Spain, France champion Europe's industry in bilateral summit

Spain-France summit in Barcelona

By Joan Faus

BARCELONA (Reuters) - U.S. efforts to boost green technology should not lead to the dismantling of Europe's industry, Spanish Prime Minister Pedro Sanchez said on Thursday after signing a new bilateral treaty with French President Emmanuel Macron in Barcelona.

The treaty calls on both countries to support the adoption of measures to protect European companies against economic coercion and unfair practices, as well as an "ambitious European industrial policy aimed at strengthening the EU's strategic autonomy and recovery capacity".

The industrial references come amid an intense debate within the European Union on how to respond to government support measures under the U.S. Inflation Reduction Act (IRA).

EU countries fear the IRA, which included $369 billion of investment to tackle climate change, will unfairly disadvantage their companies because many of the subsidies only go to products that are built in North America.

"We welcome the fact that the U.S. is joining the green transition, but we have to reach an agreement so that this transition does not lead to the deindustrialisation of Europe," Sanchez told a joint news conference with Macron.

Macron said it was important to "react in a very pro-active manner" regarding the IRA. "We need to accelerate our green technology, and our 'Made in Europe' strategy," he said.

Madrid said the new friendship and cooperation treaty elevated bilateral ties to a level that Spain only has with Portugal, and was in line with a similar French-German treaty.

The sides also agreed to work together for a stronger European defence of its borders and interests, while stressing it would go hand-in-hand with NATO membership.

About 6,500 Catalan separatists protested outside the museum where the summit took place against Sanchez's position on independence, according to police estimates.

Since assuming power in 2018, the Socialist leader has taken a conciliatory approach on the northeastern region's independence movement after the 2017 separatist push triggered one of Spain's biggest political crises in decades.

Catalonia's regional leader Pere Aragones greeted Sanchez and Macron before the summit, but left before both countries' anthems were played.

(This story has been corrected to change the number of protesters from 65,000 to 6,500 in the ninth paragraph)

(Reporting by Joan Faus; additional reporting by Sudip Kar-Gupta; Writing by David Latona and Joan Faus; Editing by Andrei Khalipm Charlie Devereux and Alex Richardson)