Indonesia is skeptical of the environmental conditions the EU attaches to trade deals; India showed less interest in cutting a deal before Prime Minister Narendra Modi’s recent election for a third term; and France led a campaign to stop the Mercosur accord, which has been two decades in the making.
Scholz’s speech echoed remarks he made earlier this week to a German business audience, in which he called for the bloc to strike “EU only” trade deals that wouldn’t be subject to ratification by national and regional parliaments — a process that can take years.
Splitting such accords is already a tried and trusted playbook that has delivered agreements such as the EU’s trade deal with Chile. It enables the Council of the EU and the European Parliament to fast-track trade wins while other aspects of an overall deal, such as investment protection, are ratified separately.
Scholz faces complicated negotiations at home as well.
“We will present the draft budget in July,” the chancellor said in his speech to the Bundestag, referring to the country’s estimated €40 billion budget hole.
The survival of Scholz’s government may well depend on whether its constituent parties can come to a budget agreement without a major clash following their calamitous European election results, in which the three members of Germany’s left-leaning coalition together mustered only 31 percent of the vote.
“More security. More cohesion. More growth. These are the priorities for our country. But these are also the priorities for the European Union,” Scholz said.
