The string of conversations about European competitiveness to compete with the United States and China became less concrete this Friday, with the Budapest declaration. With less ambition than initially proposed, the EU leaders have settled a meeting in which there was a feeling ofand urgency to boost the bloc’s competitiveness, especially with the return of former Republican President Donald Trump to the White House. However, the different positions between the Member States are evident on one of the key issues for the future of the EU: how this strategy is financed.
The starting point for the conversation of EU leaders in Budapest was the report on competitiveness prepared by former Italian Prime Minister Mario Draghi. It estimated the financing needs of the block in 800,000 million euros per year and, to this end, it opened the door to a new joint debt issue. They were the main messages of the analysis, however, this last idea is met with the rejection of frugal countries: Germany, the Netherlands or Austria.
“The recommendations of this report are already urgent given the economic situation in which we find ourselves,” indicated the former president of the European Central Bank upon his arrival at the informal Summit of EU leaders in Budapest. “They have become even more urgent after the US elections. “There is no doubt that Trump’s presidency will make a big difference in relations between the US and Europe,” he added.
The Italian has confirmed that the EU must get its act together to reactivate its industrial competitiveness against the United States, since the difference in productivity between both regions is very large. “Big changes are coming and I think what “What Europe cannot do is postpone decisions.”Draghi has asserted, evidencing the bloc’s lethargy in favor of a consensus that has not been reached.
“It’s pretty clear that no one is interested in managing the decline. Make Europe great again, if the “Americans have decided to make America great again,” The far-right Prime Minister, Víktor Orbán, explained his feeling that there is no other way to draw the guidelines to be followed by the European Commission.
The Hungarian also highlighted the divergences between EU governments on the time frame to develop a common strategy. “How much time do we need for the plan to materialize? Six months. By July 1, 2025 we will have to report on what we have achieved of the objectives set today, which ones have been achieved and which ones have not. I don’t think we have more time“Emmanuel Macron has said that we have two years, but I think we only have six months.”highlighted the Magyar politician.
The leaders’ debate was articulated as an ambitious event that would leave behind the lengthy meetings of EU Economy and Finance Ministers and would shape the bloc’s competitiveness strategy. The financing formulas are articulated as the great debate and obstacle to overcome to unite positions among the twenty-seven. The declaration finally speaks of “take advantage of all the instruments” but leave all the doors open.
On the table is: using multiannual budget resources by diverting items from Cohesion and Agricultural funds to competitiveness, advancing the dormant capital market union, blocked in part by the rejection of Germany and Luxembourg to a figure of centralized supervision, greater involvement of the European Investment Bank, a new joint debt issue, or own resources, such as items from the CO2 emissions market.
“First of all, we must talk about projects, not new debts. When we began the mutualization of the debt contracted with COVID, we saw that we had to bear together an enormously high interest burden,” he expressed his opposition to more debt, the Austrian Chancellor Karl Nehammer. The common message before the future tenant of the White House is an appeal to strengthen transatlantic relations and dialogue. “If the United States wants to do something about competitiveness against China, we can work together within the framework of the World Trade Organization,” said the outgoing Belgian Prime Minister, Alexander De Croo. “I think we are allies, it would be stupid for allies to set tariffs on each other.”
Brussels’ next steps
There are three commitments that the head of the community Executive, Ursula von der Leyen, has listed at a press conference. On the one hand, it has established as a priority the adoption of a twenty-eighth “regulation for the entire EU that is accessible and voluntary” for startups to avoid regulatory fragmentation. The second of the commitments to which the German has referred refers to the reduction of polluting emissions. “In the first 100 days of our mandate we will propose the Clean Industry Pact. And, finally, diversify supply so as not to depend on a single supplier.
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