EU meets in Belgian castle for economic rivalry with US and China
Leaders of the European Union gather at a castle in Belgium on Thursday to discuss how they can compete with a global competitor like China, and a less reliable allie like the U.S. as the rules-based order is thrown into disarray.
Over the past two decades, EU growth has been consistently lower than US growth, with EU innovation and productivity, especially in AI fields, falling behind.
The EU has to deal with Donald Trump’s trade war and, most recently, tariff threats against Greenland. China also imposes restrictions on the export of minerals, which are vital for the 27-nation EU.
The EU is becoming increasingly aware of the need to act now, as it needs more wealth in order to fund decarbonisation, digitalisation and enhance its defense against a belligerent Russia.
The European Council President Antonio Costa will host a "retreat", a brainstorming session, at the Alden Biesen Castle in eastern Belgium, built in 16th century, to discuss how to proceed.
Mario Draghi, former Italian prime minister, and Enrico Letta (authors of two influential 2024 reports on the EU's Competitiveness Challenge and its Single Market) are also invited to express their views.
Reinhildeveugelers was sceptical that the brainstorming session on Thursday would produce more than a "nice statement".
RESPONSE TO TRUMP CHINA RUSSIA
Draghi's report, as former head of the European Central Bank (ECB), has been adopted by the EU, along with a number of European Commission proposals for financing, defense, and reduced regulation, starting in September 2025.
The European Policy Innovation Council, whose Draghi Observatory monitors the uptake of his 383 recommendations said, however, that only 15% and 24% had been partially implemented up until January. It said that progress was incremental rather than transformational.
Letta stated that the glass is "half-full", with progress being made on key initiatives such as services and capital. He said that the EU must complete an energy union as well as a digital one and a capital market across Europe to match U.S. investment in newer infrastructure and companies.
His message to the leaders is to set a goal of completing EU's single market by 2028.
"I believe that is the only way for the European Union to respond to Trump, and the external pressures it is facing from China and Russia as well as the U.S.," he said.
FRENCH-LED MADE IN EUROPE PUSH
All EU countries desire a more competitive union, but they disagree on the best way to achieve it.
Emmanuel Macron, the French president, renewed his call for the EU on Tuesday to engage in more common 'borrowings to invest at scale' and 'challenge dollar hegemony.
France also pushes a "Made in Europe", strategy which would set minimum standards for European content in products bought with public funds.
This approach has caused a split in the EU and alarm among automakers who import many parts for their cars from outside of the EU.
Germany believes that the best way to reduce debt is by increasing productivity. It also emphasizes the importance of trade deals such as those with South American bloc Mercosur which France has rejected due to resistance from French farmers.
Before Thursday's retreat in Antwerp, German Chancellor Friedrich Merz will meet with a few other EU leaders and company heads on Wednesday to discuss the?demands of European business.
"The great thing about European issues is that Europe can fix them if they want to. Siemens Energy CEO Christian Bruch said that a lot of it is about flexibility, less paperwork, and more flexible labor laws.
(source: Reuters)
