Meeting in an inclusive format, the Eurogroup will set out its political priorities to help the European Union catch up in terms of economic competitiveness with competitors such as the United States and China, in a declaration to be adopted on Monday 4 November (see EUROPE 13516/3).
“It is imperative and urgent to address the lagging performance of the European economy by increasing its productive capacity and enhancing its competitiveness through ambitious investment and well-calibrated structural reforms”, reads a draft declaration dated Friday 25 October, a copy of which has been sent to Agence Europe.
According to the Eurogroup, any approach designed to increase productivity and innovation must be a ‘market-based approach’. The ministers will recommend stimulating investment in research and development by attracting private investors through the creation of appropriate investment conditions and by better coordinating public funding at national and European level.
“Mobilising venture capital – particularly for startups and scale-ups – through deep, well-functioning and integrated European capital markets is key to channelling savings and risk capital, both from inside and outside the EU”, the draft statement underlines.
Energy. The deployment of cheap, low-carbon energy is another key factor in the EU’s future competitiveness. The Eurogroup will call for the formulation of a “pan-European strategy”, complementary to national strategies, to plan the green transition and develop electricity networks, in particular via cross-border interconnections.
In their declaration, the ministers are expected to advocate the continuation of trade with the rest of the world within a multilateral system regulated by the WTO, despite the distortions caused by certain international partners. In their view, the EU’s economic security will depend on the diversification of trade and the establishment of robust supply chains.
Internal Market. Another key element of EU competitiveness is the revitalisation and deepening of the internal market as a “pillar of European prosperity and cohesion”. The future strategy for the single market to be presented by the ‘von der Leyen II’ Commission should help to reduce the administrative burden, the ministers stressed.
However, they could warn against the risk of fragmentation of the single market entailed by “the widespread use of industrial policies, particularly at national level”. Any industrial policy will therefore have to be carefully designed, focusing on market failures and creating an environment conducive to investment.
Investment strategies. The Eurogroup is expected to reiterate the “urgent” need to deepen the Capital Markets Union (CMU) in order to mobilise private funds across the EU to meet the growing financing needs linked to the green and digital transitions.
“At a time when public finances have been affected by multiple crises and gradual and sustained fiscal consolidation is needed, the necessary investment should come primarily from private sources”, says the draft statement.
Ministers should call for work to be launched to identify ways of channelling and raising private capital, including through the involvement of the EIB. And they should reaffirm their commitment to implementing the thirteen key measures identified in March (see EUROPE 13368/3).
The adoption of the Eurogroup declaration on competitiveness comes just a few days before the EU27 are due to do the same at the informal European summit in Budapest on Friday 8 November. Discussions on the ‘Budapest Declaration’ are far from over (see EUROPE 13515/10).
See the draft declaration: https://aeur.eu/f/e48 (Original version in French by Mathieu Bion with Bernard Denuit)