The urgent need to strengthen Europe’s economy brought everyone together at the European summit in Brussels on 20 March, which was devoted to competitiveness. The heads of state or government indicated their priorities to the co-legislators, together with a clear timetable. At the centre of the discussions: energy prices, simplification and the completion of the Capital Markets Union (CMU). “All member states, without exception, agree that we need to accelerate our economic agenda”, declared the President of the European Council, António Costa, at the end of the summit.
The EU27 therefore welcomed the Commission’s recent proposals on these three subjects. Efforts to bring down energy prices, for example, must continue. The conclusions on this subject have not changed since the last version of the text (see EUROPE 13603/1). In it, the leaders call on the Commission, the EU Council, the Member States and all other stakeholders to implement by 2025 the actions set out in the Commission's Action Plan for Affordable Energy (see EUROPE 13588/3).
In a similar way, the debate also focused on reducing bureaucracy without giving rise to divisions on the substance. An ambitious timetable was set for adopting the proposed texts or implementing the necessary actions (see EUROPE 13603/1).
The ‘Clean Industrial Deal’ and the first ‘omnibus’ simplification packages proposed by the Commission have also been positively received. “Everyone is already very happy” with the texts, according to Belgian Prime Minister Bart De Wever.
This is particularly true of the action plans for the automotive and steel sectors. In their conclusions on the industry, the leaders even call on the Commission to go further in its actions in favour of car manufacturers: they call for “additional flexibilities in the regulation setting CO2 emission standards for 2025 and ask for a prompt review of the text.
US tariffs. Since competitiveness also depends on trade, several heads of state or government have called for caution in escalating tariffs with the United States. The postponement by two weeks of the first European countermeasures (see EUROPE 13604/9) was welcomed by the Irish Prime Minister, Micheál Martin. “Our view is that Europe has to be strategic in its response, and particularly where we enjoy surpluses”, he said, noting that his country has the Union’s largest trade surplus with the United States. “The wise thing to do is to wait the full presentation from the US on April second and then comprehensively respond”.
Capital Markets Union. On the subject of competitiveness, the heads of state and government discussed capital markets in greater depth at the summit. Together, the EU27 called on the co-legislators to quickly agree on all pending proposals from the 2020 Action Plan on the Capital Markets Union, including on insolvency. They stressed the importance of national initiatives to increase the size and depth of capital markets accessible to citizens and businesses.
In addition, European leaders encouraged the European Commission and EU Member States to promote greater retail participation in capital markets.
They urged the Commission to propose, by 2025, “improvements” to the ‘pan-European personal pension product’ (PEPP) and to widen investment and savings options at EU level. These issues had been clearly addressed the previous day by the Commission in the presentation of its ‘Savings and Investments Union’ project (see EUROPE 13603/5).
With the aim of strengthening business financing, the European Council called on the Commission to put in place a more favourable framework for venture capital and private equity and to propose an optional 28th company law regime, allowing “innovative” companies to scale-up at a European level. The leaders hope that decisive action can be taken by the co-legislators between now and 2026.
There has also been a call to swiftly propose, in 2025, a revised securitisation framework and targeted adjustments to the prudential framework.
On supervision, one of the most controversial issues in financial integration, the European Council called as well for “improving the convergence and efficiency of the supervision of capital markets”.
The EU27 had remained timid on this issue a year earlier (see EUROPE 13393/3). On Thursday, they said it was essential “to complete the assessment of and the work on the conditions for enabling the European Supervisory Authorities to effectively supervise the most systemic relevant cross-border capital and financial market actors”.
“This must not be a blocking factor”, stressed French President Emmanuel Macron. “We will be able to invent, the aim is to move quickly to reduce transaction costs and allow savings to go towards investment, businesses and growth”, he concluded at the end of the European summit.
Euro Summit. For euro area leaders too, there is a “sense of urgency” and a “shared responsibility” to make rapid progress on a Savings and Investments Union.
This subject was raised during the Euro Summit, which took place during the leaders’ debate on competitiveness, in the presence of the Presidents of the Eurogroup and the European Central Bank, Paschal Donohoe and Christine Lagarde, as well as non-Euro area members.
This was an opportunity for the leaders to be briefed on the economic and financial situation, which was described as “resilient”. Going forward, the heads of state or government encouraged the Eurogroup to “remain vigilant in monitoring fiscal policy developments, fostering coordination to contribute to a coherent policy mix”.
The discussion in inclusive format also focused on the digital euro. Paschal Donohoe insisted on the need to move faster on the creation of this tool.
In particular, it could “be a very useful response to global developments in payment technology”, he stressed ahead of the meeting.
The leaders agreed, stating that progress on the digital euro was key to “contribute to Europe’s economic security and strengthen the international role of the euro”.
To see the Euro Summit statement: https://aeur.eu/f/g1c
To see the European Council’s conclusions: https://aeur.eu/f/g1s (Original version in French by Léa Marchal, Bernard Denuit and Pauline Denys, with the editorial staff)