The European Union (EU) is currently facing significant challenges that require urgent attention. These challenges include vulnerable supply chains, high energy costs, and the need for investments to achieve the net zero goal. Addressing these problems is not easy, as they are complex and require careful consideration.
To compete with other major economies like the US and China, it is essential for the EU to leverage its own strengths rather than playing by others’ rules. One way to do this is by permanently allowing European state aid competition, which would disrupt the internal market of the EU but could lead to increased competitiveness in key areas.
Increasing productivity is also crucial, as the EU’s average productivity growth is lagging behind other leading economies. To achieve this, Finland and Sweden are advocating for competitiveness to be at the core of the new Commission’s strategic program. This program will be reviewed by the European Council in June and could help address some of the EU’s long-term economic challenges.
Key actions that need to be taken include reviving the internal market, improving regulation, mobilizing private capital, strengthening the EU’s global role through trade, and making green business more profitable. Clear regulations are needed to attract investments in carbon-neutral sources and sustainable solutions, which can help reduce emissions while creating new opportunities for businesses and entrepreneurs.
Former ECB head Mario Draghi is currently working on a report on EU competitiveness, which highlights how crucial it is for the EU to take swift action to restore its competitiveness if it wants to secure future prosperity, growth, and job opportunities. Time is of the essence in ensuring that Europe remains competitive globally.
The challenges facing Europe are significant but not insurmountable if there are concerted efforts from all stakeholders involved. The EU must work together with member states and private sector partners to develop innovative solutions that can help overcome these challenges while positioning Europe as a leader in global markets.
