On Thursday 26 September, the Hungarian Presidency of the EU Council invited Member States’ ministers for the Internal market and industry to pinpoint the elements of the ‘Draghi’ report that they considered most relevant. Hungary’s aim was to provide input for discussions on the future ‘Budapest Declaration’, or the ‘new competitiveness pact’, expected to be launched at the informal summit of heads of state or government on 8 November.
The EU27 agree on the main points of the ‘Draghi’ report, such as the need to bring down electricity prices and to prioritise efforts in strategic sectors. However, there continues to be disagreement on Mario Draghi’s call for massive investment of private and public money to support industry (see EUROPE 13416/1).
“On the analysis made in the report, there is a consensus between the Member States. As for the proposed solutions, that’s another question”, said the Hungarian State Secretary for Economic Strategy and Industry, Máté Lóga.
The Austrian Minister for the Economy, Martin Kocher, believes that “we must not put the cart before the horse” on the question of new financing. “We have a Recovery and Resilience Facility (RRF) that is still well endowed and not fully utilised”. Speaking to the press, he suggested that priorities should be set first, including for strategic sectors, and that funding should only be discussed at a later stage.
Mario Draghi’s specific suggestion of contracting, for the second time, a common debt to finance the competitiveness objectives does not appeal to many members of the Council.
The Finnish Minister for the Economy, Wille Rydman, completely closed the door on new European public investment: “When it comes to EU budget Finland is of the opinion that the budget must remain reasonable and we do not support any instrument funded by debt in the budget. The RRF was an exceptional tool”.
Another source of funding to increase the budget is not necessarily required, in his view: “The question is how large the budget should be. We are of the opinion that it should not be as big as certain Member States are promoting”.
In his report, Mr Draghi mentions investment requirements of up to €800 billion. According to Matevž Frangež, Slovenian State Secretary for the Economy, it is inevitable that this recommendation will be implemented in order to face up to competition from China and the USA: “If we want to reduce the risks of investment in strategic sectors, we will certainly need a contribution and encouragement from the public sector”.
For the time being, we need to focus on the elements on which there is consensus, emphasised Ignacy Niemczycki, Poland’s Secretary of State for Economic Development.
State Aid. The debate on State aid is much the same, with supporters of strict rules and promoters of a degree of flexibility.
The Spanish Minister for Industry, Jordi Hereu, suggested on his arrival at the meeting that it was necessary to allow the emergence of European champions, and therefore to have a certain flexibility in the rules. “The principles of competition in the internal market are fundamental elements, to which we must now add, on the basis of what has happened in recent years, the emergence of European strategies to strengthen European industrial groups capable of competing in the world”, stated Jordi Hereu.
According to Máté Lóga, “there has been some discussion about extending the Temporary Crisis and Transition Framework (TCTF). Some member countries have asked that the good elements of the TCTF be kept alive”. However, when questioned on this subject, the State Secretary did not specify the elements in question.
Internal market. Most of the countries that co-signed the informal document on Internal market barriers (see EUROPE 13487/4) took the floor during the ministers’ meeting to defend their position and call for a horizontal strategy on the Single market by June 2025.
The head of the European Commission’s Internal Market and Industry Directorate-General, Kerstin Jorna, has undertaken to present this strategy next year on behalf of the Commission. However, she pointed out that certain barriers in the Internal market are due to the incorrect application of certain existing rules by the Member States.
Other items. Ministers also formally approved the regulation and associated directives for the Single market emergency Instrument (‘IMERA’) (see EUROPE 13341/10) and the ‘Single European Sky’ (‘SES 2+’) (see EUROPE 13365/1).(Original version in French by Léa Marchal)