Spanish Prime Minister Sanchez and French President Macron met in Barcelona on Thursday to sign a “friendship and cooperation” treaty to reinforce ties on issues including energy, defense and immigration. 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”. Paris is looking to build stronger ties with its southern neighbors, at a time when its relations with Berlin, which is the building block of the European Union, are showing signs of deterioration.

After signing the treaty, Sanchez said U.S. efforts to boost green technology should not lead to the dismantling of Europe’s industry.

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).

The EU has been concerned that the IRA, which includes a $369 billion spending to tackle climate change, could put European companies at a disadvantage 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 also underlined that the new friendship and cooperation treaty elevated bilateral ties with France 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 defense of its borders and interests, while stressing it would go hand-in-hand with NATO membership.