EU leaders meeting in Budapest signed a declaration aimed at boosting the bloc's flagging competitiveness. The threat of an “America first” protectionist trade policy promised by President-elect Donald Trump has made this task even more urgent.
There are too many barriers to innovation in this block, and red tape needs to be significantly reduced, especially for startups. Strengthen investment. Facilitate access to capital. European Commission President Ursula von der Leyen said on Friday that it would improve productivity.
“There is broad consensus that this is the basis for moving forward,” von der Leyen said, adding that there is a “single rulebook” planned for startups in the region and a three- to four-fold increase in each country. He emphasized measures to reduce energy prices. EU than US.
European officials are wary of President Trump's imminent return. The reasons for this are not only hostility toward NATO and ambivalence toward Ukraine, but also President Trump's desire to make the EU “pay a heavy price” by not buying enough U.S. imports. There are also concerns about the economic impact of this threat.
The summit's host, Hungarian Prime Minister Viktor Orbán, a Trump ally who regularly clashes with Brussels and many other EU leaders, said: “We are completely in agreement on competitiveness.'' “There were no sharp differences of opinion,'' he said.
In the face of lower growth levels, lower productivity and a shrinking share of world trade than the United States and China, the common goal was to “make Europe great again,” Prime Minister Orban said, adding that the country's competitiveness added, “It's not ideological, it's just practical.”
“Ask not what America can do for you, but what Europe should do for itself,” Italian Prime Minister Giorgia Meloni said at the start of the talks. Europe must find a balance. we know what we have to do. ”
European Parliament President Roberta Mezzola said competitiveness was “not just a buzzword…If Europe had grown at the same pace as the United States since the beginning of this century, there would have been 11 million more jobs in Europe.” Ta. We must act, not just react to the U.S. election. ”
The basis for the summit was a scathing report by former Italian Prime Minister and European Central Bank President Mario Draghi, who warned that unless action was taken to end years of stagnation, the European Central Bank would It warned that it faces a “slow and devastating decline”.
Draghi's report says the coronavirus pandemic and the war in Ukraine have changed the rules of international trade, and calls for up to 800 billion euros a year of additional investment in the region's economy, more than the EU's annual economic output. This corresponds to approximately 5% of the total.
Draghi's proposal to finance urgently needed additional investment includes the controversial option of more general borrowing, which is a challenge for traditionally more “frugal” countries in the region such as Germany and the Netherlands. This is an abominable prospect for many countries in the world.
Draghi presented a detailed report on Friday to the 27 EU heads of state and government attending the summit, saying the EU could no longer block important decisions and adding: “The sense of urgency today is greater than last time.'' It's big,” he added. 1 week ago.
“We have postponed too many important decisions to find consensus. [among EU member states]'' Draghi told reporters. “That consensus has not been reached, and as a result, economic growth has declined and is now stagnant.”
He said common borrowing, first carried out by member states to finance the pandemic recovery fund, was essential, but the priority should be a “true single capital market” with investment and savings flowing to all member states. said.
The Summit recognizes the broad conclusions of Draghi's report and calls for deregulation, strengthening key sectors such as defence, biotechnology and artificial intelligence, ensuring a level trade playing field and “exploring”4 Approved the page-long “New European Competitiveness Agreement.'' New public and private financing options.
Analysts were not impressed. “European leaders' initial statements do not give the impression that they understand the scale of the challenge that a second term for President Trump poses,” said Mujtaba Rahman of the Eurasia Group. “Europe is not ready for this,” said Ludovic Soubran, chief economist at Allianz.
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Prime Minister Orbán reiterated the line he took on Thursday, saying Europe needs to reconsider its aid to Ukraine, another urgent challenge facing the country after Trump's victory. “Americans will stop this war. First of all, they will not encourage it.
“Europe cannot finance this war alone…Some people still want to continue pumping huge sums of money into this lost war, but are careful to argue that…we should adapt to the new situation.'' “The number of people doing so is increasing,” he said.
The EU's response to economic woes and President Trump's re-election has been hampered by the political crisis gripping its two largest member states. Germany's coalition government collapsed on Wednesday, and French President Emmanuel Macron has not won a parliamentary majority since losing a snap election. In July.
German Chancellor Olaf Scholz nevertheless insisted that the EU could deal with any trade war launched by President Trump. “I don't think we should speculate too much on this issue with the US. The EU has the capacity to do what is needed.
“But we should all clearly call for a conversation,” he said. Von der Leyen said the EU's approach to changes in U.S. trade policy when Trump returns to the White House in January will be to “engage, consider common interests and then negotiate.” said.
Diplomats and analysts say there are good and bad sides to the crisis in Germany's government, sparked by Scholz's firing of liberal finance minister Christian Lindner and the collapse of the three-party coalition. I was looking at it.
Many were encouraged by Lindner's extremely frugal departure. “With Mr. Lindner in place, there was no way to discuss a more ambitious long-term budget or stronger defense funding at EU level,” said one diplomat.
Some hoped that even if Germany's new government took months to form, it would prove more constructive on the European stage than the current coalition. Berlin often abstained from important votes due to the coalition government's constant internal disagreements and infighting.
