We must not reinvent the wheel, but accelerate and amplify the work already begun in recent months to simplify regulations and diversify trade relations, while devising potential protection instruments for particularly sensitive sectors.
These are the areas on which European leaders will be invited to work on 12 February at Alden Biesen, near Genk, at a new ‘informal reflection’ session devoted to European competitiveness and ways of revitalising EU industries in relation to their American and Chinese competitors.
Ever since the ‘shock’ reports on the subject by former Italian Council Presidents Enrico Letta and Mario Draghi (see EUROPE 13478/1) in 2024 - who will also be present at Alden Biesen - European leaders have regularly denounced the blockages and cumbersome nature of the single market, as well as the EU’s many external dependencies, such as its supplies of critical raw materials. On Thursday, the EU27 will no longer simply be asked to confirm this poor diagnosis.
According to the wishes of the President of the European Council, António Costa, the aim will be to continue to support the moves made since 2024 and to agree on a new “cycle of policies and measures” that can already be implemented in the short term, according to a diplomat on Tuesday 10 February.
While this informal ‘retreat’ is not intended to launch a new European strategy, nor will it result in any kind of final communiqué, it should nevertheless bring together the EU27 in a shared commitment to continue simplifying regulations and reducing administrative burdens for businesses, to stimulate funding for innovation, particularly for SMEs, by mobilising more private capital, and to extol the merits of commercial diversification.
It will also be a “question of the scale of EU action”, according to the same diplomat.
António Costa had also mentioned this in his letter of invitation published on 2 February (see EUROPE 13799/1): although the Member States have different sensitivities on this subject, there will be a discussion on the protection of certain industries, in particular the development and maintenance of these strategic sectors in the EU, whether they be innovative companies linked to artificial intelligence or more traditional, energy-intensive and highly competitive industries such as chemicals, steel, and aluminium.
And while the President of the European Commission, Ursula von der Leyen, also opened the door to this idea in her letter to leaders on 9 February (see EUROPE 13804/1), the Alden Biesen ‘retreat’ could also give a boost to supporters of closer cooperation between willing countries.
According to sources, the mobilisation of private capital to finance new major projects on an EU scale could even fuel a first concrete project for such enhanced cooperation.
Consensus on the objectives, but not yet on the means. In the meantime, the informal retreat of the EU27 will also be an opportunity for some leaders to re-submit some of their favourite ideas for consideration. And not all of them are consensual.
French President Emmanuel Macron already set the tone in an interview with the European press on 10 February, calling for “the launch of a common debt capacity for future spending, ‘Eurobonds’ for the future”. He once again defended the use of a new common loan from the EU27, which would finance strategic investments and enable the EU to “attack the hegemony of the dollar”.
“Today, we have three battles to fight: in security and defence, in ecological transition technologies, and in artificial intelligence and quantum technology. In all these areas, we invest much less than China and the United States. If the EU does nothing in the next three to five years, it will be swept out of these sectors”, he added.
The French President will of course be free to raise any subject he wishes, according to the same diplomat, but the informal retreat is not expected to go into the issue of ‘Eurobonds’, which is more closely linked to the negotiations on the post-2027 Multiannual Financial Framework.
The Frenchman also wants a pillar of European preference and fair competition that would target sectors that have already been clearly identified, according to a source at the Élysée Palace: artificial intelligence, quantum technology, space, ‘cleantech’, ‘biotech’, ‘medtech’, defence, as well as semi-conductors and robotics.
Joint document from Berlin, Rome and Brussels. The Italian, German and Belgian leaders, who convened a new mini-Summit on competitiveness on Thursday morning ahead of the retreat, bringing together around twenty European leaders, have also submitted their ideas in a joint document.
This ‘document’ of common messages, as seen by Agence Europe, emphasises the integration of the single market, the simplification of regulation and the reduction of energy prices, as well as an ambitious trade policy.
But the three countries are more cautious about ‘European preference’, without opposing it. “At a time when openness and integration into global value chains are declining, we must strengthen them. An ambitious and pragmatic trade policy is equally crucial to open new markets and opportunities for Europe’s economy”, the document states.
This implies the rapid conclusion of ambitious free trade agreements, faster negotiations, agreements specific to the EU, and decisive action to combat unfair practices and guarantee a level playing field and the EU’s interests in trade policy. “Such measures, including EU preference schemes, must respect our overall trade policy strategy and preferential partners, be exceptional in nature, limited and proportionate”.
The German government has also published a document outlining its expectations regarding the new measures to be taken on the single market, citing in particular the need for an electronic declaration for the posting of workers.
Link to the joint document: https://aeur.eu/f/ko3
Link to the German paper: https://aeur.eu/f/ko4 (Original version in French by Solenn Paulic with Anne Damiani and Mathieu Bion)