The ambition of the European Union to enhance its competitiveness and catch up with competitors like the United States and China has taken on renewed importance following Donald Trump’s election victory, Mario Draghi has remarked, as skepticism mounts regarding the bloc’s capability.
Prior to his victory in the US presidential race, Mr. Trump cautioned that the 27-member bloc would face a “big price” for not purchasing enough American goods and has threatened a 10% tariff on all imports from the US.
Mr. Draghi, the former chief of the European Central Bank, made his comments during an EU summit where he presented his competitiveness report to the EU leaders.
“The sense of urgency today is greater than it was a week ago,” he informed reporters.
With French President Emmanuel Macron grappling with domestic challenges, the traditionally strong Franco-German alliance that propels the EU is either weakened or fractured.
The European Union is lagging behind its rivals in transitioning towards greener and digital economies, hindered by issues such as limited innovation, bureaucratic hurdles, elevated energy costs, and reliance on China for essential raw materials.
EU leaders endorsed the “Budapest Declaration,” outlining a comprehensive to-do list with deadlines aimed at enhancing the single market, increasing capital for investments, and establishing a unified energy market.
Ursula von der Leyen, the president of the European Commission, stated that her new EU executive would unveil strategies within its first 100 days to assist industry in achieving carbon neutrality by 2050 and present proposals to expand the EU single market by June.
Mr. Draghi has indicated that the bloc requires an additional investment of €750-800 billion annually, but cautious EU nations have already raised concerns about the necessity for some of this to come from shared EU resources.
He emphasized that addressing the fragmentation of the single market and capital markets should take precedence over joint funding.
However, discussions on establishing a Capital Markets Union (CMU) have stalled for a decade due to entrenched national interests, differing business cultures, and regulations across EU members.
The current ECB chief, Christine Lagarde, stated that the bloc must urgently establish a cohesive system to channel private savings toward innovative enterprises on a large scale and consider “new methodologies” to accomplish this, according to officials privy to the discussions.
This is precisely the type of issue that a Franco-German consensus could help resolve, but the two nations are at odds over a French proposal allowing a small group of countries to move forward independently.
Belgium’s Prime Minister Alexander De Croo noted that the EU must unite ahead of Mr. Trump’s anticipated return to the White House, articulate the repercussions of a tariff war to him, and engage in discussions regarding the economic behaviors of their mutual competitor, China.
Simon Harris engages with European Parliament President Roberta Metsola during the Budapest summit.
Earlier, Taoiseach Simon Harris, who participated in the summit before heading back to Dublin to initiate a General Election, voiced his opposition to the EU issuing common debt bonds for defense expenditures.
He explained: “Ireland has significant concerns regarding common bonds, not only for policy reasons but also because Europe has many projects that require funding.”
“Every meeting I attend at the European Council now revolves around new priorities requiring financial resources — crucial matters such as the digital transition, climate and competitiveness agendas, addressing infrastructure deficits, and enhancing defense and security.”
“A broader discussion is necessary regarding the future financial framework of the European Union.”
Mr. Draghi proposed that some joint investment in vital projects, including defense procurement, could be financed through common debt.
The Taoiseach asserted: “Our stance on military neutrality is well known. Ireland provides support to Ukraine where possible but does not assist with weapons or military activities, and the Ukrainian government is fully aware of this.”
Mr. Harris expressed that the overarching message from the previous day’s summit of EU and European leaders was clear: although US policy is expected to shift under President-elect Trump, the EU must establish its own agenda, particularly concerning Ukraine.
There is now clarity regarding the United States’ policy trajectory, he stated.
“What actions should Europe take? There is a strong sense of the necessity for strategic autonomy and the importance of managing what we can within Europe. No part of the world owes us anything. As President Macron stated yesterday, we should expect the President of the United States to prioritize US interests. It is imperative now for European leaders to advocate for European interests to the fullest extent.”
“There was a very strong consensus around the table, which I echo, that the European Union must stand firmly with Ukraine for as long as necessary.”
“The United States held its election and reached a decision. Nonetheless, that does not alter European values concerning the significance of the UN Charter and the importance of territorial integrity.”
Mr. Harris indicated that the current global environment is at a “very, very dangerous moment” concerning the Middle East.
He remarked: “I am concerned about how [Israeli Prime Minister Benjamin] Netanyahu will respond during this interim period.”
“President-elect Trump claims to support peace, and it is crucial for the world to unite in highlighting the humanitarian crisis and the tragic loss of civilian lives.”
“While President-elect Trump regards the Abraham Accords as a prior success in his term, is that a pathway to bringing regional partners together to discuss stability?”
“Recognizing Palestine as a state in its own right must be part of this conversation.”
