Brussels: Europe and the Arabs

The European summit hosted by Budapest, the capital of the current rotating EU presidency held by Hungary, concluded on Thursday and Friday. At the closing press conference, Ursula von der Leyen spoke, along with Charles Michel, President of the European Council, and Viktor Orbán, Prime Minister of Hungary. Von der Leyen said: "On the evening of the first day of the summit, we discussed the results of the elections in the United States. It is our largest economic and trade partner. We share a unique historical bond. Our citizens share millions of friendships across the Atlantic. It is therefore important to build good relations with the new administration from the start. In this way, we will continue to shape a positive transatlantic agenda. Yesterday afternoon, I had the opportunity to congratulate Donald Trump on the phone. We discussed, among other things, the topics of Ukraine, defense, trade and energy. It was a brief discussion on these topics, but of course I look forward to developing these topics." Together.

On the second day, our main issue was Europe’s competitiveness. We identified our strengths first and foremost. For example, compared to our main competitors, we have a longer life expectancy; we have an excellent education system that is not dependent on parental income; we have the lowest level of income inequality – and therefore many social aspects; we have the greatest reduction in CO2 emissions; but we also know that we have areas where we need to improve.
The basis of our discussion was and remains the valuable work of Mario Draghi. A year ago, I asked him if he could prepare such a report on the competitiveness of the EU. This was in preparation for the next Commission session, and it was very well received, as you have seen over the past weeks and months since its publication, and there is a broad consensus that this is the basis for the discussion and for moving forward. It has become increasingly urgent to fulfil the themes set out in this report. It is quite impossible to describe them fully here, but let me highlight three priorities.
First, we must close the innovation gap that we have with our global peers. Above all, it is about spreading digital innovation across our economy. We are very good at doing pioneering research, which is great, but there is a lack of turning the research results into a product and scaling the product to the market in the EU. There are still a lot of barriers to innovation and innovative startups that we see – and that the report sees. The first priority has to be to remove these barriers by simplifying and accelerating, as a first step, to reduce the bureaucracy for these startups. We have already started to do that but we want to go further. What innovative startups are telling us is that it is very difficult for them to go into the single market because they often have 27 different regulations to deal with. So we want to propose the 28th regulation, which says that for these innovative startups, there is access to a single rulebook, a simple and single rulebook for the whole of the EU. It is voluntary. We have about 182,000 innovative SMEs: so this will give them access to the whole single market and give them the possibility to scale up. The goal is actually to use the whole single market to scale up. There are many other paths that we have to work on in the single market. I won’t go into this now, but I just want to say that the Letta report is very useful here, also as a roadmap for the way forward. The Commission will present its strategy in June, based on this report, and we will look at better enforcement of the rules. We want to facilitate cross-border trade, innovation and investment first and foremost.

Speaking of investment: as Mario Draghi pointed out, we need more investment, especially more private capital. It is also essential to increase private capital investment in research and development. So we will work to create a European Union of Savings and Investments because – it was very impressive today to listen to Christine Lagarde – a lot of savings are not converted into valuable investments but are in the bank or in cash. A deep and liquid capital market could benefit from the wealth of these private savings.

Second priority: to develop a common plan for competitiveness, decarbonization and digitalization. We have shown in the past that we can reduce our emissions while growing our economy. But we know that we have challenges to overcome. So in the first 100 days of the new mandate, we will propose a clean industrial deal. This meeting will build on Mario Draghi’s report and on the ten different sectoral dialogues we have had in the past months to ask the industry that has committed to climate neutrality by 2050: What do you need to do to get there? And how can we support you in getting there? The sum of this will be in the Clean Industrial Deal. One of the main topics in this deal will be energy. Energy was also a big topic in the discussion today. We know that overcoming the energy crisis triggered by Russia’s war in Ukraine has been a big challenge, but energy prices are still structurally very high; they need to come down. This is one of the tasks that await us in the new Commission. We discussed the following topics: grids, interconnections, storage, and simpler and faster issuance of permits for renewable energy will be essential here.

The third and final priority that I want to highlight It is to strengthen our strategic security. We know that over-dependence can quickly turn into vulnerabilities. That is why stable and secure supply chains are essential to powering the future of our economy. You all know the issue of critical raw materials: we know that by 2030, for example, at the end of this mandate, the demand for certain minerals will increase significantly. So we need to act now and coordinate at EU level to secure this access. There are two ways to do this: the first way is to diversify, and therefore to establish trading partnerships with other parts of the world, so that we are not dependent on one supplier but have a diversified supply chain of critical raw materials. The second way is more interesting and that is the whole issue of the circular economy. If you recycle, you do not need to source new critical raw materials. And if you look at the latest developments in recycling startups, it is interesting to see how much they can extract from a product that would normally go to waste and extract these critical raw materials or other valuable resources again. We have to follow up on that,” she concluded. “It was a very fruitful discussion on the Draghi report and the roadmap forward.”