The times of open markets and fair competition “are over”, with domestic manufacturers now needing to be given preference, German Chancellor Friedrich Merz proclaimed emphatically last week.
A key discussion topic in recent weeks has been the idea of introducing a “Buy European” mandate for steel procurement in the EU.
Speaking after the “steel dialogue” attended by multiple industry stakeholders at the German Chancellery in Berlin on Thursday, Merz said: “We have been asked to ensure that European and German steel are given preference in procurement. Yes, I agree.”
“This is somewhat different from what we always considered right in the past, when we had open markets, fair competition, and certainly not these tariffs like the ones now being levied in America. Those times are unfortunately over, and that’s why we must protect our markets, why we must protect our manufacturers, and why we must also grant our manufacturers a corresponding preference when it comes to the use of steel in Germany and Europe,” he continued.
Merz went on to thank Deutsche Bahn for agreeing to procure low-emission rail. The rail network operator has entered a pilot project to procure the rail from Saarstahl’s France-based Rail unit, with the first 1,000 tonnes delivered.
“This is the path we want to take together,” Merz commented.
The Chancellor also highlighted the “human and emotional perspective” of the steel dialogue. “We are not talking about abstract economic figures here, but about the fate of a key industry. We are talking about the fate of entrepreneurs, employees, and their families who are counting on and hoping that politicians will commit to preserving these jobs and that German steel will be protected,” he concluded.
The dialogue emphasised the importance of competitive energy prices (see Kallanish passim). The German government said it plans electricity price compensation to provide additional relief for the steel industry through an increase in aid intensity. It also wants to end exemptions from sanctions for semi-finished steel imports from Russia. It supports efforts to negotiate a quota arrangement with the US, advocates CBAM’s extension to downstream steel products and calls for a WTO-compliant export compensation.
Adam Smith Austria
