Although the result of the European elections in France turned democratic life upside down with the almost immediate announcement of new legislative elections, the European Parliament’s centre of gravity did not change much after these elections. For Laurence Boone, the heavy economic and financial issues remain, and are all the more important.
The European calendar should not be affected by the French elections since the President of the Commission should be appointed to the European Council before the 1stround of the legislative elections. However, it is indeed a major upheaval that the next European executive must be preparing to lead.
This five-year European mandate is one of “radical change” to use the words of Mario Draghi, former President of the European Central Bank and the Italian Council: a surge in competitiveness and a change in the economic paradigm, and a change in the economic paradigm.eEurope of Defence, enlargement, these are the three main themes that will dominate the executive’s agenda.
An urgent boost to competitiveness
The surge in competitiveness, to say the least, is urgent. China has been pursuing an aggressive industrial policy for decades. It subsidizes its companies while moderating wages and the evolution of its currency to benefit from competitive advantages in defiance of all the rules of international trade. And it is also investing massively in research to lead the race in many areas, including the crucial energy transition for Europe. In practice, it dominates the production chain of renewable energies and electric vehicles. The United States, for its part, has reacted with the Inflation Reduction Act, a program that aims to protect the production of clean technologies, particularly in the automotive industry, on American soil. The European reaction must gain momentum.
The new Commission will therefore have to respond very quickly with a European strategy. This must be based on three pillars. Finalise the Europe of energy to guarantee a decarbonised offer at a competitive price to companies, which is the basis of competitiveness. To protect the European market, without falling into isolationism, and by guaranteeing competition without excess but sufficient to continue to innovate. Strengthen investment in infrastructure and R&D, and free up private finance to European companies.
Organising European defence
European defence has long been the subject of abortive attempts. Then, the peace dividend has led to less investment in the defence of European soil, a fragmented industry with Europeans who compete with each other and cooperate little, to export a large part of European production. The difficult beginnings of European support for the Ukrainian military have clearly shown this: we are still struggling to provide Ukraine with the weapons and ammunition it needs, European production is insufficient and inadequate. The second priority will therefore be to organise European defence. Let’s go on a long way: it is not a question of creating a common army, our armies are already cooperating within the framework of NATO and with European operations, but of accelerating the growth of our defence equipment production capacities. To do this, we will have to give visibility to defence companies with military programming laws in all the countries of the European Union; to get our companies to work together to meet orders, equip our armies in a coordinated manner and prepare us to respond better and faster to hybrid attacks.
Finally, the question will arise of the reforms necessary to ensure that future enlargement takes place in the best possible conditions. Let’s not be naïve, reaching out to neighbouring countries means avoiding areas of destabilisation on our borders. This security comes at a price: in view of the current budget and European governance, with unchanged policies, this price will be high. This is why we need to change the budget as well as the governance of the European Union. We will not do with 35 what we do, sometimes with difficulty, with 27. The single market must remain the foundation. The British counter-example clearly shows that harmonised rules for European trade are the simplest and most promising framework for our companies, and the jobs that go with it. The reforms suggested in the Draghi and Letta reports will improve it. But again, we won’t do everything with 35. Let’s take the case of the defence industry: it is present in 6 countries mainly, and the United Kingdom is a key player. It is therefore logical that this group of countries should work together to move it forward and define its budgetary contours. We could envisage groups or circles in the same way for the quantum computer or social convergence (which is only possible, at least initially, between countries with similar salaries and social systems).
Three levers for a larger budget
The The European budget as it exists today cannot ensure these ambitions, from the reconstruction of Ukraine to the deployment of carbon-free energies, including a real industrial policy and investments in artificial intelligence. We have three levers for a larger budget. Private financing (as we know, American regulations, but also the existence of pension funds, favour the financing of individuals more than ours, and therefore that of these individuals in our companies), private-public cooperation (with or without European public guarantee systems), and an increase in the Union’s resources (thanks to a digital tax, customs duties on products that do not meet our standards, and another loan for well-identified projects).
The task is heavy, but the Europeans have proved, especially in difficult times, that they know how to show great ambitions in historic turns.
