In the wake of Donald Trump's election, former European Central Bank president Mario Draghi has issued a call for unity among European leaders to safeguard the interests of local producers against potential American trade policies. This plea resonates with Ursula von der Leyen, president of the European Commission, who seeks to enhance European competitiveness. However, the path forward is complicated by conflicting interests among member states, particularly between France and Germany.
The urgency to act is acknowledged, with leaders emphasizing the need for a cohesive trade policy and reforms to the single market and capital markets. Yet, substantial challenges remain, particularly in funding necessary investments, estimated between 750 and 800 billion euros annually. Although the successful post-COVID recovery plan provided 800 billion euros, the requirement for new financing methods, including common bond issuance, is a topic of heated debate.
As the EU grapples with increasing competition from the U.S. and China, it recognizes the risk of economic decline, particularly for Germany. Experts warn that potential tariffs on exports could lead to significant losses and push production back to the U.S. Therefore, ambitious trade agreements and a revitalized internal market become essential.
In a bid to address these issues, the EU is exploring a 'Savings and Investment Union' to channel private savings into a more robust capital market. This approach aims to reduce bureaucratic hurdles and create a more favorable environment for startups. While the backdrop of rising global competition looms large, the commitment to European unity and innovation may hold the key to future prosperity.
