With their safe economic advancement, the USA and China have left the European Union behind. This was also highlighted at the Budapest summit, where it was proven that the member countries are seeking to strengthen their competitiveness. The former president of the European Central Bank and the former prime minister of Italy, Mario Draghi, explained to the 27 heads of state and government that Europe has the opportunity to regain this ability. Draghi made it clear that time does not wait. The re-election of customs fan Donald Trump in the US has made these decisions “even more urgent than a week ago”, he said.
In Budapest, the man who in the period of the severe financial crisis 12 years ago, as president of the ECB, saved the common currency, the euro and the countries of the bloc from bankruptcy, expressed first that 1. Europe must plow every year until 800 billion euros for investments, science, development and infrastructure as well as for defense, so that it can compete with the US and China. The investment quota should increase from 22 to 27 percent of the country’s gross product. The tendency in many member countries to reduce investments should be reversed.
For the financing of public investments, the EU must take joint debts for joint projects. Debts, the burden of which is pro-rated among EU member states, have been taken on jointly at EU level for the first time during the coronavirus pandemic. Urgently needed is a capital market union, i.e. an unrestricted circulation of capital and credit as in the Americas, so that more private financial resources can be mobilized.
The EU must solve its “problem with China”. The economy in Europe is very dependent on the supply chain from China and the People’s Republic as its export market, Draghi said. The EU must oppose partly unfair competition and state subsidies from China. The industry must become more independent from the supply of raw materials and spare parts from China. Important branches of industry and new technology enterprises with development potential should be retained and established in Europe. The conditions for enterprises must be improved. Many firms aiming for growth want to move production outside of Europe. The pressure will increase even more, because the new US president, Donald Trump, aims to impose tariffs on European products in the US. A unified strategy for EU industry is needed to strengthen domestic enterprises, to resolve tax, production area and trade issues.
Decision-making processes in the EU should be shorter and bureaucracy should be reduced. “Europe fails to coordinate when it is necessary. European decision-making rules have not developed further, when the EU expanded and the global environment became more hostile and complex”, explains Draghi in the report presented to the EU leaders.
