The diagnosis is made: the European Union is in a “slow economic agony”. The recipes for getting out of this lethargy are also written and the leaders of the 27 have the menu on the table. But they can’t agree on what to ask. More because of differences over who pays the bill later. And the bill amounts to 800 billion euros of investments, public and private, per year according to the calculations of former Prime Minister Mario Draghi, to whom the President of the European Commission, Ursula von der Leyen, ordered a report on the competitiveness of the club.
Draghi urged the EU to act immediately and reiterated the message this Friday at the informal summit of leaders held in Budapest: “The indications contained in the report were already urgent given the economic situation we are experiencing today and the are even more after the elections in the United States. And Donald Trump became the highlight of the event sponsored by Hungarian far-right Viktor Orbán, who was the host as he holds the council’s rotating presidency 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 taken,” declared the President of the European Council, Charles Michel, who is already leaving .
“Six months. We don’t have any more time,” warned Hungarian far-right Viktor Orbán, who was the host as he holds the rotating presidency of the EU Council this semester. If he has not hidden his “differences” with the President of the European Commission, Ursula von der Leyen, against whom he regularly attacks, and with other leaders, he has tried to put them on the back burner to Budapest: “We will maintain our difficulties upon our return to Brussels.” “On the issue of competitiveness, there was total agreement,” said Orbán, convinced that competitiveness is not an “ideological” issue.
No concrete
However, the Budapest Declaration on the New Deal for European Competitiveness includes, once again, all possible tools. “The difficulties we face in terms of competitiveness will require significant investments mobilizing both public and private financing. We are committed to exploring and exploiting all instruments and tools to achieve our objectives: the multiannual financial framework as an essential means to achieve our strategic priorities; unify capital markets to mobilize private financing; and the increased participation of the European Investment Bank. We will study the development of new instruments. “We will continue to work on the introduction of 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 one that must be addressed because we know that the investments necessary to achieve everything we want to do are numerous,” declared Italian Prime Minister Giorgia Meloni: “This is the real debate”.
Completing the Capital Markets 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 the one of the subjects always raised when we talk about strengthening the Capital Markets Union. EU. However, the issue is very controversial. Countries such as Luxembourg, Austria, Bulgaria, Cyprus, the Czech Republic, Ireland, Croatia, the Baltics, Malta, Romania and Slovenia – regularly express their opposition due to their fears of consideration of more centralized supervision and believe that this would increase the costs for the national financial markets and the competitive advantages would be granted to large countries, such as France or Germany.
On the path to banking union, there are countries like Germany and the Netherlands which have doubts due to the distrust generated by the banks of certain European partners, especially those in the south, where the rates of debt are high or implications of a common obligation. among others.
“No” to Eurobonds
And the big debate – and the ghost – is that of Eurobonds. Even if the reports prepared by Draghi and by the former Italian Prime Minister Enrico Letta entrust public investment and emphasize the need to issue a common debt as one of the formulas to get Europe out of lethargy, there is a “new” ‘ from certain capitals.
“I think we must above all talk about projects, not new debts. When we started debt pooling because of Covid, we found that we had to bear an extremely high interest burden together. Successes take time to come, which means in my opinion we need to change our perspective,” declared Austrian Chancellor Karl Nehammer.
Pedro Sánchez is in favor 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 timetable or a strategy, what you need is to convince people. “And which German do I have to convince?”, asks a diplomatic source on the delicate situation of Olaf Scholz at the head of the government and on the possibility of early elections in which the CDU of Friedrich Merz would win.
The President of the European Commission, Ursula von der Leyen, took the opportunity to claim the work she accomplished during her first mandate, on issues such as the promotion of start-ups or the simplification of processes. “We have started, but we must go further,” he admitted during the press conference after the meeting during which he recognized that the “innovation gap” with others powers had to be filled and “strategic security strengthened”. Germany reiterated its commitment to present during the first 100 days of its new mandate the Green Industrial Pact, in which it intends to integrate the tools of the box designed by Draghi as well as in strategic dialogues with various sectors, such as agriculture, which have been maintained in recent times.
And, between calls to act as quickly as possible, time passes without a concrete decision being taken while the world continues to move and the threat of a worsening of the protectionist policy of the United States and, therefore, of the trade war. increase.
