Leading economists from Germany and France have jointly developed a reform agenda for Europe’s two largest economies, at the request of the governments in Berlin and Paris. According to documents obtained by the “Frankfurter Allgemeine Zeitung” ahead of a bilateral ministerial meeting in Toulon, the proposals cover a broad spectrum of policy areas, including labor markets, economic growth, energy, defense and relations with China.
Monika Schnitzer, chair of the German Council of Economic Experts and the coordinating economist on the German side, emphasized the urgency of implementing reforms. She noted a limited timeframe for action due to the current political situation in France and the upcoming presidential elections in 2027, stating that “now is the time for action, this represents a historical opportunity.
The research team advocates for increased funding for research and development, modeled on the US system, with a particular focus on directing investment towards projects promising significant technological breakthroughs. In the area of defense, the economists call for a “drastic change in European rearmament strategy” including large-scale technology programs in robotics, space exploration and hypersonic weapons. They also propose the creation of a unified European market for defense goods and a coordinated procurement system.
On domestic policy, the researchers suggest phasing out Germany’s retirement age of 63 and reducing the benefits of income splitting for married couples. Regarding energy policy, they express concern over a “glaring lack of coordination” that they believe jeopardizes both security and prosperity, potentially placing the two largest EU economies “on a collision course”.