By Andreas Rinke and Florence Loeve
BRUEHL, Germany, July 17 (Reuters) - The leaders of Germany and France pledged on Friday to deepen defence cooperation and counter intense economic competition from China, which they said was exerting drastic pressure on Europe through overcapacity and an undervalued currency.
German Chancellor Friedrich Merz and French President Emmanuel Macron met as part of a regular series of joint cabinet meetings, looking to get past tensions over the collapse of a much-touted joint fighter jet project earlier this year.
"We are doing what is necessary to safeguard our freedom, our security and our collective defence," Merz told a joint press conference at which the two outlined a list of objectives including missile defence and long-range strike systems.
Both leaders took aim at China, which they said was not respecting the rules of international trade by offering at least eight times the level of state support to its industry seen in other countries in the Organisation for Economic Co-operation and Development (OECD).
"We are by no means anti-Chinese, either in our diplomacy or in our economy, but we take a clear-eyed view," Macron said, adding that Europe ran up a trade deficit with China amounting to 1 billion euros ($1.14 billion) a day.
COOPERATION ON NUCLEAR DETERRENCE
The two leaders had already outlined proposals for France to cooperate on nuclear deterrence with Germany, following increasingly clear signs from Washington that the United States was looking to reduce its defence commitments in Europe.
"We're taking a step-by-step approach here, and it may well end up resulting in a new doctrine, but it’s far too early to say that today," Merz said, adding that any cooperation would complement existing arrangements within the NATO alliance.
Macron made clear that France would maintain full responsibility for paying for its nuclear deterrent.
"The funding for the French nuclear programme will always be provided by France," he said when asked whether France was considering having Germany contribute to cofund the programme.
The so-called Future Combat Air System (FCAS) is set to continue despite the decision to abandon plans for a common fighter aircraft, with further development on the cloud-based information systems at the heart of the project.
"The remaining projects, including those relating to the cloud and other areas, are continuing to progress between our manufacturers," Macron said.
($1 = 0.8744 euros)
(Florence Loeve reported from Paris, Additional reporting by Miranda Murray, Writing by James Mackenzie, Editing by Timothy Heritage)
