Debate: Conclusions of the recent European Council meetings, in particular on a new European Competitiveness deal and the EU strategic agenda -
Date: TUESDAY, 23 APRIL 2024
Speaker: Ursula von der Leyen
Language: EN

Yet the shockwaves of these crises have taken a toll on Europe’s competitiveness. The business model of many European industries was based on supposedly cheap energy from Russia and trade with a growing China. Today, we face a rogue Russia and a China struggling with domestic demand. And besides geopolitics, there are other trends that are impacting our competitiveness. In the last decade, Europe’s labour productivity has risen by only 0.8 % per year, compared with 1.1 % in the United States. These trends can only be addressed with a concerted effort at both European and national level. Therefore, restoring our competitive edge must be at the heart of Europe’s economic agenda in 2024 and beyond. And I am absolutely convinced that with the necessary push, we can set off a new surge of European competitiveness. At the European Council of last week, we listened to some very good ideas from Enrico Letta on our Single Market. Today, I want to look at four of the basic factors that determine costs, prices and productivity in Europe. Let me start with finance. Since we took office almost five years ago, we have unleashed an unprecedented wave of public investment in strategic sectors. Take energy and clean tech. We are investing EUR 400 billion from NextGenerationEU, and we have approved over EUR 550 billion in national public support, for clean tech and energy investment. This has been crucial. But certainly public investment is not enough. The time has come for a systemic solution that mobilises Europe’s immense private capital. And an essential part of this solution is to complete the Capital Markets Union. EUR 470 billion – this is the additional private investment we could raise every year if we completed the Capital Markets Union – EUR 470 billion! The Capital Markets Union, ‘the CMU’, was launched almost ten years ago. And since the start of the mandate, we have made progress on many of its elements. For instance, we have made it easier for companies across Europe, especially SMEs, to get listed on capital markets. But we have also faced a deadlock in Council, on many crucial aspects of the CMU. So, it is more than welcome that the last European Council marks a turning point, finally. We now have a clear mandate to move forward on three vital issues. First: harmonising national rules on topics like insolvency. This will give investors the predictability they need. Second: We will design and create cross-border savings products for retail investors. And third: The Commission has been tasked to strengthen supervision at European level of the most important market players. So the way forward is clear. If we are to fund the new industrial revolution of our times, we must mobilise Europe’s private capital. And now is the time to turn the political will into action. The second priority is reducing the cost of energy. Energy costs continue to affect our competitiveness, especially for energy-intensive industries. The International Energy Agency tells us that there might be some relief in sight. You remember very well that, last year, during the energy crisis, many investments have been done. A large wave of new LNG export projects is coming to the market. And therefore we might soon be moving from a global shortfall of LNG to an abundance of LNG. As a result, we expect gas prices to decrease, to fall. This gives us space to further develop renewable energies. And I think it is a very telling success that last year for the very first time the European Union was able to produce more electricity from wind than it did from gas. This was a big success.  At this point, I want to thank Parliament, for all the work you have done, the work for example on the reform of the electricity market or the new Renewable Energy Directive. We must keep pushing to produce more cheap and clean energy in Europe. And we must listen to our industries, what they need to reach the climate goals. We have done in so-called Clean Transition Dialogues with ten different industrial sectors. One of their central demands is always energy infrastructure. In our decade now, our cross-border electricity transmission capacity must double. So, this needs investments in smart grids and charging infrastructure, but also cables, pipes, turbines and electrolysers. You just name it. We must build the physical backbone of the economy of the future in order to be competitive.  The third priority is to address the labour and skills shortage that affects our economy and it’s obvious. We have, as I said, very low unemployment, so we need to train as many as possible of our unemployed, specifically have a look at youth unemployment, because, as I said, we have very low unemployment on average – we have higher youth unemployment than average – and every young person has great potential, even if they might be struggling with obstacles of all kinds. Let us make sure that they get the chance they deserve. We also have to increase women’s access to the labour market. Parents need infrastructure, it’s very simple. Affordable and accessible childcare, good schools and flexible working hours are an absolute must. Finally, we can offer more flexible solutions for silver workers to continue their careers, and we need to attract the right talents from abroad. So it’s a whole bundle of activities that have to be done to address the skills shortage. We are investing EUR 65 billion in skills, through NextGenerationEU and the European Social Fund, and skills must continue to be at the heart of our action. Finally, let us never forget that Europe is a trading continent, and we derive a significant share of our prosperity from trade. If it is true that in the next decade 90 % of the most significant growth is happening in regions outside the European Union, well we should tap into it. Our Union is second to none in negotiating trade deals. We have the largest network of trade agreements in the world, with a total of 74 countries. The value of EU trade through these agreements surpassed EUR 2 trillion for the first time in 2022. And beyond exports, we need to secure imports, for example, of the critical raw materials that our industry needs. But, honourable Members, trade also needs to be fair. We need a global level playing field. And we need to address the risks that come with our openness. We need for example tools to address issues of overcapacity that is produced outside the European Union. I am speaking about structural overproduction, an overproduction that is achieved to a large extent by subsidies, massive subsidies. This overproduction has to go somewhere. Others are closing their markets. So our market is an attractive destination and we have to be very vigilant that our producers are not at risk to be forced out of the market. And we also need to involve developing economies around the world on this topic, because their industrialisation is also threatened directly by overcapacity. We need a more structural response with our partners and work on this is starting in the G7. Honourable Members, the last five years have taught us something. Time and again, we have surprised the sceptics, and defied the doomsayers. Because for a strong Europe, if there is a will, there is a way. And our continent will continue to be the global beating heart of industry and innovation. Thank you, and long live Europe.