Speech by President von der Leyen at the European Parliament Plenary on the conclusions of the special European Council meeting of 17-18 April 2024

Thank you, Madam President,

Honourable Members,

Indeed, competitiveness was the topic of the European Council. And Leaders taking the floors recalled that since the last European elections, our Union has really weathered two crises of historic proportions. The COVID-19 health crisis and the war in Ukraine, with a ‘made-in-Russia’ energy crisis. They could have turned into a dramatic economic and social crisis. But they did not. This was because of Europe’s great resilience but also because we put the right policies in place. Think of SURE, SURE saved 40 million European jobs. Or think of NextGenerationEU or REPowerEU, which fast-tracked the recovery and the deployment of home-grown renewables. I have not forgotten that in 2020, many predicted mass unemployment in Europe, and a long recession. It did not happen because we put the right policies in place and we acted decisively. Instead, today we have more people at work than at any other time in European history. Unemployment is at an all-time low, at less than 6%. Employment is at an all-time high, at more than 75%. And inflation is now close to our 2% target. Dear colleagues, we have certainly gone through hell and high water but in many respects, we have come out stronger than five years ago.

Yet the shockwaves of these crises have taken a toll on Europe’s competitiveness. The business model of many European industries was based on supposedly cheap energy from Russia and trade with a growing China. Today, we face a rogue Russia and a China struggling with domestic demand. And besides geopolitics, there are other trends that are impacting our competitiveness. In the last decade, Europe’s labour productivity has risen by only 0.8% per year, compared to 1.1% in the United States. These trends can only be addressed with a concerted effort at both the European and national level. Therefore, restoring our competitive edge must be at the heart of Europe’s economic agenda of 2024 and beyond. And I am absolutely convinced that with the necessary push, we can set off a new surge of European competitiveness.

At the European Council of last week, we listened to some very good ideas from Enrico Letta on our Single Market. Today, I want to look at four of the basic factors that determine costs, prices and productivity in Europe. Let me start with finance. Since we took office almost five years ago, we have unleashed an unprecedented wave of public investments in strategic sectors. Take energy and clean tech. We are investing EUR 400 billion from NextGenerationEU, and we have approved over EUR 550 billion in national public support, for clean tech and energy investment. This has been crucial. But certainly public investment is not enough. The time has come for a systemic solution that mobilises Europe’s immense private capital. And an essential part of this solution is to complete the Capital Markets Union.

EUR 470 billion – this is the additional private investment we could raise every year if we completed the Capital Markets Union. The CMU was launched almost ten years ago. And since the start of the mandate, we have made progress on many of its elements. For instance, we have made it easier for companies across Europe, specifically SMEs, to get listed on capital markets. But we have also faced a deadlock in Council, on many crucial aspects of the Capital Markets Union. So, it is more than welcome that the last European Council marks a turning point, finally. We now have a clear mandate to move forward on three vital issues. The first is: harmonising national rules on topics like insolvency. This will give investors the predictability they need. The second is: We will design and create cross-border savings products for retail investors. And the third is: The Commission has been tasked to strengthen supervision at European level of the most important market players. So the way forward is clear. If we are to fund the new industrial revolution of our times, we must mobilise Europe’s private capital. And now is the time to turn the political will into action.

The second priority is reducing the cost of energy. Energy costs continue to affect our competitiveness, specifically for energy-intensive industries. But the International Energy Agency tells us that there might be some relief in sight. You remember very well that last year, during the energy crisis, there were many investments that have been done. Now, a large wave of new LNG export projects is coming to the market. Therefore, we might soon be moving from a global shortfall to an abundance of LNG. As a result, we expect gas prices to fall. This gives us space to further develop renewable energies. And I think it is a very telling success that last year for the very first time, the European Union was able to produce more electricity from wind than it did from gas. This was a big success.

At this point, I want to thank Parliament for all the work you have done. For example, the work on the reform of the electricity market or the new Renewable Energy Directive. We must keep pushing to produce more cheap and clean energy in Europe. And we must listen to our industries to understand what they need to reach the climate goals. We have done this in so-called Clean Transition Dialogues with ten different sectors of industry. One of their central demands is always energy infrastructure. Just take this one: In our decade now, our cross-border electricity transmission capacity must double. So this needs investments in smart grids and charging infrastructure but also cables, pipes, turbines, electrolysers, you just name it. We must build the physical backbone of the economy of the future in order to be competitive.

The third priority is to address the labour and skills shortage that affects our economy. And it is obvious, we have, as I said, a very low unemployment. So, we need to train as many as possible of our unemployed, and specifically have a look at youth unemployment. Because, as we have a very low unemployment rate on average, we still have a higher youth unemployment rate than the average. Every young person has great potential, even if they might be struggling with obstacles of all kinds. Let us make sure that they get the chance they deserve. We also have to increase women’s access to the labour market. Parents need infrastructure. It is very simple: affordable and accessible childcare, good schools and flexible working hours are an absolute must. Finally, we can offer more flexible solutions for silver workers to continue their careers, and we need to attract the right talents from abroad. It is a whole bundle of activities that have to be done to address the skills shortage. We are investing EUR 65 billion in skills, they are coming from NextGenerationEU and the European Social Fund, and skills must continue to be at the heart of our action.

Finally, let us never forget that Europe is a trading continent, and we derive a significant share of our prosperity from trade. If it is true that in the next decade 90% of the most significant growth is happening in regions outside the European Union, we should tap into it. And our Union is second to none in negotiating trade deals. We have the largest network of trade agreements in the world, with a total of 74 countries. The value of EU trade through these agreements surpassed EUR 2 trillion for the first time in 2022. And beyond exports, we need to secure imports, for example, of the critical raw materials that our industry needs. But, Honourable Members, global trade also needs to be fair. We need a global level playing field. And we need to address the risks that come with our openness. We need for example tools to address issues of overcapacity produced outside the European Union. I am speaking of structural overproduction, which is achieved to a large extent with massive subsidies. It has to go somewhere, this overproduction. Others are closing their markets. So our market is an attractive destination and we have to be very vigilant that our producers are not at risk to be forced out of the market. And we also need to involve developing economies around the world on this topic, because their industrialisation is also threatened directly by overcapacity. We need a more structural response with our partners. Work is starting on this in the G7.

Honourable Members,

The last five years have taught us something. Time and again, we have surprised the sceptics, and defied the doomsayers. Because for a strong Europe, if there is a will, there is a way. And our continent will continue to be the global beating heart of industry and innovation.

Thank you, and long live Europe.