The diagnosis is made: the European Union is in a “slow agony” economically. The recipes to get out of this lethargy are also written and the leaders of the 27 have the menu card on the table. But they can’t agree on what to ask for. More because of the differences in who pays the bill later. And the bill amounts to 800,000 million euros of investment, public and private, per year according to the calculations of former Prime Minister Mario Draghi, whom the president of the European Commission, Ursula von der Leyen, commissioned a report on the club’s competitiveness.
Draghi urged the EU to get its act together immediately and this Friday he reiterated the message during the informal summit of leaders held in Budapest: “The indications in the report were already urgent given the economic situation we have today and are even more urgent after the elections in the United States.” And Donald Trump became the highlight of the event sponsored by the Hungarian far-right Viktor Orbán, who served as host because he holds the rotating presidency of the Council this semester.
“Everything is on the table and in the coming months, when leaders have to decide on the next multiannual budget, important decisions will have to be made,” said the president of the European Council, Charles Michel, who is already leaving.
“Half a year. We do not have more time,” warned the Hungarian far-right Viktor Orbán, who was the host because he holds the rotating presidency of the EU Council this semester. Although he did not hide his “differences” with the president of the European Commission, Ursula von der Leyen, against whom he regularly attacks, and with other leaders, he tried to put them on the back burner in Budapest: “We will maintain our struggles when we return to Brussels” . “On the issue of competitiveness there was total agreement,” said Orbán, convinced that competitiveness is not an “ideological” issue.
No concreteness
However, the Budapest declaration on the New Pact for European competitiveness includes, once again, all possible tools. “The difficulties we face in terms of competitiveness will require substantive investments that mobilize both public and private financing. We are committed to exploring and leveraging all instruments and tools to achieve our objectives: the multiannual financial framework as an essential means to deliver our strategic priorities; uniting capital markets to mobilize private financing; and the greater participation of the European Investment Bank. We will study the development of new instruments. “We will continue working to introduce new own resources.”
But there is no concreteness. Because there is no agreement on how to finance the needs. “The question of resources is undoubtedly the issue that must be addressed because we know that the investments necessary to do everything we would like to do are many,” said Italian Prime Minister Giorgia Meloni: “That is the real debate.”
Completing the Capital Market Union to achieve, among other things, greater financial strength that prevents the flight of hundreds of billions of euros of savings to other countries, including the United States, is one of the topics that is always mentioned when talking about strengthening the EU. However, the issue is very divisive. Countries such as – Luxembourg, Austria, Bulgaria, Cyprus, the Czech Republic, Ireland, Croatia, the Baltics, Malta, Romania and Slovenia – periodically make clear their opposition due to misgivings about more centralized supervision and consider that it would increase costs for the national financial markets and competitive advantages would be given to larger countries, such as France or Germany.
On the path to banking union there are countries like Germany and Holland that have doubts due to the distrust generated by the banks of some European partners, specifically those in the south, where debt ratios are high or the implications of having a common bond. , among other things.
‘No’ to Eurobonds
And the great debate – and the ghost – is that of Eurobonds. Despite the fact that the reports prepared by Draghi and the also former Italian Prime Minister Enrico Letta, are entrusted to public investment and point to the need to issue joint debt as one of the formulas to get Europe out of lethargy, there is a ‘nein ‘ of some capitals.
“I think that first of all we have to talk about projects, not new debts. When we began debt mutualization due to Covid, we saw that we had to bear together an enormously high interest burden. Successes take time to come, that is, from my point of view, there must be a change of perspective,” Austrian Chancellor Karl Nehammer.
Pedro Sánchez is a defender of this approach, but Germany’s refusal is taken for granted. And this is also where the internal complexities of the member states come into play. “You don’t need a calendar or a strategy, what you need is to convince people. “And which German do I convince?” a diplomatic source asks about the delicate situation of Olaf Scholz at the head of the Government and the possibility of an early election in which Friedrich Merz’s CDU prevails.
The president of the European Commission, Ursula von der Leyen, took the opportunity to vindicate the work she has done in her first mandate, on issues such as promoting start-ups or simplifying processes. “We have started, but we have to go further,” he admitted at the press conference after the meeting in which he recognized that the “innovation gap” with other powers must be closed and “strategic security strengthened.” The German reiterated its commitment to present in the first 100 days of its new mandate the Green Industrial Pact, in which it intends to incorporate tools from the box that Draghi has designed as well as in the strategic dialogues with various sectors, such as agriculture, which have maintained in recent times.
And, between calls for the need to act as soon as possible, time passes without a concrete decision being made while the world continues to move and the threat of a worsening of the protectionist policy in the US and, therefore, of the trade war. increases.
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