President Ursula von der Leyen presented the European Commission's plan to boost Europe's competitiveness and turn it into a place where future technologies, services, and clean products are invented, manufactures, and put on the market.
This Competitiveness Compass sets out the course the Commission will follow in the next five years. The Compass, first announced by President von der Leyen in November, transforms the recommendations laid out by Mario Draghi is his report on the future of European competitiveness, into a roadmap.
During a press conference, President von der Leyen explained that Europe has what it takes to lead the global economy of tomorrow: "I want to start by emphasising the strengths of the European Union. We have a very strong manufacturing and industrial base. We have a highly trained and well-educated workforce. We have a continental-size Single Market. We have the second-largest economy. We have a stable and predictable legal environment. And we have a longer life expectancy and lower inequalities than all our global competitors," the President said.
At the same time, she highlighted the need for Europe to shifts gears and leave behind the model on which it had relied for the last two decades, based mainly on cheap labour from China, presumably cheap energy from Russia, and partially outsourced security.
The Competitiveness Compass will drive this gear shift: the Compass is structured in three core areas for action, which correspond to the three pillars presented in the Draghi Report
Namely, the Commission will act to close the innovation gap and boost productivity. This will be done by creating the right conditions for innovative business, especially start-ups, to thrive and to scale up.
"Europe's industrial structure has become too static, with too few start-ups emerging with new disruptive technologies. We need to reignite Europe's innovation engine," President von der Leyen said.
As concrete actions, the Commission will present an AI Factories initiative, to enable European AI start-ups to train their models using the EU's supercomputing power, while an Apply AI Strategy will seek to boost the use of AI in industrial sectors such as manufacturing and energy.
The Commission will also come up with targeted action plans on advanced materials, quantum, biotech, robotics, and space technologies.
An EU Start-up and Scale-Up Strategy will tackle obstacles preventing new companies from emerging or growing; and a so-called 28th regime will be proposed for innovative companies to benefit from a single rulebook on corporate, insolvency, labour, and tax law, rather than having to deal with different national legislations across the EU.
The second area for action is a joint roadmap for decarbonisation and competitiveness. "I want to be very clear, the European Union stays the course of the Green Deal objectives, without any question," President von der Leyen insisted.
While living up to its commitments, the Commission will give special attention to energy prices and energy intensive industries.
Next month, it will present an Affordable Energy Action Plan, to tackle high energy prices, and a Clean Industrial Deal will set out a competitiveness-driven approach to decarbonisation.
At the same time, the Commission will prepare action plans on energy intensive sectors such as steel, metals, and chemicals; and the President highlighted the launch of the Strategic Dialogue on the Future of the Automotive Industry: "We will ensure that the future of cars remains firmly rooted in Europe," she said.
The third area of action concerns reducing excessive dependencies and increasing security. In order to do that, the Commission will rely on its strong network of trade agreements with 76 countries and territories, it will develop a new range of Clean Trade and Investment Partnerships, and it will expand its successful mechanism of gas demand aggregation (AggregateEU) for the joint purchasing of critical war materials.
The Commission will also move forward with its White Paper on the Future of European Defence, and will draw up strategies on a Preparedness Union, internal security, and climate adaptation.
Horizontal enablers for competitiveness
Along with the three pillars, the Competitiveness Compass lays out five horizontal enablers that will act across all policies and sectors.
The first one is simplification. President von der Leyen announced an omnibus proposal for next month to reduce unnecessary regulatory and administrative burdens for businesses. "This includes a far-reaching simplification in the fields of sustainable finance reporting, sustainability due diligence and taxonomy," she explained.
The second enabler is about lowering the remaining internal barriers in the EU's Single Market, while the third one will be about financing competitiveness, especially thanks to a new European Savings and Investments Union. On this, the President said: "We do not lack capital. What we lack is an efficient capital market that turns these savings into investments and the venture capital that is so much needed, particularly for early-stage technologies that have a game-changing potential."
The fourth horizontal enabler is about promoting skills and quality jobs through a Union of Skills, and the last one is about better coordination: a Competitiveness Coordination Tool will identify shared policy objectives and cross border projects, reforms, and investments of European interest.
The President concluded her presentation making the case for quick and united action on the Compass on the basis of the Budapest Declaration endorsed by the 27 leaders last November: "We have a plan; we have a roadmap. We have the political will. Now, what really matters is speed and unity. Speed, because the world is not waiting for us. So it is high time that we accelerate. And unity is important to really implement this political will."
