States: Criticized for trade agreements that undermine European exports, imposing tariffs, and pursuing policies aimed at weakening European sovereignty. He specifically mentions the unacceptable use of tariffs as leverage against territorial sovereignty.
• China: Highlighted for its massive excess capacities, distorted practices, and export controls that threaten European industries. He points to China’s trillion-dollar trade surplus (one-third with the US, one-third with Europe, and one-third with the rest of the world) and Germany’s recent trade deficit with China as a “game changer.”

A Two-Pronged Response: Sovereignty and Multilateralism

Macron argues that Europe must respond with a two-pronged strategy:

1. Increased Economic Sovereignty: Strengthening Europe’s economic independence and resilience. He explicitly rejects two approaches: passively accepting dominance (“vasalization”) and purely moralizing without action (“marginalization”).
2. Effective Multilateralism: Defending and reforming multilateral institutions to address global challenges through cooperation. He emphasizes that multilateralism is not outdated but essential for serving European interests and promoting a rules-based international order.

The European Strategy for Competitiveness

Macron outlines a three-pillar strategy to enhance European competitiveness:

1. Protection: Moving beyond a naive openness to global markets and implementing measures to protect European industries from unfair competition. This includes:
   • Anti-dumping Mechanisms: Utilizing existing tools to counter unfair trade practices.
   • European Preference: Prioritizing European companies in public procurement and fostering a “European preference” in the market, mirroring practices in the US and other countries. He notes progress in this area and collaboration with Germany to develop an ambitious framework by 2026.
   • Trade Defense Instruments: Strengthening trade defense mechanisms, including mirror measures in response to escalating trade tensions and Asian overcapacity.
   • Foreign Direct Investment (FDI) Screening: Improving the quality of FDI, targeting investments that contribute to European growth and technology transfer, particularly from China.
2. Simplification: Reducing bureaucratic burdens and streamlining regulations to improve the business environment. He emphasizes accelerating the deepening of the single market and ensuring technological neutrality and non-discrimination. He cites recent simplification efforts in the automotive sector as a starting point.
3. Investment: Increasing investment in key sectors, particularly innovation, AI, green technologies, and defense. He calls for a significant increase in the size of the EU budget and for unlocking private investment through:
   • Securitization Programs: Facilitating the securitization of assets to free up capital for investment.
   • Capital Market Union: Completing the Capital Market Union to create a more integrated and efficient capital market within the EU.

Addressing Global Imbalances

Macron identifies key global economic imbalances:

• American Overconsumption: Excessive consumption in the United States.
• Chinese Underconsumption & Overinvestment: Low domestic consumption and excessive investment in China.
• European Underinvestment & Lack of Competitiveness: Insufficient investment and declining competitiveness in Europe.

He stresses that addressing these imbalances requires shared responsibility and cooperation, not blame. The G7 presidency, under France’s leadership, will focus on achieving a shared diagnosis and committing to concrete actions.

France’s Role and Priorities

Macron highlights France’s commitment to:

• Stabilizing its Economy: Maintaining its attractiveness as an investment destination and consolidating structural reforms.
• Low-Carbon Electricity Supply: Leveraging its nuclear energy model to provide a competitive and stable low-carbon electricity supply.
• Innovation Ecosystem: Supporting its vibrant innovation ecosystem, particularly in AI, quantum computing, and energy transition. He cites Yan LeCun’s decision to establish his company in France as a positive example.
• Defense and Security: Increasing investment in defense and security.

A Call for Cooperation and Pragmatism

Macron concludes with a powerful call for cooperation, pragmatism, and a rejection of ideological extremes. He urges leaders to focus on peace, prosperity, and decarbonization, and to avoid division, protectionism, and new forms of imperialism. He emphasizes the importance of respecting the rule of law and creating a predictable environment for investment.

Notable Quote:

“We do prefer respect to bullies. We do prefer science to plotism. And we do prefer rule of law to brutality.” – Emanuel Macron.

This address represents a comprehensive articulation of Macron’s vision for France and Europe in a turbulent world, emphasizing the need for strategic autonomy, economic resilience, and a renewed commitment to multilateralism. The focus on practical measures like European preference and capital market union underscores a pragmatic approach to addressing the challenges facing the continent.