Sunday, January 12, 2025
Islamabad (UrduPoint News International/ Pakistan Point News - 12th January, 2025 ) Donald Trump will be sworn in as president on January 20, but he has already threatened to impose higher tariffs on European products, reduce US support for the war in Ukraine and review funding for the Western defense alliance NATO before taking office.
The 27-member European Union will need to show unity and speak with one voice in the face of the coming turmoil.
However, Germany and France will not have stable governments when Trump takes office, which is why the current leaders of the two countries need to find common ground to deal with Trump’s policies.
The two countries, often called the “growth engines of the European Union”, have the most populous economies in the bloc.
Outgoing politicians and political instability
In Germany, Chancellor Olaf Scholz’s government no longer has a majority in parliament. The country is preparing for early elections on February 23. The latest polls suggest that no party will be able to secure a clear majority, making negotiations to form a coalition government after the elections inevitable.
The instability in France is expected to last even longer. According to the French constitution, new elections cannot be held until July 2025. Until then, the ambiguous majority created since the July 2024 elections will remain. There are three major blocs in the French National Assembly, none of which has a governing majority.
Claire Demesme, a researcher at the Franco-German Center for Social Sciences in Berlin, describes the current political situation in France as "extremely unstable."
"There is no majority in parliament and all three blocs refuse to cooperate," she told DW.
She added that French politics has no tradition of forming multi-party coalition governments like in Germany. "The French political culture is based on confrontation and there is no tradition of compromise, which makes it difficult to form a majority government."
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Faltering economies
The Bank of France expects economic growth to be 1.1 percent in 2024 but has cut its 2025 forecast to 0.9 percent, citing “increasing uncertainty” about growth at home and abroad.
Europe’s largest economy, Germany, is set to enter a second consecutive year of recession in 2024, while the central bank has forecast growth of 0.2 percent for 2025 instead of 0.1 percent.
The bank said the biggest risk factor was the possibility of “increasing [trade] protectionism globally.”
However, Germany’s export-driven economy could get some relief from new agreements to promote free trade. The first step in this direction was taken in December, when the European Commission and the South American trading bloc signed an agreement.
This would create the world’s largest free trade area, covering around 700 million people.
However, it is uncertain whether the agreement will be ratified by the EU member states. France has already made it clear that it will oppose the deal. “In France, big trade deals are viewed much more critically than in Germany,” says Claire Demesme.
In France, there is a perception that the country’s future is no longer in its own hands, which is politically dangerous.”
The lack of unity between Europe’s two leading nations could also be a problem at the start of Donald Trump’s second term. European leaders often appeared cautious during Trump’s first term (2017–2021).
They were unsure how to respond to Trump’s “wrong policy statements” and tweets.
Carsten Brzeski, chief economist at ING Bank, says Europeans are better prepared today than they were eight years ago. He advises European leaders not to react too strongly to Trump’s rhetoric. “Instead, they should focus on their own economies, invest in infrastructure and push for structural reforms.”
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Carsten Brzeski also advocates “closer policy cooperation” between Germany and France. “We know from past experience that if the two largest economies do not cooperate and do not advance the European project, progress in Europe will be very slow.”
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