EU aims to boost competitiveness - but how?
The European Council has announced innovations aimed at increasing the EU's competitiveness. A controversial report put forward by former Italian Prime Minister Enrico Letta proposes extending the single market to energy, telecommunications and finances and authorising Brussels to grant direct subsidies to companies. Concrete measures are to be agreed after the EU elections. Europe's press suspects that reaching a consensus won't be easy.
Compromise needed
The Süddeutsche Zeitung reacts sceptically to Letta's call for more public spending on the common industrial policy:
“The costs would have to be 'borne collectively'. The only question is: how is this supposed to work? In France, where the calls for subsidies for industry have always been the loudest, there is hardly any financial leeway. President Emmanuel Macron is pushing debt to dangerous levels, and the head of the French central bank is already talking about a 'time bomb'. ... One thing is certain: there will be no Eurobonds in the foreseeable future - the FDP in Germany's coalition government will see to that. So what then? As is so often the case at the EU level, a compromise is needed to lead Europe's economy out of its misery.”
A matter of money
First off, the European capital market must be reformed, Avvenire stresses:
“We need public money, and lots of it, but the 27 member states are particularly divided on this issue - especially when it comes to Eurobonds, which are rejected by the 'hawks' in the north. So in the meantime we must rely on private investment. The problem is that the fragmentation of the European capital markets, which are subdivided into 27 regulations, is a powerful brake. ... Enrico Letta's report speaks a clear language: the investment and capital market system in Europe is in disarray, and this is only confirmed by the capital outflow of 300 billion euros per year to the US.”
Interests too divergent
Le Soir sees many hurdles:
“Restoring the EU's competitiveness will be no easy task. As a rule, the plans and interests of the member states diverge in many respects. The goals of Germany's industry are not the same as those of its French neighbours. Consequently, responses vary as to how the single market can be improved. Thursday's summit lasted several hours, proving that it was not easy to find a solution that would satisfy everyone.”
Sluggish Europe only takes action in a crisis
De Volkskrant says major changes are needed:
“Growing geopolitical rivalry will force the EU to act sooner or later. Europe must defend itself against competition from China, which is flooding the European market with products made using state subsidies. It will also have to find an answer to the dynamics of the US, which distributes billions in climate subsidies simply through tax cuts while the EU is lumbered with complex and bureaucratic subsidy regulations. ... The EU is a union of sovereign states where change only comes about under the pressure of major crises.”