France and Germany have agreed to push for a further weakening of the EU’s planned phaseout of new combustion engine cars, a deal that could break a months-long deadlock among member states, business daily Handelsblatt and newspaper Frankfurter Allgemeine Zeitung reported.

In exchange for French support on cars, Germany will back France’s demands for strict “Buy European” rules favouring EU-made products in public subsidies and tenders, Handelsblatt wrote, citing three unnamed sources.

Chancellor Friedrich Merz and president Emmanuel Macron are expected to present the agreement before EU leaders meet in Brussels on 15 October, according to the reports. Until now, the two governments had blocked each other. The German government wanted looser rules for carmakers but rejected “Buy European” requirements, while France wanted the opposite. 

France and six other countries (Sweden, Spain, Denmark, Luxembourg, the Netherlands and Portugal) had formed a blocking minority among member states against diluting the rules beyond what the European Commission had proposed, so France switching sides would likely secure the necessary majority, according to the reports.

At the end of last year, following pressure from Germany, Italy, and carmakers, the Commission already proposed lifting the EU’s effective ban on the sale of new combustion engine cars from 2035 at the end of last year, cutting the target for new cars’ CO2 emissions to 90 percent below 2021 levels instead of 100 percent.

Carmakers could continue selling plug-in hybrids, range extenders and conventional cars after 2035 if they offset the remaining emissions by using low-carbon steel made in the EU, or with e-fuels and biofuels.

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