EU leaders are meeting for a second day in Budapest to discuss the European economy and its competitiveness, as the continent continues to take stock of Donald Trump’s victory in the US presidential elections.
Leaders at the European Political Community summit will hear from Mario Draghi, the former ECB president, whose recent report on competitiveness is due to steer economic policymaking over the next five years.
The summit is a grouping of 47 European countries including the 27 member states of the European Union.
When Mr Draghi issued his 400-page report in September it was hailed as a wake-up call for the European Union to boost its competitiveness amid fears that its economy was in a dangerous decline, relative to the United States and China.
Mr Trump’s victory has only heightened those fears, given that his threatened tariffs on European exports could knock 1% off GDP.
Mr Draghi warned that Europe needed to invest up to €800bn per year to boost innovation, increase productivity, pay for the Green transition and meet Europe’s expanding defence needs, in light of Russia’s invasion of Ukraine.
He also called for painful reforms, a move away from dependencies on critical raw materials from China and the securing of important supply chains.
Otherwise, he said, Europe would face the slow agony of decline.
While EU leaders are taking the report seriously – much of its content will underpin the European Commission’s new mandate – there are divisions over how far Europe should go to enter joint borrowing to meet the huge investment need.
Germany, Europe’s biggest economy, and the EU’s main paymaster, is currently in the throes of a coalition government collapse, and an economic slowdown.
Meanwhile Taoiseach Simon Harris, who is attending the summit, will return to Dublin later and set in motion a General Election campaign for the 34th Dail.
Speaking in Budapest, Mr Harris said he hoped the election campaign would not descend into the tit-for-tat style of Dáil debates.
The Taoiseach also said he is opposed to the EU issuing common debt bonds for defence spending.
He said: “Ireland has very significant concerns in relation to common bonds, not just for the policy reasons … but also the fact that there are so many projects that Europe now needs to fund.
“Every conversation I go to at the European Council now is about new things that Europe must spend money on – really important things, digital transition, [the] climate and competitiveness agenda, addressing infrastructural deficits, defence and security.
“There needs to be a much broader conversation about what the financial framework of the European Union looks like for the time ahead.”
Mr Draghi has suggested that some joint investment in key projects – including defence procurement – could be funded through common debt.
The Taoiseach said: “Our position on military neutrality is well understood. Ireland supports [Ukraine] where it can. It doesn’t support [Ukraine] in relation to weapons or military activity. And the Ukrainian government understands that clearly.”
Mr Harris said the overall message from yesterday’s summit of EU and European leaders was that while US policy would change under president-elect Trump, the EU had to set its own agenda, especially on the issue of Ukraine.
There was now clarity from the United States on its policy direction, he said.
“What does Europe wish to do? There is a real sense of the importance of strategic autonomy, the importance of controlling what we can control here in Europe. No other part of the world owes us a living. As President [Emmanuel] Macron said yesterday, you expect the President of the United States to stand up for US interests. It’s important now that European leaders do all we can to stand up for European interests
“There was a very resolute view from around the table, one which I share, that the European Union must stand with Ukraine. It must stand with Ukraine for as long as it takes.
“The US had its election and it made its decision. But that doesn’t change European values…around the importance of the UN Charter, the importance of territorial integrity.”
Mr Harris said the world was a “a very, very dangerous moment” regarding the Middle East.
He said: “I worry about this interregnum period now and how [Israeli Prime Minister Benjamin] Netanyahu responds to that.
“President-elect Trump is a person who professes his support for peace. I think it is so important that the world speaks with one voice in terms of calling out the humanitarian crisis, the loss of civilian life.
“I know President-elect Trump references the Abraham accords as a moment of success in his last term in office. Is that a pathway back towards getting partners in the region around the table to discuss regional stability?
“A part of that has to be the recognition that Palestine is a state in its own right.”
Article Source – Leaders to discuss EU competitiveness at Budapest summit – RTE
