EU | The US stimulus package has caused fears about Europe’s competitiveness

of the EU Commission from the chairman Ursula von der Leyen is expected on Wednesday to offer additional concreteness on how the EU’s competitiveness could be improved.

Competitiveness has quickly become a very central topic of conversation in Europe due to the US green stimulus package. The US package includes a mix of protectionist regulation and roughly $370 billion worth of subsidies, which has been feared to disproportionately siphon investment from Europe.

Von der Leyen has already shed light, for example, at the Davos Economic Forum, on the range of means by which the European Union’s solutions to the problem could be found.

Based on that speech, the solution could be found in four areas, which are different financing solutions, the regulatory environment, i.e. for example the permit processes related to investments, improving the level of expertise and trade agreements with different countries.

Very the most difficult parts of the proposal are related to financing. It is about the fact that von der Leyen and some commissioners and member states of the Union have also hinted at a relaxation of state aid rules in the Union area and a new sovereignty fund as solutions. The latter has, for example, in Finland and some other countries increased the fear of a new European collective debt.

So far, Finland has been given fire support by, among other things, Germany’s cautious approach to the new fund financed by joint debt, but with state aid rules, Finnish decision-makers do not have such a luxury available to them. When it comes to distributing government subsidies, large countries have greater opportunities to distribute money than small countries, which causes suspicion in small countries like Finland that live on exports.

Some of the member countries and commissioners see a fund financed by joint debt as a way to equalize the imbalance between the countries in the ability to distribute state aid.

Next week, the political leaders of the Union region will gather for a summit in Brussels. In this case, the member states get to discuss the outlines of the EU Commission.