Going big for EU industry – POLITICO

Charles Michel is President of the European Council.

Russia’s war in Ukraine presents a new geopolitical reality for the European Union.

Shortly after the Russian attack, the European Council met in Versailles and took unprecedented action to strengthen strategic autonomy. Here, EU leaders laid out plans to strengthen Europe’s defenses, reduce its dependence on energy, and strengthen its economy through technological innovation. These are his three pillars of European sovereignty.

Together with its Member States, the EU is also the largest sponsor of the multilateral system, peace, development When climate change Financing. As one of the leading trading forces, we set global standards that reflect our values.

But now, as we work towards realizing this vision, we need to pick up the pace.

The challenges we face today are very different from those of the pandemic. While COVID-19 was a shock that temporarily put the economy in a coma, the current energy crisis is creating a new landscape. We will now face sustained increases in energy costs. On top of that, Europe’s social market economy means labor and environmental costs are higher than elsewhere, and for good reason.

Taken together, this fundamentally changes our position in relation to our major competitors, especially the United States, which remains the largest oil and gas producer. We also need to rethink how we stay competitive.

For decades, we have strived to build a system based on free trade while ensuring a level playing field for all. On the world stage, free market countries have for years restricted state aid to businesses and pressured China to comply with free market rules. Yet China continues to invest state funds directly in strategically important key industries.

with Inflation control law, our American allies also recently adopted large-scale national aid policies to facilitate the green transition. has set up a package of subsidies and tax credits. This is exactly the same technology that the EU is investing in.

The EU must act smart, fast and at scale to strengthen the economy, especially by investing in clean and digital technologies. It also needs to strengthen its manufacturing capacity to maintain prosperity while ensuring strategic autonomy.

As agreed in December, the European Council will address these challenges at its next meeting in February and should consider four parallel streams of action.

First, we must give Member States more leeway in providing state assistance to their businesses. We must not be naive as our main competitors are increasing public support. Increasing support for strategic industrial companies and SMEs means reform Or at least adapt national aid rules to today’s economic and geopolitical realities.

However, in doing so, we must avoid the trap of each member state setting its own rules. This is fatal to our Single Market and to the level playing field between companies and Member States, which is the key to our success.

Second, we must make the most of available resources and financial instruments, both at national and EU level. This means more flexible spending of important financial instruments in the EU budget and the Post-COVID-19 Recovery Fund. Next GenerationEUbecause most of these funds remain unused.

Third, not all Member States have the same financial instruments to deal with the current crisis. Solidarity is he one of Europe’s greatest assets and a defensive shield. This is especially true in difficult times. for that reason, SURE program, was created during the pandemic to reduce unemployment risk. This will ensure that all member states have access to affordable borrowing to support their businesses and workforce, while maintaining the integrity of the single market and a level playing field.

Finally, we must also think long-term. More private and public investment is needed not only to support today’s businesses, but also to strengthen the industrial and technological base.

We therefore propose to build on the ideas expressed by Commission Chair Ursula von der Leyen and Commissioner Thierry Breton. EU Sovereignty Fund Equity investments in new strategically important projects in green energy, digital technology and defense. The European Investment Bank has the mandate to be the backbone of such projects.

The fund will spur private investment. Close investment gaps that impair long-term growth. And it will also create wealth. Over time, the value of the assets accumulated dwindles the liabilities incurred to finance the initial investment. Also, as the Fund’s assets may eventually be sold to private investors, the Fund may reinvest in the next wave of technological innovation or other key areas of strategic importance to European sovereignty. You can reinvest in

Europe must remain a continent of production and innovation. It takes a new mindset and a do-it-yourself attitude from all of us to support our business and ensure our global competitiveness. Together, we are stronger, more influential and more sovereign.

let’s do it.