Germany and France say climate action must be cornerstone of EU coronavirus recovery

A green recovery will be a key principle in Germany's and France's bid to address the economic damage done by the coronavirus pandemic and the two countries see the European Green Deal as setting the framework for a sustainable stimulus package for the continent's economy.

At a joint video press conference from Paris and Berlin, French President Emmanuel Macron and German Chancellor proposed a 500 billion euro corona recovery fund that aims to strengthen investments to increase investments in particular in the digital and green transitions. The two heads of governments said the EU Green Deal should serve a blueprint for a and economy that should be backed by cross-sector ETS and green recovery roadmaps for each invdividual industry. President Macron said joint EU member state projects, such as European battery cell production, could serve as the basis for ensuring a comprehensive recovery of the continent's key industries.

Ahead of the government head's press conference, ministries from both countries dealing with climate policy released a joint declaration highlighting the role of the industry for a post-coronavirus growth strategy. Germany's environment ministry called the Paris Climate Agreement a "compass" for policy in the wake of the current crisis. "Against the backdrop of the COVID-19 pandemic and its severe economic ramifications, the German-French declaration sends a signal that both states fully back the goal of greenhouse gas-neutrality by 2050 as well as tightening the 2030 target from 40 to 50-55 percent emissions reduction," the ministry (BMU) said. The two influential EU member states said the bloc must remain a pacemaker in climate action and also for a green economic recovery following the corona pandemic, arguing that upcoming EU summits with China and the African Union will be important steps in this regard. 

On the same day, German industry federation BDI presented several proposals for emergency measures to support businesses during the coronavirus crisis, including tax reliefs and rules to boost investments in climate action. "Now is the time for the government to focus on investments in our entire industry as an engine for the economy," said BDI head Dieter Kempf. Private investments in energy efficiency and digitalisation could be boosted by improving amortisation rules that encourage investors to fund new projects even amid uncertain business conditions in the coming years, he said. Kempf also stressed that high power prices remain a burden for German companies competing in international markets. He said a reduction of the surcharges and levies on electricity, such as grid fees, could instantly put money into the pockets of companies and private households alike.

Governments around the world are drawing up emergency plans to cushion the economic effects of the coronavirus crisis. Climate researchers, politicians and companies have stressed the importance of aligning these recovery programmes with emissions reduction targets and making green stimulus packages the standard for dealing with the pandemic's economic fallout. Germany’s state energy ministers have called on the federal government to increase incentives for investments in the energy transition as part of an effort to put the economy back on a growth path.