Barcelona Summit: A New Era for France and Spain's Energy and Defence Cooperation
On 23 January, Spanish Prime Minister Pedro Sánchez and French President Emmanuel Macron signed a Treaty of Friendship and Cooperation between the Kingdom of Spain and the French Republic within the framework of the 27th Spanish-French Summit held in Barcelona.
The summit aimed to strengthen the relationship between Spain and France and to address the common challenges facing the European Union. The treaty contains two important points - the development of renewable energy channels and grids, and defence cooperation. The signing of the treaty also means that France now considers Spain as its most important ally after Italy and Germany. This suggests a shift in France's foreign policy priorities towards the southern and western regions of Europe. France acknowledges the growing importance of Spain, especially as a key player in energy governance in Europe and as a strategic location for potential gas pipelines or liquified natural gas (LNG) imports, mostly coming from the US.
One of the main developments at the summit was the signing of an agreement to strengthen cooperation on energy. Spain is connected to the rest of Europe by two gas pipelines that cross the Pyrenees and reach France, making Spain an important energy provider to France. The first of these, Larrau-Calahorra, was commissioned in 1993. In 2013, the Spanish company Eneagás began the construction and management of the Irún gas pipeline, bringing the number of pipelines between Spain and France to two. Both pipelines are mainly managed by Enagás. French companies are also regularly involved in the Spanish electricity, natural gas and renewable energy markets. In 2021, Spain initiated negotiations with France over the construction of a new pipeline across the Pyrenees, the Midcat, as they considered the current pipeline infrastructures outdated and insufficient to meet the energy needs of both countries. The project was initially proposed as a way to improve energy security and reduce dependence on imported natural gas. France, however, did not actively support it, mostly due to the environmental impacts of such a project and its well-developed natural gas infrastructure.
The recent H2MED project has revived the energy governance relationship between France and Spain. H2MED is a corridor that also connects Portugal and unites the Iberian peninsula with France. The initial plan to build the H2MED corridor included the term "renewable hydrogen", which left the door open to interpretation, as it did not mention green hydrogen per se. France, which relies heavily on nuclear energy, pushed for pink and yellow hydrogen produced by their nuclear plants and generators to be included, as it regards hydrogen produced from low-carbon energy sources, such as nuclear, as green hydrogen. Paris considers low-carbon hydrogen essential for the EU to meet its emission reduction targets and create a competitive industry, but its lack of distinction between pink/yellow hydrogen and green hydrogen from renewable energy sources has led Spain to oppose the idea, as Madrid views green hydrogen as the only sustainable energy source.
Tensions over the construction of a gas pipeline between the two countries to export energy to the rest of Europe eased when Paris and Madrid committed to transporting green hydrogen and other renewable gases between Barcelona and Marseille through the H2MED. Both countries pledged not only to energy governance and cooperation with the H2MED, but also to work together to achieve the goals of the Paris Agreement and reduce greenhouse gas emissions. Paris and Madrid bridged their differences in energy governance and committed to working together to increase the use of renewable energy sources, such as solar and wind power, and to promote the use of electric vehicles.
It is necessary to contextualise this cooperation by taking into account the energy governance group between Portugal and Spain. Both countries have been less dependent on Russia for gas and fossil fuels, and now pay lower prices for gas and electricity thanks to the Iberian exception approved in June 2022 by the European Commission and technically due to expire in May 2023. The Iberian exception temporarily introduces a cap on the price of electricity produced by combined cycle power plants in the daily energy auctions of the Iberian Peninsula. As a result, electricity prices in the Iberian pool have fallen from €332/MWh to €149/MWh. Taking into account the levy paid to gas power plants, the net benefit of lower prices overall is €54.25/MWh. Under these circumstances, Spain’s role in geopolitics and energy security is important, given its energy independence from Russia and its geographical position. This may partly explain France's decision to strengthen its ties with Spain.
Another objective of the summit was to reach a consensus on a comprehensive defence and foreign policy agenda. Notably, Macron and Sánchez discussed the need to strengthen defence cooperation between Spain and France. They pledged to cooperate, coordinate, and establish defence standards by increasing the number of joint military exercises and possibly creating a joint military unit for crisis management. They also discussed the need for better coordination of defence procurement in order to use resources in the most efficient way.
Several defence-related issues require further integration between the two countries. First of all, military spending and capabilities have always been major issues between Paris and Madrid. France has traditionally had a higher level of defence spending and a more advanced military than Spain. In 2021, French military spending amounted to 1.95% of GDP. Under a new budget proposal, France's defence budget in 2023 would increase by €3 billion, or 7.4%. This shift in defence spending began in 2017 to meet the NATO requirement to spend 2% of GDP on defence. From the French perspective, the aim is clearly to position Europe as a defence actor through an increase in the defence budget. Macron has pushed to re-energize Europe’s defence policy by insisting on the need for “a common intervention force, a common defence budget and common doctrine to act.”
In contrast, Spanish military spending was 1.37 % in 2021. At the NATO summit in June 2022, Spain agreed to increase its defence spending from 1% to 2% of GDP by 2029, using part of this increase to modernise military equipment, giving priority to Spanish companies for contracts. As we can see, France and Spain still have a significant divergence in defence spending and capabilities. This will hamper cooperation between Spain and France, not only bilaterally, but also in the framework of NATO-EU cooperation and security. With the Russian invasion of Ukraine, Poland and Baltic countries have been pushing for European countries to raise their defence spending criteria to 2% of GDP criteria, which Spain is far from meeting.
France and Spain have also faced some difficulties coordinating joint military operations. For example, the two countries had different approaches to the 2011 NATO-led intervention in Libya, with France taking a more active role in the conflict, while Spain took a more cautious stance. France's permanent seat at the UN Security Council also plays into the fact that the bilateral relation between Spain and France might appear unbalanced. Despite these challenges and differences, France and Spain continue to cooperate closely on security and defence industry matters, both bilaterally and within the EU and NATO framework.
Since coming to office in 2019, Sánchez has attempted to promote a more ambitious foreign policy than his predecessors. The energy and defence developments discussed at the Barcelona summit should be contextualised in the context of Spain’s fifth Council Presidency, from July to December 2023. A strengthened relationship with France will further establish Spain among the club of Europe's most important member states due to France's influence and presence on the international stage, which Spain may not enjoy as much. Given the economic size and political involvement of both countries in the European Union, this commitment to bilateral cooperation should benefit not only the two countries, but also the European Union as a whole.