EU growth has been persistently lower than that of the United States over the past two decades, with EU productivity and innovation, particularly in fields like AI, falling short.
“Let me take the US example again. One financial system, one financial capital,” Ms von der Leyen said. “Here in Europe, we do not only have 27 different financial systems, each with its own supervisor. But also, more than 300 trading venues across our union. That is fragmentation on steroids. We need one large, deep and liquid capital market.”
Before EU leaders gather in a Belgian castle today to thrash out how they can compete economically with China and the US as the rules-based world order frays, some leaders including France’s Emmanuel Macron and Germany’s Friedrich Merz will convene with company chiefs for an industry summit to hear the demands of European business.
Firms including Europe’s largest steelmaker ArcelorMittal, building materials firm Heidelberg Materials and chemicals group Solvay will make their pitch for stronger EU action to stem industrial decline.
Among business leaders’ asks are that the EU tackles Europe’s high energy prices and step in to stir up demand for low-carbon products.
“The good thing about European problems is that Europe could actually fix them itself if it wanted to. Because a lot is about flexibility, less bureaucracy, more flexible labour laws,” Siemens Energy CEO Christian Bruch told Reuters.
Industry-commissioned research suggested Europe’s economic vital signs are trending downward.
The report by Deloitte found the EU had a clear advantage over international peers in just three of 22 assessed criteria for competitiveness, including use of recycled materials. On energy prices, and the cost to businesses of bureaucracy and other metrics, Europe trailed behind the US and China.
The EU is drafting a law to set ‘Made in Europe’ requirements for goods bought through public contracts, to attempt to reduce its heavy reliance on China for key technologies.
Brussels is also preparing to overhaul its main climate policy, the EU carbon market, which has become increasingly politically sensitive as industries struggle with high energy prices and cheaper imports.
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